Funding details released for the new home of the Braves
by Marietta Daily Journal Staff
November 14, 2013 01:10 AM | 17932 views | 54 54 comments | 39 39 recommendations | email to a friend | print
When the numbers for the proposed Cobb County-Atlanta Braves stadium are released today, they will show the Braves are paying for 55 percent of the $672 million stadium cost, county chairman Tim Lee told the MDJ late Wednesday night. 'It’s a win-win deal for Cobb County and the Braves because it provides a fiscally sound, balanced funding model that takes advantage of the great opportunities provided by the Braves for economic development, job creation, at a good investment for Cobb Countians,' Lee said.
When the numbers for the proposed Cobb County-Atlanta Braves stadium are released today, they will show the Braves are paying for 55 percent of the $672 million stadium cost, county chairman Tim Lee told the MDJ late Wednesday night. 'It’s a win-win deal for Cobb County and the Braves because it provides a fiscally sound, balanced funding model that takes advantage of the great opportunities provided by the Braves for economic development, job creation, at a good investment for Cobb Countians,' Lee said.
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download Summary of Braves plan
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Cobb County released the details of its much-anticipated stadium deal with the Atlanta Braves on its website this morning, showing a multi-layered agreement that would fund the construction of a $672 million stadium through new and existing taxes.

In the end, the average Cobb County property owner emerged unscathed, at least in the short term of a 30-year deal that shows the county paying 45 percent of the total cost. The new taxes included in the deal are a 3 percent countywide car rental tax, a fee on top of the existing hotel-motel tax and a new tax on property owners within the Cumberland CID that would raise $5.1 million per year through a 3 mill increase.

The Braves are responsible for any cost overruns. The team would also control stadium leases, which means they would have final say on what events could be held at the stadium. The Braves and the county will share responsibility for maintaining the stadium.



Here is a summary of the Atlanta Braves and Cobb County deal:



1. Overview. The Atlanta Braves, Cobb County and the Cobb-Marietta Coliseum and Exhibit Hall Authority will be executing a Memorandum of Understanding (MOU) that sets forth their respective rights and obligations for development of the Atlanta Braves stadium in Cobb County.



2. Term. The term of the MOU is 30 years, commencing with the 2017 Atlanta Braves season. The Atlanta Braves will have the right to extend the term for an additional five years through the 2051 major league baseball season.



3. Stadium Project Budget. The total budget for the stadium is approximately $672,000,000. This includes stadium, parking and related infrastructure.



4. Allocation of Total Stadium Project Cost. Atlanta Braves Contribution: $372 million or 55 percent.

The Atlanta Braves’ upfront commitment is up to $280 million (minimum contribution of $230 million).

The Atlanta Braves’ total contribution of $372 million over the life of the stadium project consists of $280 million paid by Opening Day 2017 and $92 million (Net Present Value) being financed over the 30-year term of the stadium operating agreement, and paid via Atlanta Braves’ annual guaranteed revenues ($6.1 million annually), as detailed below:



1. Rent: $3 million per year

2. Naming Rights Revenue: $1.5 million per year

3. Parking Revenue: $1.5 million per year

4. Marquee Advertising Revenue : $100,000 per year

Total: $6.1 million



Local (Cobb County/Cumberland CID/Authority) Contribution: $300 million or 45 percent.



$14 million – The local commitment includes a transportation improvement contribution of approximately $14 million that includes such items as a new bridge over I-285, a new exit ramp off of the interstate and relocating a major gas pipeline that runs through the stadium site.

$10 million – The commitment of the Cumberland Community Improvement District includes a contribution of approximately $10 million.

$276 million – The Cobb-Marietta Coliseum and Exhibit Hall Authority will issue $368 million of 30-year revenue bonds of which the Atlanta Braves’ annual financial commitments will cover $92 million of the bond issuance. Annual payments on the remaining $276 million will be paid from the following sources (projected totals):

1. Existing Hotel/Motel Tax – (Cobb County Portion): $940,000

2. Reallocation of existing Property Tax Revenues (no increase in property tax millage rate for Cobb County

homeowners): $8,670,000

3. New three percent Rental Car Tax: $400,000 (to be approved by County)

4. New Cumberland Special Service District Tax: $5.2 million (Consists of approximately three mills property tax increase in approximately the footprint of the Cumberland CID. This equals about $120 annually on $100,000 market value property.)

