BRADENTON, Fla. — The Atlanta City Council late Monday approved terms of a public financing element supporting the construction of a nearly $1 billion stadium for the National Football League's Atlanta Falcons.
A resolution outlining the terms to provide $200 million of municipal bonds secured by a hotel-motel tax collected in Atlanta was approved 11-to-4 after hearing from about 50 speakers as well as Mayor Kasim Reed.
Many of the speakers asked the City Council to slow down the process of approving the resolution to ensure that it included the greatest benefit for communities adjacent to the new stadium, while others urged the council to move forward to ensure that the project brings new jobs and economic benefits to the city.
About $800 million for the cost of construction will come from the Atlanta Falcons, the NFL, and personal seat licenses.
The deal approved Monday includes funding for community improvements that will benefit neighborhoods surrounding the new stadium. Falcons' owner Arthur Blank has committed $15 million from a family foundation, and Atlanta's economic development agency, Invest Atlanta, will provide $15 million from a tax allocation district. Reed has pledged to help raise another $15 million from the private sector.
The City Council amended the bond resolution to require that the community improvement plan be developed by Invest Atlanta in concert with financing plans. Invest Atlanta will be the conduit issuing the $200 million of bonds for stadium construction.
The bond resolution, which also extends expiration of the hotel-motel tax to 2050 from 2020, was also amended to prohibit any city general fund revenues to backstop any portion of the project.
Another amendment increased the amount the team must pay for infrastructure costs to $70 million from $50 million, and increased team expenses for another $20 million if needed for land acquisition.
Council Member Michael Julian Bond, who brought the resolution to the council on behalf of the mayor, said the deal negotiated by the city and amended by the council provides a "real commitment" to the community that can transform neighborhoods and the face of downtown Atlanta.
After the vote, Reed said the city negotiated a fair deal, including the provision that prevents the city from funding a backstop for the bonds.
"If the financing fails, the only people who are going to be on the hook are the bondholders who went out and bought the bonds," he said.
Though there has been controversy over public financing for the Falcons' new stadium in addition to its impact on surrounding neighborhoods, Reed said the resolution provides authorization for a portion of the cost like other governments have done that includes a "better deal" for the city.
"We have a new 30-year commitment to keep the Atlanta Falcons downtown," he said.
Blank, the team's owner, said in a statement that the deal represents more than two years of discussion over a new facility "that serves the best interests of all involved, including the neighborhoods surrounding the new stadium.
"The actions taken [Monday] are also a critical step toward the completion of final agreement necessary to move the stadium project forward," said Blank.
Though the structure of the transaction for the stadium is not complete, Invest Atlanta is expected to issue 30-year bonds next year in a par amount of $226 million, which will include issuance costs and $15.5 million in funding for reserves should hotel-motel tax collections fall short of debt-service needs.
The enclosed Georgia Dome, where the Falcons currently play, eventually will be razed to make way for a retractable-roof, multi-purpose stadium.
