The things we’d forgo to build a new Falcons stadium

Much of the public debate about a potential new stadium for the Atlanta Falcons has focused on the wrong question.

The issue is not whether the Falcons, their fans and — above all — owner Arthur Blank would benefit from having a new stadium built with an expected $400 million in tax money. The issue is whether building a replacement for, or complement to, the Georgia Dome is the best use of those millions.

As an economist would say, is it worth the “opportunity cost”? That would be the next-best choice among all possible things the money could buy.

And we could buy a lot of things for $400 million — the state’s expected portion of the $700 million project. Put another way, we’re talking roughly $19 million a year. Based on recent years, that’s the portion of annual hotel/motel tax revenues in Atlanta that would be dedicated to the new stadium.

Hotel tax revenue is sometimes considered “free money” because it comes from visitors. That’s why it’s better to think in terms of what we give up by using it a certain way.

What's the best way to use $400 million in hotel taxes?

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For example, it could go to cutting property taxes. Atlanta takes in $18 million to $20 million in general funds (see page 4o of this PDF) for each mill of property taxes. (A mill equals a dollar of tax for every $1,000 of a home’s assessed value.)

If the city were to lower property taxes by one mill and replace the revenue with hotel taxes, the owner of a $250,000 home would save $250 a year. (Hey, that’s about what it costs to take a family of four to a Falcons game!)

On the other hand, we could continue to spend the money, just not on a new stadium. The list of potential projects is long. Here are some possibilities, not all of which I’m endorsing simply by including them here.

For $400 million, we could build the entire 44-mile network of high-occupancy toll (HOT) lanes planned to help ease congestion in the region. Or we could make a number of improvements to freeway interchanges choked by traffic.

For those more interested in public transportation, the city could complete about a third of the BeltLine’s 22-mile transit loop. Alternatively, it could more than cover the first phase of the proposed streetcar route along the Peachtree corridor (a project I’d personally put at the bottom of the list).

Or the city could do the opposite of what governments tend to do and reduce the burden on future taxpayers.

With $400 million, the city could erase more than a quarter of its $1.5 billion pension funds deficit. Or it could pay for a big chunk of its continuing, $4 billion water and sewer infrastructure repairs. Those costs are inescapable. Why pass them on to unborn Atlantans when visitors could help us pay them down now?

Just to get a full grasp of what $400 million will buy, let’s look outside the city limits. For that money, we could pay the rest of the cost of deepening the Savannah port, which would benefit the entire state. It would also fund a large part of an outer perimeter or new north-south expressway allowing cargo trucks to bypass Atlanta.

Or we could hedge our bets in the water wars by building new reservoirs to fulfill our water needs in the event we lose access to Lake Lanier.

These alternative uses of the hotel tax revenues would require new state legislation. But surely Republican legislative leaders, good small-government conservatives that they claim to be, would rather use this money to lower other taxes or to build more pressing infrastructure than a spare football stadium. Right?

And even if you believe money raised from out-of-towners should be used to attract more visitors, the Georgia World Congress Center and Atlanta Convention and Visitors Bureau would still get almost a third of Atlanta’s hotel tax revenues.

Given the other possibilities, I’m not sure why we’re seriously debating a new stadium.

– By Kyle Wingfield

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113 comments Add your comment

Moderate Line

March 9th, 2011
6:59 pm

Given the other possibilities, I’m not sure why we’re seriously debating a new stadium.
++++
A good book to read is Soccenomics is an interesting read on this subject. It looks at the economic impact of sport teams. The only thing this will do is make Arthur Blank richer because the Falcons will increase in value with a new stadium.

saywhat?

March 9th, 2011
6:59 pm

I whole-heartedly agree.

Except for the tax cuts. Tax cuts should not be widely distributed to all city home owners, but only to owners of homes worth over $750,000. After all, why punish success, and haven’t the rich suffered enough?

Be Afraid

March 9th, 2011
6:59 pm

We don’t need no stinkin’ stadium (at least not a new one).

I’m pretty sure that buildings in other parts of the world last for centuries. So I’m not sure why we would put up with design and construction that’s only good for a few decades, if that. Could it have to do with the construction industry having so much leverage over our local politicians?

F. Sinkwich

March 9th, 2011
7:16 pm

Kyle, I just recently learned that there is a much more worthwhile expenditure of taxpayer dollars than some stoooopid stadium.

American Hero, Harry Reid, Senate Majority Leader, liberal icon, told me that my tax dollars are funding the Cowboy Poetry Festival in Nevada every January. Here I thought so much of my taxes were wasted.

