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
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.