5. New Cumberland Special Service District Hotel Circulator Fee: $2.74 million ($3 per room per night charge

for hotels and motels in district footprint)

5. Stadium Design and Construction. The Atlanta Braves organization will serve as the design and construction manager for the project. The Atlanta Braves will be responsible for any cost overruns.

6. Operation and Management of Stadium. Except for the County’s right to conduct a limited number of special events, the Atlanta Braves have exclusive rights to use and operate the Stadium and permit third parties to do the same.

7. Stadium Revenues. Except for the County’s share of naming rights revenues, parking revenues and marquee

advertising revenues, the Atlanta Braves will retain all revenues associated with the Stadium.

8. Stadium Expenses. The Atlanta Braves are responsible for all operating expenses of the Stadium. The Atlanta Braves and the County will be jointly responsible for all capital maintenance expenses of the Stadium.

9. Additional Agreements. The MOU also sets forth that the parties will execute more definitive agreements in

connection with the Stadium Project including a Stadium Operating Agreement, Development Agreement, Non-Relocation Agreement, Transportation and Infrastructure Agreement and any other agreements that the parties deem necessary.



Earlier story from the MDJ's Jon Gillooly

When the numbers for the proposed Cobb County-Atlanta Braves stadium are released today, they will show the Braves are paying for 55 percent of the $672 million stadium cost, county chairman Tim Lee told the MDJ late Wednesday night. 

“The other 45 percent will be funded without a tax increase for over 95 percent of Cobb County residents,” Lee said. “This is a public-private partnership and the Braves are paying for 55 percent of the cost.”

Commissioner Helen Goreham, who has been reviewing the proposal, said she is a fan. 

“I’m very comfortable with it,” Goreham said. “The taxpayers are going to be pleased with the arrangement that is going to be shared with the media very shortly.” 

Neither Goreham nor Lee would go into specifics Wednesday, but Goreham believes the finances will work to the county’s advantage. 

“I believe that those who are going to benefit the most from the Braves moving to Cobb County will be the ones that will be making the largest investment in it,” Goreham said. 

Who are those people? 

Lee said they were “those who live in area of the Cumberland Community Improvement District” where the new stadium’s home is expected to be built.

“It’s a win-win deal for Cobb County and the Braves because it provides a fiscally sound, balanced funding model that takes advantage of the great opportunities provided by the Braves for economic development, job creation, at a good investment for Cobb Countians,” Lee said. 

The Board of Commissioners is scheduled to vote on a memorandum of understanding with the Braves at its Nov. 26 meeting. Goreham, who first learned the Braves were eyeing a move to Cobb County only a week ago, said she wished there was more time before the vote, but that’s the nature of the project. 

“I think that was dictated by the nature of this economic development project, OK?” Goreham said. “And we’ve seen this in other economic development projects where we’re trying to court a business, or in this case a sports team to the area, and not being on the ground floor of this from the beginning, I think that the speed and the confidentiality is necessary because of the competitive nature usually with businesses, but in this sense there’s a lot of politics involved.”

Atlanta officials are trying to keep the Braves where they are, she said. 

“You have one political jurisdiction obtaining a sports team and another losing it, so I imagine you have to be very careful on how this is handled and that’s probably why the confidentiality portion of this was so high and then the speed of it was once you start the wheels in motion, you’ve got to continue with it because there could be as we’re seeing right now Kasim Reed having some issues with it,” Goreham said. 

Having the Atlanta Braves move to Cobb County is an excellent boon for the county, Goreham said. 

“As I’ve said in the past, I’ve questioned what is the next economic engine for Cobb County that is going to provide on the revenue side of the balance sheet,” Goreham said. “Years ago, with Ernest Barrett, it was sewer. In the ’90s through 2007 it was single-family home construction and commercial strip centers. We will never see that boon in building again, in my opinion, that will provide on the revenue side of the balance sheet, and I think this is the next economic engine for Cobb County to provide revenue in so many different areas.”

Goreham said she had a message for those Cobb Countians anxious to see the details of the transaction. 

“My message to them is that this is going to be a positive for the county for many years to come and they should be pleased with the figures,” Goreham said. 



Comments
(54)
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CID Property Owner
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November 20, 2013
I'm confused. We've been told that Cobb County property taxes will NOT be raised to fund the stadium, yet it clearly states above that those living in the CID district WILL see their property taxes raised. Am I reading this incorrectly?

So those of us who live in the area of the new stadium get to pay for it, have the joy of being stuck in even worse traffic than we already are during rush hour, and likely will see an uptick in crime near our homes (just look at the surrounding area of any major stadium to see what those neighborhoods become).

