When they surprised the public with plans for a new ballpark for the minor-league Braves a year ago, Gwinnett County officials said the stadium would cost $40 million and would pay for itself from Day One.
Neither statement has come true.
So far, county commissioners have committed $31 million in taxpayer cash for the stadium. And in September, they approved increasing the ballpark’s cost by nearly 50 percent for amenities and changes, much of which aren’t required for the Braves to play ball.
Still, three of Gwinnett County’s top elected officials say they stand by their decision to put taxpayer money into the stadium —- which now carries a $64 million price tag —- even as they slash scores of county jobs and cut services amid a recession.
“Our board was completely unanimous on baseball Jan. 15 of last year, and I think our board will be completely unanimous on baseball today,” said Commissioner Bert Nasuti, the project’s chief proponent.
Gwinnett Board of Commissioners Chairman Charles Bannister, Commissioner Kevin Kenerly and Nasuti said they would have voted for financing the stadium last year even if they had known what they know now about the economy and the county’s finances.
“I think we would have voted for it,” Bannister said. “It would have been much cleaner —- perhaps prettier —- publicwise if all the dollars had been in the accounting upfront.”
It’s too late to back out of the financing for the ballpark. The county’s development authority issued $33 million in bonds for it last year. And Gwinnett is legally required to spend the proceeds from those bonds on the stadium, County Attorney Karen Thomas said.
Gwinnett is now counting on several sources of revenue to pay off that debt, which will total more than $77 million over 30 years. Those revenue sources are: stadium rental, ticket and parking revenue; selling the naming rights to the stadium; county rental car taxes; and contributions from the Gwinnett Convention and Visitors Bureau. Under the deal, the Braves will get to keep substantial portions of the stadium ticket and parking revenue and a share of the proceeds from selling the stadium’s naming rights.
With construction of the ballpark more than 70 percent complete, the county wired on Jan. 2 its first semi-annual debt payment of $1.5 million. Four days later, the commissioners voted to cut nearly $26.2 million from the county’s 2009 budget.
Meanwhile, home foreclosures have been sapping county property tax revenue, and the recession has cut sales tax income. The county has eliminated 115 jobs in the planning, parks and water resources departments, most of which were filled, and postponed adding 88 positions for public safety and the courts. Commissioners said they eliminated some of the positions because they were unnecessary, not because the county is short of money.
To balance their budget this month, the commissioners pulled about $12 million out of the county’s reserve fund. That is equal to the amount of taxpayer money the commissioners initially approved for the ballpark in January of last year. Commissioners say they will adopt a final county budget March 3 after weighing more job and service cuts. Things aren’t looking up for Gwinnett’s revenue projections.
“At best, it’s the same. And it possibly could be a little bit diminished,” said Gwinnett County Administrator Jock Connell, who made the claim last year that the stadium “would pay for itself from Day One.” “They are tough times. I am 51 years old, and I don’t think I have quite seen times like this before.”
At the same time, the county is having trouble selling the naming rights for the stadium, which it expected to be a major source of cash to pay off the debt. Selling the naming rights was projected to raise as much as $1 million annually, though the Braves are supposed to get a substantial portion. If the county does not land a deal before September, the Braves will have the right to sell the naming rights and keep more of the money.
“We are not very optimistic about it at this point given the economic climate right now,” Preston Williams, the Gwinnett Convention and Visitors Bureau’s point man for the construction project, said about selling the naming rights by Sept. 1. “I don’t think the business environment right now would lend itself to a significant naming rights deal.”
The visitors bureau is also projecting a loss of $80,000 to $100,000 in rental income because the Arena Football League canceled its 2009 season. Williams, however, said that amount could be replaced easily through concert bookings.
Commissioner Shirley Lasseter, who was not on the board when it voted for the stadium funding last year, declined to say what position she would have taken on the issue at the time. Commissioner Mike Beaudreau did not respond to repeated requests for comment.
Nasuti is betting the ballpark will help boost Gwinnett’s economy. Conventions, Sports & Leisure International, the consulting company hired to study the feasibility of bringing baseball to the county, said a $38 million ballpark would generate $6.3 million to $8 million in net new spending each year, create 130 to 170 jobs and generate between $267,000 and $342,000 a year in taxes.
“You don’t shut down economic development opportunities when times are bad,” Nasuti said. “That is when you look at economic development opportunities.”
But critics question the economic benefits projected for the stadium and fear the costs for the ballpark will increase.
“These stadiums always go over budget,” said J.C. Bradbury, a Kennesaw State University sports economist who has been critical of the county’s handling of the stadium deal. “I will be more shocked if the budget doesn’t go up.”