I am heartened that my money goes to such a worthwhile endeavor.

I thought that running a $1.5 TRILLION deficit was unconscionable, but if we’re paying for such art, I’m OK with it.

Why, I ask myself while banging my head against the wall, did I ever question the wisdom of our elected officials to spend my money only on those items absolutely necessary to secure life, liberty, and the pursuit of happiness for the American people.

I stand chastised.

Here was my favorite Poem from that event:

I was a cowboy from Nantucket.
………

Never mind.

JDW

March 9th, 2011
7:32 pm

Kyle, ever hear the phrase penny wise pound foolish…

Georgians Need to Strike

March 9th, 2011
7:43 pm

Like the NFL Players. The owners need to pay for the stadium, not every Georgian. Hell most don’t even like football. They can stay in the Dome rather than have the people cough up the money. The Dome will be paid off shortly, if not already. Kind of like the Georgia 400 toll.

get out much?

March 9th, 2011
8:02 pm

Kyle’s is missing the real issue. We need a new stadium to keep up with the (Jerry) Joneses.

Rafe Hollister

March 9th, 2011
8:04 pm

All of the bedwetting liberals who like to comment here are always so agonized over corporate welfare, so on this issue I agree with them. No, to welfare for Arthur Blank and his minority owners.

If the Georgia Dome is costing him money, let him build his own Taj Mahal stadium. Reducing the number of seats in order to justify raising ticket prices is just beneath contempt. Playing the game in the elements just to force the wealthy to seek climate controlled suites, just as onerous. How can anyone support this egotistical jerk?

My Name Changes

March 9th, 2011
8:22 pm

Kyle,

You don’t get it.

The GA dome is a POS.

I’ve posted under different names in the past.

The Dome Sux !!

Blow it up for a movie or something.

Retractable roof, real grass, lots of seats for regular folks.

Anything else is another ATL failure.

Please get this one right Atlanta.

Anderson

March 9th, 2011
8:26 pm

If any stadium were a good idea, the team would pay the cost itself. The city would still benefit from hotel and restaurant revenue. Arguments for taxpayer funded stadiums are a deception, put forth by greedy owners who want to leverage someone else’s money for a profit.

JoeMan

March 9th, 2011
8:32 pm

Hey, I’d LOVE to see a new outdoor stadium for the Falcons – as long as Arthur Blank foots the bill. ANY expenditure of taxpayer dollars on this project would not only be fiscally irresponsible, but socially immoral, as well. Atlanta is broke, and the state’s not far behind. Let’s get our priorities straight for once and make sure we invest in projects that will contribute to the region’s economic growth.

Freehuman

March 9th, 2011
8:42 pm

Remove the dome off the Georgia Dome. Voila, open air stadium!

Glenn

March 9th, 2011
8:46 pm

I would buy tickets if we had an open air stadium . Yes the dome is awful . It was made to get the Olympics . Rankin Smith never wanted a dome . The city of Atlanta & the Olympic committee forced it on him & the Falcon fans . I think a better question would be was the Olympics worth it ? As a huge NFL fan & lover of the Falcons my answer is of course not . Indoor football in Atlanta is stupid . Blank would still get an outdoor stadium . It would just be in the suburbs . If the city of Atlanta would be fine with that then fine .

bo

March 9th, 2011
9:09 pm

i don’t think 400m would make a dent in a new freeway such as an outer perimeter.

DawgVoiceofReason

March 9th, 2011
9:19 pm

I’m also a big Falcons fan and would love to be able to go to a beautiful new outdoor (or retractable roof) stadium and see the Falcons on the road to the Super Bowl. But, should one penny of tax money be used to pay for it? “H” “E” “double toothpick” NO!!! If Mr. Blank and the Falcons want it and think it will benefit them, they should pay for it directly. The fans who support the Falcons by attending the games would then pay for it indirectly, as it should be. Folks, the economic crisis we are in “ain’t no game” and deserves to be taken as seriously as you would the future of your own family.

BigDawg

March 9th, 2011
9:19 pm

What taxpayer funds have contributed to UGA’s stadium? NONE! Let the free market work. If A. Blank wants a new stadium, let him build it! Too many taxpayer funds going to bailouts of big companies and special interests.

jm

March 9th, 2011
9:25 pm

Amen. But that new stadium will be oh so cool. Unfortunately. The gov’t should only throw in $100mm. Plus, those old bonds should be paid off first.