This may or may not ultimately be a good deal for Cobb County and the Cumberland CID - I guess it all remains to be seen. As a taxpayer who will be directly impacted by this decision, I would have appreciated the opportunity to be heard about whether and where the stadium should be built, whether I personally should help pay for it (doesn't Liberty Media have enough money????), and about the changes I we can expect in our community that is right near the proposed site. Trust and believe, this cost WILL be passed along to Cobb taxpayers in one way or another, and we should have had a say in that decision.
Big Jim
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November 19, 2013
This year the school board took over the school crossing guards.They really dont know what there doing.This is a very important job for the children and buses.But yet they put crossing guards on highways where a police officer should be.Any yes the school crossing guards are the lowest paid employees in Cobb Ct.Wake up tax payers.Give the Crossing Guards back to the police dept where the job could be done rite.
Kennesaw Voter
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November 15, 2013
Wow, some of you folks must be school teachers or county employees because ya'll are always hollering about not getting paid enough or some other nonsense. Cobb county property owners already pay PLENTY of property tax for your salary, benefits and retirement. The schools get all the money they need from us taxpayers and then some. You know what...just when we think our schools have finally gotten everything they need...the school board will seek yet another 5 year sales tax extension and of course they get it....Talk about wasting our tax dollars. Schools are not suppose to be Taj Mahals...They are suppose to just be a place to learn. If the school system would lower our school property taxes when a school SPLOST is in effect, I would not be so upset but the school system just spends that money on something else instead of cutting our property taxes. I have started voting NO on all school sales taxes because of the abuse. STOP over taxing us property owners for schools.

Jet4Sale
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November 14, 2013
Not sure if they're related; but curious if this recent purchase by Cobb County was ever used to entice the Braves. No need to worry about Cobb County...apparently they have plenty of cash lying around.

http://flightaware.com/resources/registration/N70CR
Jim Hughes
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November 14, 2013
All of these nameless spineless winers have nothing to offer mankind except to live in their own self pity. What a shame. go braves and go Cobb County!
Lib in Cobb
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November 14, 2013
Tim Lee and his yes men and women will be rewarded with great jobs at the end of their political careers. Yes, I am one who believes that the little guy is going to get the nasty end of this stick.
Tired of commission
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November 14, 2013
The County Commission is trying to sell this with total lies. If you take money away from a dept that needs that money than what happens to the services they provide ? And yes, if we have all this excess revenue, why haven't our taxes been lowered ? Who's going to pay for all the extra police man-hours required ? If you really think about it the list can go on and on. Stadium renovations are a regular thing, guess who gets the bill and it's not cheap. Citizens of Cobb County, you are being handed a basket of total

lies. Why do you think the Commission waited until it was to late for a recall to announce it ?
Scout32
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November 14, 2013
Old timers hate this idea. Young people live it. I have been waiting for a place like this in Cobb for a long time. This is great news for Cobb.
erog
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November 14, 2013
What if tax revenues fail to meet projections like with the Vikings Stadium and Paul Brown Stadium and the Nationals Stadium and at Coolray Field?

Who will be on-the-hook if this happens? What is the backup source?
Cornelius94
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November 14, 2013
Great point.

Also, where does the $8.7 million reallocation of existing Property Tax Revenues come from? I don't think we had an extra $8.7M in tax revenue. Are they cutting funding to schools (again)?

When is the vote on this proposal?
Lib in Cobb
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November 14, 2013
At some point every property owner in Cobb is going to see some kind of new tax. We will be told, "This new blah ba blah tax will only be for two years. We all have to contribute to the growth". Get ready to grab your ankles.
Erev
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November 14, 2013
Here is some additional analysis of the deal based upon the information that has been released:

