Public funding for new sports stadium?

Moderated by Rick Badie

Why should some $300 million in hotel-motel taxes be put toward a $1 billion new stadium for the Atanta Falcons? Today, a state representative answers that question and spells out the economic benefits of a new nest for the Dirty Birds. And a state senator questions public subsidies for privately owned sports teams.

Move forward with new stadium

By Ron Stephens

Boasting an NFL-leading record, an MVP candidate and a first-ballot Hall of Famer, the Falcons aren’t just hot right now, they are on fire. I’m thrilled to see our team succeed on the field.

The Falcons are in negotiations with the Georgia World Congress Center Authority to build a new stadium by 2017, when the Falcons’ lease at the Georgia Dome could expire. The new building would not only house the Falcons, but other events.

The stadium project is important to retaining Georgia’s position as one of the nation’s premier tourism destinations. Whether or not we replace the Georgia Dome isn’t a Falcons issue or even an Atlanta issue. It’s a Georgia issue.

The Georgia Dome has greatly benefited our state. From sporting events to concerts, to conventions, to the Olympics, the Dome has hosted events that have brought billions of dollars into our economy. If we want to host marquee events and enjoy the economic benefits, we must move forward with a modern facility that is competitive, flexible and functional.

The Georgia Dome was completely funded with public money through a portion of the hotel/motel tax in Atlanta and other areas in Fulton County. This tax also funds a number of regional economic development projects.

The new stadium will be a public-private partnership. The same portion of the hotel/motel tax — 39 percent — will contribute to its construction. The Falcons will be responsible for the remainder of the funding, about two-thirds of the cost in addition to taking on the operating, capital and construction risks borne by the state for the Georgia Dome, which means we will be able to fund our end of the public contribution without raising income or property taxes.

People have asked me why the public should invest approximately $300 million in a stadium for the Falcons. I tell them that they are looking at it backward: The Falcons are going to invest about $700 million in a stadium for Georgia. That stadium will be an asset of the state and will generate economic benefits long after the public investment is recouped.

A $300 million public investment, even though it will only be levied on visitors to Atlanta, seems like a lot of money, but consider the return. This stadium will add more than 4,500 jobs to our state’s economy and generate more than $400 million in economic impact to the state during construction.

NCAA President Mark Emmert recently noted that a new stadium in Atlanta “clearly … would be advantageous” in luring future marquee events. He also said that we are facing increased competition for these types of events.

A new stadium has much better potential to attract new events such as a Super Bowl, or a soccer World Cup. Atlanta has earned the distinction of a world-class city, and the entire state has the opportunity to benefit even more through projects like this.

There simply isn’t another economic development project on the table right now that could make such a tremendous impact on the state of Georgia.

State Rep. Ron Stephens, R-Savannah, is chairman of the House Economic Development & Tourism Committee.

Team would win; taxpayers would lose

By Vincent Fort

I voted for the extension of the hotel-motel tax in 2010 as a method of paying for a new Falcons stadium. It was a way of having visitors to the city and state pay for the construction of a new stadium. It is a vote I have come to regret, especially since the negotiations on how the money is to be used are shrouded in secrecy. Legislators were not given a full picture of ancillary infrastructure costs and the potential for cost overruns. I am opposed to taxpayers being on the hook for Falcons stadium debt.

The question is how much are we, as taxpayers, willing to pony up to support the private sports industry and its wealthy owners and players? Is public funding of sports teams — bonding support or other direct taxes — a legitimate municipal or state government undertaking? We should be mindful of the Gwinnett Braves stadium-funding debacle. Taxpayers were made to cover the increased construction costs (from $25 million to $64 million) and revenue shortfalls. I say let the Falcons and the NFL finance their own facility.

It would be better to use hundreds of millions of taxpayer dollars to improve education as an economic driver than to support a sports team owner. Since 2002, funding cuts to our public education system have spiraled to upwards of $6 billion. Many of the same people who slashed education funding are now advocating this Falcons stadium deal. In survey after survey, businesses say the top consideration for relocating a business is education. They never mention football.

The boosters of using taxpayer money to subsidize stadium construction are making the “trickle-down” economic development argument — that a new stadium will lead to a more prosperous city and state. That assertion was made when the present Georgia Dome was built 20 years ago. If the impoverished conditions of the nearby Vine City and English Avenue neighborhoods are any indication, that argument is a cruel deception.

Are we going to be in a position every 20 years of building a playground for billionaires?

Most independent analysts are skeptical about how much of the wealth created by stadiums actually seeps out of the edifices’ walls into the cities and states that house them. They are profitable for team owners and the league, but not for the people who pay the cost. A. Barton Hinkle, a conservative editorialist, wrote: “Economists, who usually disagree about nearly everything, are united on one point: Public subsidies for sports stadiums are win-lose propositions: The teams win, and the taxpayers lose.”

One of the most galling aspects of this debate is that negotiations between the Georgia World Congress Center Authority and the Falcons about the terms of the agreement are being conducted in secret. Secret negotiations make citizens distrust government. I urge Gov. Nathan Deal and the World Congress Center Authority to make those negotiations open and transparent to the media and the public.

State Sen. Vincent Fort, D-Atlanta, represents District 39.

35 comments Add your comment

Rafe Hollister

November 22nd, 2012
12:04 pm

Check out how the Marlins lied to their fans and the city of Miami to get their new stadium. It did not draw fans as predicted and then they sold off their team after promising the city that they would maintain a competitive team. Miami taken for suckers!

Dc

November 22nd, 2012
8:33 am

Are there dcent odds that the investment will pay off in future tax revenue? If yes, then build it. If no, then dont. I never have understood why this is so hard to figure out

The gwinnett ballpark is the poster child for a stupid decision by a govt entity. This one is smelling a lot like that

Ronin

November 22nd, 2012
6:33 am

Ron Stephens said: “The stadium project is important to retaining Georgia’s position as one of the nation’s premier tourism destinations.”

Right, Atlanta is a premier tourist destination? Only if you want to watch up close and personal gun battles inside the perimeter. Atlanta is no Orlando, Las Vegas or San Francisco, not even close.

Ron sees box seats in his future if the new stadium is built. Use the Dome, if the birds don’t like it, let them move to Montreal or someplace in West Virginia

yuzeyurbrane

November 21st, 2012
8:49 pm

Why don’t we just find out what Deal’s cut is going to be and have the legislature “bribe” him that amount to veto the bill? It’s a win-win. Deal gets his usual cut and the taxpayers pay way less than $300 million.

[...] Public funding for new sports stadium?Atlanta Journal Constitution (blog)Why should some $300 million in hotel-motel taxes be put toward a $1 billion new stadium for the Atanta Falcons? Today, a state representative answers that question and spells out the economic benefits of a new nest for the Dirty Birds. And a state … [...]