STADIUM FINANCING
Gwinnett County taxpayers have already contributed $5 million to buy the land for the stadium and $26 million for construction. Also, the county borrowed $33 million for the stadium last year, and it’s obligated to pay back an average of about $2.5 million annually for 30 years, a total of more than $77.5 million. Here’s where the county expects to get the money to pay the annual debt:
COUNTY’S STADIUM REVENUE
> Rent: $250,000
Paid by the Braves, adjusted every five years based on Consumer Price Index. Estimated average annual revenue over 30 years, based on 3 percent increases in CPI: $365,000. The rent is due in two equal installments. The first $125,000 is due April 1 and the second installment is due June 1.
> Parking: $200,000
County splits net parking revenue with the Braves, who will operate the lots. Estimate is based on projected attendance and three ticket holders per car being charged $3 a car. Parking revenue is due on June 1 and the balance on Oct. 15.
> Ticket fee: $400,000 to $468,000
Braves will pay the county $1 for every ticket sold, with a $400,000 minimum. A feasibility study projected attendance of 468,000 annually. The ticket revenues are to be paid in two installments: $200,000 is due June 1, with the balance due on Oct. 15.
> Naming rights: $100,000 to $650,000
This is the biggest variable. The Braves get $350,000 a year; the county gets the rest. Estimates range from a total deal worth $450,000 to $1 million annually. So far, there’s no deal.
> County events: Negligible
County can use stadium for 10 days per year, subject to the Braves’ approval. County reimburses Braves for operations and cleanup on those days. If the county charges for admission, it would likely be to cover those expenses. The Braves keep all concession sales on those days.
OTHER REVENUE
> Rental car tax: $600,000 to $800,000
The revenues from this tax, which took effect on April 1, are exceeding expectations. The county budgeted $425,000 in revenue for 2008. Collections to date for 2008 total $571,655. The county has budgeted $700,000 in revenue for this year.
> GCVB contribution: $400,000 maximum
The Gwinnett Convention and Visitors Bureau gets its money from the county, which collects a hotel-motel tax to pay off debt on the Gwinnett Arena and to underwrite the GCVB operation. The agency, which runs the Arena, also gets money from the Arena’s profits. The GCVB has already put $2 million in reserves to pay its share of the debt for the first five years.
Sources used in compiling this information: Documents obtained under Georgia’s Open Records Act from Gwinnett County government and the Gwinnett Convention and Visitors Bureau and interviews with county leaders and experts in sports economics and marketing.
Note: All figures are annual.
Staff
Map locates stadium site. Inset map outlines area of detail in
When they surprised the public with plans for a new ballpark for the minor-league Braves a year ago, Gwinnett County officials said the stadium would cost $40 million and would pay for itself from Day One.
Neither statement has come true.
So far, county commissioners have committed $31 million in taxpayer cash for the stadium. And in September, they approved increasing the ballpark’s cost by nearly 50 percent for amenities and changes, much of which aren’t required for the Braves to play ball.
Still, three of Gwinnett County’s top elected officials say they stand by their decision to put taxpayer money into the stadium —- which now carries a $64 million price tag —- even as they slash scores of county jobs and cut services amid a recession.
“Our board was completely unanimous on baseball Jan. 15 of last year, and I think our board will be completely unanimous on baseball today,” said Commissioner Bert Nasuti, the project’s chief proponent.
Gwinnett Board of Commissioners Chairman Charles Bannister, Commissioner Kevin Kenerly and Nasuti said they would have voted for financing the stadium last year even if they had known what they know now about the economy and the county’s finances.
“I think we would have voted for it,” Bannister said. “It would have been much cleaner —- perhaps prettier —- publicwise if all the dollars had been in the accounting upfront.”
It’s too late to back out of the financing for the ballpark. The county’s development authority issued $33 million in bonds for it last year. And Gwinnett is legally required to spend the proceeds from those bonds on the stadium, County Attorney Karen Thomas said.
Gwinnett is now counting on several sources of revenue to pay off that debt, which will total more than $77 million over 30 years. Those revenue sources are: stadium rental, ticket and parking revenue; selling the naming rights to the stadium; county rental car taxes; and contributions from the Gwinnett Convention and Visitors Bureau. Under the deal, the Braves will get to keep substantial portions of the stadium ticket and parking revenue and a share of the proceeds from selling the stadium’s naming rights.
With construction of the ballpark more than 70 percent complete, the county wired on Jan. 2 its first semi-annual debt payment of $1.5 million. Four days later, the commissioners voted to cut nearly $26.2 million from the county’s 2009 budget.
Meanwhile, home foreclosures have been sapping county property tax revenue, and the recession has cut sales tax income. The county has eliminated 115 jobs in the planning, parks and water resources departments, most of which were filled, and postponed adding 88 positions for public safety and the courts. Commissioners said they eliminated some of the positions because they were unnecessary, not because the county is short of money.