http://www.fieldofschemes.com/2013/11/14/6228/what-cobb-countys-braves-stadium-finance-plan-does-and-doesnt-tell-us/
Concerned Cobb
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November 14, 2013
I saw on the news that we are loosing our Police officers faster than they can hire them. How are we going to manage a stadium? Why is this not being seriously addressed? Please someone WAKE UP! A huge draw that is bringing the Braves to Cobb is safety and security of not only those going to the stadium but those who live and work here. If we can afford a major league team why can't we afford to beef up the police force. The news said the shrinking police force has been happening for years and none of our elected leaders have chosen to deal with it. This should have been addressed to our County Manager when signing him up for three more years. Please Cobb County stand up and be heard before Cobb County becomes North Atlanta. We get what we pay for!
Kennesaw Voter
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November 14, 2013
Hey "Concerned Cobb" - why don't you fess up and tell everyone you are a Cobb police officer. I think Cobb has a solid police force as it is so stop trying to use scare tactics to get more tax money out of us property owners. We all see right through you!!
Ex-Braves Fan
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November 14, 2013
I wonder how Cobb County is going to build a bridge over I-75 and a new exit ramp for $14 mil? Popsicle sticks? I'm not sure how the Braves can afford to pay for their share plus the cost overruns since every stadium in the last 50 years has cost at least twice the estimated price. Oh, ticket prices and parking prices will double too. This move doesn't do anything for the fans of the Braves. Who really is this going to help?
D.G. in Clarkdale
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November 14, 2013
Isn't it wonderful that the Cobb County Commission Politburo (C.C.C.P.) can make these kinds of agreements without input via the voting booth..... Comrade Lee must be beside himself with glee that he's side-stepping Cobb voters. After all he doesn't need another rejection like he was handed in the failed Transportation Tax... Cobb's own little Obama wanna be....
mmealling
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November 14, 2013
Since the article has now been updated with the details I have to say I like it. The Braves eat all cost overruns, the CCID pays the bulk of Cobb portion with increases in hotel/motel tax and the CCID only millage increase.

The only one I'm moderately concerned about is the use of existing property tax money for $8.6 million of the annual bond payment. As long as there's something in the agreement that prevents that going up I think its a good deal.

As a libertarian I find it annoying that my county government is getting into real estate development, but as these deals go this one is the best I've ever seen. Much better than how Atlanta handled the Falcons.

An outraged citizen
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November 14, 2013
I find it interesting the commissioners are so quick to approve the Braves deal without an (objective) economic impact study and delving into the details. If this were any other project, they would not rush it through.

Also, instead of funneling a portion of property taxes to this deal, why not use that money for education and other necessary resources?

Time and time again, unbiased research has shown that these deals almost never benefit the community and end up costing taxpayers in the long run.Just look at any major stadium that has been built in recent years.

Cobb Countians will regret this.
Kennesaw Voter
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November 14, 2013
Wow, you absolutely must be a school teacher. The schools get all the money they need from us taxpayers and then some. Oh wait, just when I think our schools have finally gotten everything they need...they seek yet another 5 year sales tax extension and of course they get it....Talk about wasting our tax dollars. Schools are not suppose to be Taj Mahals...STOP over taxing us for schools.
anonymous
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November 14, 2013
The people that are speaking out against this are not looking at the big picture and are not looking at the great future. You have complained about no growth in Cobb County. Here the biggest revenue generator anyone could ask for is being handed to you and you still complain. Think about all the new jobs this will bring into the county. This will spurn the purchase of vacant property in Cobb. This will spurn an upturn in housing values in the surrounding areas. This will generate billions of revenue for existing retail establishments in the Cumberland area; thereby generating new revenue for the county in whole. The only downside I can possibly see is traffic, but I am positive this will be addressed. Open up your minds to 2013, to 2023, people, instead of living stuck in 1983. If high-rise office space was placed on this property, the traffic problem would still be there and no revenue would be generated except for adding jobs and a tax base to the area. Get excited! Stop living in the dark ages! Welcome yourself to a great future in the greatest county in Georgia! You have the priviledge to be a part of this! I say to all you Sad Sallies and Sad Sams, put on your happy face! Get excited about something for once instead of complain, complain, complain! Would you rather Gwinnett, Douglas, or Clayton have this great opportunity? Can't you be happy Cobb is the chosen one? I am! I am bursting with pride to be a resident of Cobb County!
Lib in Cobb
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November 14, 2013
@anonymous: Is that you Tim Lee?
Kennesaw Voter
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November 14, 2013
I totally agree with you! Great post. I will admit when I first heard about the move, I was not feeling good about it because I do want Atlanta to be a successful big time city but after reading more about it...I think this is a great situation for Cobb County. Tim Lee just made up for some of his past failures in my eyes.
Cobb parent
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November 14, 2013
So what does "reallocation of existing property taxes" mean exactly? Property taxes are a major source of revenue for our schools, which are currently grossly UNDERFUNDED! So how can these funds that are already in short supply be "reallocated" to this stadium project?? What does this mean for our schools? Are we going to shoot for 50 students in each class so that we can have a stadium? We need to be concerned about this as parents and citizens!
anonymous
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November 14, 2013
Parent, calm down. If they gave the money to Howdy Doody, it is not from the school budget. No money is being taken away from the school budget. Go rant on the school budget page. Wrong page. (side note-Even though NO MONEY FOR SCHOOLS IS INVOLVED IN ANY WAY HERE, you ARE aware, aren't you, that there are many people in Cobb County that aren't students and aren't parents either, aren't you? Just thought I would let you know about that one.)
reallocation
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November 14, 2013
Don't worry so much. Reallocation of existing property taxes has been going on ever since SPLOST taxes were invented. The money for SPLOST is (supposedly) dedicated, but the other taxes freed up by SPLOST sure ain't dedicated! So here we are. We freed up our property taxes by paying for roads and schools with SPLOST, so now we get to pay for roads and schools and a new stadium for billionaires to let their millionaire playthings cavort in.
Kennesaw Voter
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November 14, 2013
Oh please can your hysterics. Our schools have more than enough money and have had plenty for years!!
New name
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November 14, 2013
Since the Braves will be in Cobb/Atlanta,

