Charlie Harper: More than one blown lead

January 15, 2013 

During the tumultuous 2010 session of the General Assembly, one of the least talked about measures that passed the body was one categorized as "local legislation" for the city of Atlanta. The hotel-motel tax was extended until the year 2050, allowing for 7 percent to be added to all hotel bills within the city. Of that amount, 28.56 percent goes to the city of Atlanta; 22.5 percent goes to the Atlanta Convention and Visitors Bureau; 9.64 percent goes to the Georgia World Congress Center. Finally, 39.3 percent goes to finance debt service on the Georgia Dome, expected to be paid off in roughly 2017.

Of course, there was no need to extend a tax until 2050 for a building that will be debt free within the decade. The extension of the existing tax revenue was to lay the funding groundwork to build a new stadium -- before the public could weigh in.

The public, now significantly more aware of the plans, has yet to buy into the concept. The Atlanta Journal-Constitution is reporting that a new poll of statewide residents has 72 percent opposing the measure. The problem with proceeding isn't the tax -- that was taken care of in 2010. The issue is that the legislature must approve the borrowing capacity of the Georgia World Congress Center to $300 million, up from its current statutory requirement of $200 million.

The matter had been previously handled. The language allowing this was included in a 2011 bill that was ultimately vetoed by Governor Nathan Deal. Had it been signed, this would not be a debate. We would just be sitting around waiting for the Falcons to finish their season and announcements of the various groundbreakings and construction schedules to be forthcoming.

Instead, a stadium debate which the Falcons appeared to have won two years ago now has them playing from behind with respect to public perception. A governor beginning a two-year cycle of reelection isn't likely wanting to overtly irritate a prickly electorate, and a legislature that has become a bit more aware of their own public perception courtesy of a failed T-SPLOST vote and a strong demand for ethics reform seems less committed to direct $300 million of taxpayer dollars to a stadium whose primary beneficiary is one of Atlanta's wealthiest citizens.

The repayment of the debt isn't the crux of the issue. The Falcons are responsible for paying the GWCC approximately $2.5 million per year under the proposed new arrangement, but the bonds Georgia taxpayers are asked to guarantee will be repaid not by the team but by hotel motel revenue taxes, set to be underwritten at a 1.5 coverage ratio. That means that so long as hotel revenues in the city don't drop by more than a third, then the money will be generated to pay these bonds.

The Congress Center, likewise, is in a difficult situation. While they continue to have a world-class facility that attracts events such as the SEC Championship game, Final Four tournaments, and other national events which bring visitors to the city, they understand that if the Falcons move off their campus -- either for Atlanta's suburbs or another city entirely -- they will turn what would be a positive operating income to an annual loss. They, therefore, have become somewhat of a focal point making the case for the new stadium as proposed as part of their campus. It is being billed as a way to ensure that the GWCC can stay relevant well until the middle part of this century.

The problem with this perspective, however, remains one of priorities. A new stadium, next door to and ultimately replacing the current Georgia Dome, would be a nice thing to have. The question that will remain, throughout this debate, is whether there are not more pressing needs that could be addressed with this same revenue stream.

This was a debate that the Falcons once had won, before it seemed to have even started. Now, as the debate will continue throughout this session, there are other points of view to be considered and a skeptical public to be won over.

The Falcons will want the debate to be focused on the history and importance of the Georgia World Congress Center. Critics will point to continued infrastructure needs within the city of Atlanta which continue to go unfulfilled.

Both perspectives will receive deeper examination here as the legislature takes up this issue. The battle remains uphill. Most observers and even critics note the parallel between the team's on-field performance and the field they will play on in four or five years. All agreeing, of course, that a win next week against San Francisco and one more in New Orleans a couple weeks later would give the stadium plan a needed boost.

Charlie Harper, author and editor of the Peach Pundit blog, writes on Georgia politics and government; www.peachpundit.com.

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