Falcons sell Atlanta council on merits of new dome
ATLANTA — Falcons President and CEO Rich McKay on Wednesday told a skeptical Atlanta City Council that if the deal the team negotiated for a new $948 million, retractable-roof stadium does not come to fruition, the organization would be forced to look for a better deal elsewhere in the metro area.
McKay said it was not a threat, but with the Falcons’ lease for the Georgia Dome set to end in 2017, the team does not want to stay in the building that it has called home since 1992 beyond that point.
“We just don’t believe it makes any sense,” he said of extending the dome’s lease.
The comments came as the start of what Atlanta Mayor Kasim Reed told the Atlanta Journal-Constitution on Friday was a “big public conversation” on the stadium. In this case, the forum was the city council’s finance/executive committee.
Depending on the final funding mechanism chosen for the stadium — a project that is not universally popular among the public — the city council might have to vote to approve it, as bonds could be issued through the city’s economic development arm, Invest Atlanta.
Numerous officials and community leaders took to the podium to explain to the council not only why the stadium would be worth the use of public funds, but also how they arrived at the decision.
For example, Frank Poe, the executive director of the Georgia World Congress Center Authority, which operates the dome and on whose 200-acre campus the new facility would be built, said an open-air stadium would cost less than $700 million. The Falcons would prefer an open-air stadium, but to accommodate the potential of hosting premium events – like the NCAA Final Four, the Southeastern Conference football championship, the Chick-fil-A Bowl – the organization agreed to a retractable-roof facility that would replace the dome. Among the solutions that were originally debated but scuttled was operating the dome next to an open-air stadium.
Regarding the notion of the Falcons moving to the suburbs, if no downtown stadium deal, McKay said, “That’s just a reality as our lease is going to end and we could do it for a lot less cost.” He added that moving to the suburbs would not be the organization’s first preference.
“I hope you understand we have tried to make it an opportunity for Atlanta,
he said. “It’s not a demand-or-else-project.”
McKay said the only reason the Falcons went to the lengths they did in the current deal was because of owner Arthur Blank’s devotion to downtown Atlanta. He detailed the amount of money that Blank had given through his family foundation and said the foundation’s president would be dispatched to Atlanta neighborhoods affected by the project to see in what ways it could help.
However, McKay said of the terms of the deal, which includes, in his words, “100 percent of the risk,” in terms of operational costs and maintenance (which is roughly $4 to $5 million per year for the roof alone) that, “no question, we would not do it” were it not for Blank’s preference for staying in Atlanta.
As a result, McKay painted the deal as a good one for the city. Earlier in the session, council members questioned Atlanta Chief Operating Officer Duriya Farooqui as to why the city needed to invest so much money in a new stadium — in the hopes of hosting a Super Bowl — if New Orleans just hosted one in the 38-year-old Superdome. McKay said that New Orleans spent $350 million for an eight-year lease with the Saints, while the Falcons would commit to a 30-year lease, which, on a proportional basis, would be cheaper.
Atlanta has not hosted a Super Bowl since January 2000 when the city was hit by ice storms, which seemingly have ruined its chances for hosting the game ever since. William Pate, president of the Atlanta Convention and Visitors Bureau, said he asked NFL Commissioner Roger Goodell in 2010 how the city could host another Super Bowl.
“He said, ‘You need to get a new stadium,’” Pate told the council. “That’s straight from the man himself.”
Farooqui told the council that by not building the new stadium and forgoing the possibility of hosting a Super Bowl, the city would lose out on a potential (single-event) economic impact of up $250 million.
McKay also said if the Falcons got the new stadium, they would help the city’s bid to host the new Bowl Championship Series national championship football game. Atlanta could possibly be awarded a Major League Soccer franchise, as well.
“MLS, to us, is something we see in a new facility as having a real possibility,” McKay said, adding that it would add about 20 games, as well as new jobs.
Jobs were a major argument in favor of the project. The council was told the project itself would add 1,400 construction jobs locally and 4,500 across the state, not to mention new retail and restaurant jobs near the new stadium. Pate said the dome hosts 60 events annually, including corporate ones, but a new facility could boost that figure by 20 percent.
In terms of financing — the crux of the council’s decision — the council was told by Invest Atlanta President and CEO Brian McGowan the bonds would not affect the city’s bond capacity or credit, nor would it limit its capacity or credit.
The bonds would be issued based on 39.3 percent of a hotel-motel tax that the Georgia General Assembly re-authorized in 2010. The council members also heard testimony explaining how the city’s general fund would not be affected by any possible shortfalls in the hotel-motel tax, which is paid overwhelmingly by out-of-state visitors.
The amount in which the bonds would be issued would cover any potential shortfalls.