Road Scholar

March 9th, 2011
9:26 pm

Kyle, interesting proposal. In other words, if I understand your logic, we should look at what could be in our future, what we want to be as a City, and region. Defining what should make up Atlanta, or our prirorities should be thought out and an action plan developed. Sort of Strategic planning?

So why shouldn’t that work in defining what America should be to its citizens and the world. The issues that need solutions require our focus not neccessarily the bottom line at this time. Once we focus on our needs and desires (two different things) we can then prioritize our future endeavors. At that point you’d cost out the options/priorities and select those that we really want and that we feel is cost effective. Of course some of our needs won’t be cost effective by some, but at least we would have a clear idea of our priorites!

DonH

March 9th, 2011
9:28 pm

Kyle…great article you wrote. Do you happen to know how many other non-Falcon game events (like tractor pulls, motocross, rodeo, college games, high school finals etc) the Dome hosted in 2010 and what % of total revenue they represent the Falcons games. I ask cuz it does seem a bit foolish to build a new Falcons stadium for about 10 days of the year (10 home games) plus a few other football events?!! I assume the new stadium would be solely used for Falcons games and a few college bowls, high school etc) AND the Dome would host the non-football stuff?

Other than an open stadium would be “nice” I certainly never would classify the DOME as a POS as one here did. I think it’s a pretty nice facility that I think was upgraded not too many years ago under Mr. Blank.

William C Smith

March 9th, 2011
9:34 pm

This can be explained with a stupid question. Why should the taxpayers pay to build a stadium that we can’t afford to go to? Authur Blank and the NFL owners have spent too much time on Wall Street.

owl

March 9th, 2011
9:37 pm

If Mr. Blank wants 400 million of our money to build it we should all get free admissoin for ten years.

Brett Favre was once a Falcon

March 9th, 2011
9:43 pm

Atlanta-Fulton County Stadium was built for $18 million.

It was a fine outdoor stadium. Let’s go retro.

Bone

March 9th, 2011
9:51 pm

Once Arthur sees that the ATL will not build a new stadium in downtown, he’ll take his team and move out to Flowery Branch. Once this is announced, ATL will come running with the money to build the new stadium. Open-air…Dome…Retractable…it will be built. Advertised as creating jobs, both during and after the build.

Wait and see…….

Legend of Len Barker

March 9th, 2011
9:54 pm

I’m only for building a stadium if parking comes with it. Sufficient parking.

ND

March 9th, 2011
9:58 pm

I am not a fan of building new stadiums with taxpayer dollars, generally speaking. Just wondering, though: wouldn’t the opportunity cost of not funding a new stadium include the Falcons leaving the city and taking with them whatever positive economic impact they have? Yes, I have read studies that say the economic impact of sports teams is overrated, but how true is that and to what extent?

Brett Favre was once a Falcon

March 9th, 2011
9:59 pm

Hey Legend, Atlanta-Fulton County Stadium had lots of parking. In fact, there were thousands of spaces where Turner Field is now. And they served all-meat hot dogs.

Billy

March 9th, 2011
10:02 pm

I am typically opposed to taxpayers paying for new stadiums for teams. I *am*, however, ok with it **if and only if** the taxpayers retain control of the stadium.

If it’s funded by taxes, then the city (or state, or whatever) retains all rights to it. If Coke, for example, wants to pay a couple million dollars to have the new stadium be called “Coke Field”, that’s fine. But they can give that money to the city.

I can accept that the Dome may be sub-standard compared to other pro teams’ stadiums. But it’s not falling apart, either, as far as I know. If someone can design and build a more-or-less top-of-the-line stadium at a reasonable price and guarantee that it’ll last for more than 20 years, I could maybe get behind it. But I’m nervous about the prospect since I’m 32 and can remember the opening of the Georgia Dome like it was yesterday. If you’re gonna build a new one, make it an icon. A destination. A lasting figure in the Atlanta skyline. And don’t ask for another one again.

GSUBLH

March 9th, 2011
10:04 pm

PERFECT ARTICLE !!!! The citizens of Georgia need more of this. No need for another stadium. In A. Blank’s perferred world he would have a stadium OTP perferably up 400 somewhere to get both the 75 and 85 population and their dollars

Andre

March 9th, 2011
10:05 pm

@ Bone, State of Georgia will not allow that to happen. They’ve already voted to keep the team within the city limits if the state will input money to the stadium. No suburban city has the money to put to build a stadium all by themselves.

Legend of Len Barker

March 9th, 2011
10:08 pm

Yeah, but what type of meat, Brett? I didn’t see a slaughterhouse behind that counter.