To balance their budget this month, the commissioners pulled about $12 million out of the county’s reserve fund. That is equal to the amount of taxpayer money the commissioners initially approved for the ballpark in January of last year. Commissioners say they will adopt a final county budget March 3 after weighing more job and service cuts. Things aren’t looking up for Gwinnett’s revenue projections.
“At best, it’s the same. And it possibly could be a little bit diminished,” said Gwinnett County Administrator Jock Connell, who made the claim last year that the stadium “would pay for itself from Day One.” “They are tough times. I am 51 years old, and I don’t think I have quite seen times like this before.”
At the same time, the county is having trouble selling the naming rights for the stadium, which it expected to be a major source of cash to pay off the debt. Selling the naming rights was projected to raise as much as $1 million annually, though the Braves are supposed to get a substantial portion. If the county does not land a deal before September, the Braves will have the right to sell the naming rights and keep more of the money.
“We are not very optimistic about it at this point given the economic climate right now,” Preston Williams, the Gwinnett Convention and Visitors Bureau’s point man for the construction project, said about selling the naming rights by Sept. 1. “I don’t think the business environment right now would lend itself to a significant naming rights deal.”
The visitors bureau is also projecting a loss of $80,000 to $100,000 in rental income because the Arena Football League canceled its 2009 season. Williams, however, said that amount could be replaced easily through concert bookings.
Commissioner Shirley Lasseter, who was not on the board when it voted for the stadium funding last year, declined to say what position she would have taken on the issue at the time. Commissioner Mike Beaudreau did not respond to repeated requests for comment.
Nasuti is betting the ballpark will help boost Gwinnett’s economy. Conventions, Sports & Leisure International, the consulting company hired to study the feasibility of bringing baseball to the county, said a $38 million ballpark would generate $6.3 million to $8 million in net new spending each year, create 130 to 170 jobs and generate between $267,000 and $342,000 a year in taxes.
“You don’t shut down economic development opportunities when times are bad,” Nasuti said. “That is when you look at economic development opportunities.”
But critics question the economic benefits projected for the stadium and fear the costs for the ballpark will increase.
“These stadiums always go over budget,” said J.C. Bradbury, a Kennesaw State University sports economist who has been critical of the county’s handling of the stadium deal. “I will be more shocked if the budget doesn’t go up.”
STADIUM FINANCING
Gwinnett County taxpayers have already contributed $5 million to buy the land for the stadium and $26 million for construction. Also, the county borrowed $33 million for the stadium last year, and it’s obligated to pay back an average of about $2.5 million annually for 30 years, a total of more than $77.5 million. Here’s where the county expects to get the money to pay the annual debt:
COUNTY’S STADIUM REVENUE
> Rent: $250,000
Paid by the Braves, adjusted every five years based on Consumer Price Index. Estimated average annual revenue over 30 years, based on 3 percent increases in CPI: $365,000. The rent is due in two equal installments. The first $125,000 is due April 1 and the second installment is due June 1.
> Parking: $200,000
County splits net parking revenue with the Braves, who will operate the lots. Estimate is based on projected attendance and three ticket holders per car being charged $3 a car. Parking revenue is due on June 1 and the balance on Oct. 15.
> Ticket fee: $400,000 to $468,000
Braves will pay the county $1 for every ticket sold, with a $400,000 minimum. A feasibility study projected attendance of 468,000 annually. The ticket revenues are to be paid in two installments: $200,000 is due June 1, with the balance due on Oct. 15.
> Naming rights: $100,000 to $650,000
This is the biggest variable. The Braves get $350,000 a year; the county gets the rest. Estimates range from a total deal worth $450,000 to $1 million annually. So far, there’s no deal.
> County events: Negligible
County can use stadium for 10 days per year, subject to the Braves’ approval. County reimburses Braves for operations and cleanup on those days. If the county charges for admission, it would likely be to cover those expenses. The Braves keep all concession sales on those days.
OTHER REVENUE
> Rental car tax: $600,000 to $800,000
The revenues from this tax, which took effect on April 1, are exceeding expectations. The county budgeted $425,000 in revenue for 2008. Collections to date for 2008 total $571,655. The county has budgeted $700,000 in revenue for this year.
> GCVB contribution: $400,000 maximum
The Gwinnett Convention and Visitors Bureau gets its money from the county, which collects a hotel-motel tax to pay off debt on the Gwinnett Arena and to underwrite the GCVB operation. The agency, which runs the Arena, also gets money from the Arena’s profits. The GCVB has already put $2 million in reserves to pay its share of the debt for the first five years.
Sources used in compiling this information: Documents obtained under Georgia’s Open Records Act from Gwinnett County government and the Gwinnett Convention and Visitors Bureau and interviews with county leaders and experts in sports economics and marketing.
Note: All figures are annual.
Staff
Map locates stadium site. Inset map outlines area of detail in Gwinnett County relative to metro Atlanta.
No comments:
Post a Comment