how about re-naming the location to:

Cat Lanta?
Smyrna Guy
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November 14, 2013
This was a dumb comment
support chickens
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November 14, 2013
Seems like a great deal to me. Cobb's contribution is capped so if overruns occur the Braves pay. The CID (mostly Cumberland businesses) and rental taxes make up almost all the rest of the funding. Why would there be complaints except for those with an agenda which includes starving Cobb development? We have seen that crowd post here before tima and again against everything that would improve Cobb. These same folks have no problem with a chicken coop as your neighbor. Go figure.
cluck cluck
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November 14, 2013
Two reasons: The complainers are: (one) caught in a time warp (and I mean in the 19XX's) and can't see anything good about anything that is new and modern; and (two) the complainers about schools--the schools have enough money, they just need to learn how to budget. You could give Cobb County Schools ten billion dollars and they would still scream we need twenty billion. Some people just aren't happy people and nothing will ever make them happy.
P. Revere
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November 14, 2013
Well, the commissioners and politicians are all behind this deal, and why not, after all "It’s a win-win deal for Cobb County and the Braves" according to Lee, and "it provides a fiscally sound, balanced funding model that takes advantage of the great opportunities provided by the Braves for economic development, job creation, at a good investment for Cobb Countians.” In addition, Goreham believes that "this is the next economic engine for Cobb County to provide revenue in so many different areas.... [and that] this is going to be a positive for the county for many years to come.”

Well, there's no denying that it's a "win-win' for the Braves, though, I'm not sure that those who live in the area of the Cumberland Community Improvement District, and who "will be the ones that will be making the largest investment in it" would see this as a "balanced" deal.

But, most importantly, the consensus from economists is that "There is little evidence of large increases in income or employment associated with the introduction of professional sports or the construction of new stadiums." The research is available which shows that these contracts are horrible for taxpayers. This is the same type of sales pitch that I heard with my family years ago in Cincinnati. It's a focus by commissioners and politicians on the vast economic benefits, but in reality, it's all a distraction. It's all sleight of hand. "Pay no attention to that man behind the curtain", focus instead on the shiny new stadium and how you can eat at the Cheesecake factory, then walk across a new bridge, take a new tram, or even teleport directly into your seat or whatever new idea they're pushing. They want their breaking ground photo opp. complete with shiny new hard hat and shovel.

Knowing that my parents in Hamilton County are paying and will continue to pay until at least 2032 frustrates me to no end, and I wish I could turn back the clock. At least you guys still have a chance; unfortunately, the clock is ticking. Take a look at the below-listed articles for more information and please heavily scrutinize this deal.



"Atlanta Braves 1, Cobb County 0"

http://blog.al.com/birmingham-news-commentary/2013/11/atlanta_braves_1_cobb_county_0.html

"Sports Stadiums and Economic Development: A Summary of the Economics Literature"

http://www.sabernomics.com/sabernomics/index.php/2008/05/sports-stadiums-and-economic-development-a-summary-of-the-economics-literature/

"Stadium Boom Deepens Municipal Woes"

http://www.nytimes.com/2009/12/25/sports/25stadium.html?pagewanted=1

"As Stadiums Vanish, Their Debt Lives On"

http://www.nytimes.com/2010/09/08/sports/08stadium.html?pagewanted=all&_r=0

"A Stadium's Costly Legacy Throws Taxpayers for a Loss"

http://online.wsj.com/news/articles/SB10001424052748704461304576216330349497852

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