There is great parking there, though. As the Braves were such a regional team with a widespread fanbase, you’d believe the Falcons would try to do the same and actually make it easy for fans to drive in.

Wait. Just remembered. Rankin Smith owned the Falcons when the stadium was built. Never mind.

Captain Chaos

March 9th, 2011
10:11 pm

It looks like wasting more taxpayer money on a new stadium is more than even the corporate boot-licking conservatards can stomach.

Brett Favre was once a Falcon

March 9th, 2011
10:15 pm

Legend, you could order a hot dog and the attendant behind the counter would ask if you wanted regular or all-meat. I really don’t want to know what was in either one.

On a better note, I ate my first Chik-Fil-A sandwich in the old stadium.

And you are right about the parking. Even churches know that people won’t come without adequate parking.

Carl

March 9th, 2011
10:16 pm

Please don’t waste a billion $$$$$ on a rich man’s trinket, Atlanta is such a fair weather sports town, (I’m not wishing this) but bad injury could make the Falcons a marginal team again. The last Super Bowl we had came with an ice storm, just think what the press would be like with a gaping hole in the roof!!!

falcons fan

March 9th, 2011
10:17 pm

…let Arthur pay for it…and build it near the Gwinnett Civic Center. Get the HELL out of Atlanta!

Another Voice

March 9th, 2011
10:33 pm

No tax dollars – whether motel/hotel tax or state-support – for this momument to Arthur Blank’s ego. Don’t need it, too many other things need doing. And even if the Falcons leave, there are plenty of events that find the GA Dome to be a fine venue. 10 days’ revenue lost vs. millions spent on yet another facility? I don’t think so!

native

March 9th, 2011
10:39 pm

No subsidies. Let the martket decide.

Le Bourgeois

March 9th, 2011
10:40 pm

The water and sewer infrastructure is 100+ years old. Nothing like dumping raw waste into our streams…yummy. That should be a top priority. Not sexy enough I suppose.

Le Bourgeois

March 9th, 2011
10:46 pm

I’m with you “Brett Favre”, Let’s go retro and be the anti-Jones stadium builder. Build a much smaller outdoor stadium that allows for everyone to have a great seat. Screw the high-tech theater feel and fan zone crap that takes up valuable space. Just build a field and we shall come.

RL

March 9th, 2011
10:48 pm

Who cares about the Falcons? I do not want to pay additional taxes. Let them move to Birmingham or Augusta. Mr Blank and the players are the ones making the money. Let them pay or let the fans who want them to be here pay.

Word

March 9th, 2011
10:49 pm

I would much rather our tax dollars go to the Atlanta Falcons than to lazy, shiftless, rude, uneducated, jive-talking Obama Lovers.

janet

March 9th, 2011
10:56 pm

Studies have proven that sports stadiums/ complexes generate very little income for businesses around them. This is the usual hype about jobs/ business opportunities etc. It’s simply not true.
Want a new stadium? Let Mr. Blank have a bake sale(s) but not one dime of taxpayer money either loca or state should pay for it.

Tommy Maddox

March 9th, 2011
11:04 pm

Pension fund deficits? Oh great – we have to pay for those too?

Moderate Line

March 9th, 2011
11:10 pm

The reason Blank wants a new stadium is that the ticket sales are split 60-40 with the away team. However, luxury boxes the home team keeps all the revenue.

Tommy Maddox

March 9th, 2011
11:49 pm

Raise the roof – add more Boxes.

ODDOWL

March 10th, 2011
12:05 am

The stuck on stupid, big house middle classers who vote Republican voted down a one cent sale tax increase to build trauma centers to save people’s lives. So a course they will support spending tax payer’s money to build a new football stadium. Stupid is as stupid do.

seabeau

March 10th, 2011
6:34 am

Word ! Thats exactly who will pay for it.Let the Falcon fans pay for the new stadium. Raise the tickets to $1,000. per game.

Le Bourgeois

March 10th, 2011
6:38 am

ODDOWL, despite your pejorative remarks on the voters who in fact defeated the trauma bill but yet throw support behind taxpayer funded stadiums, you are correct.

Mash

March 10th, 2011
7:47 am

Love this post.

Or we could do the unthinkable and lower the hotel/motel tax.

Baker

March 10th, 2011
7:50 am

36 people so far have voted for the new stadium. And Charlie Sheen is the biggest news right now. I fear for the future.

mrs. w

March 10th, 2011
7:53 am

ODDOWL@12:05…. I voted against the trauma center tax only because the government NEVER puts that money where they say they will.

Kyle: Blank can afford to build his own damn stadium.