Gwinnett stadium a winner for county?
Submitted by tdemel on Mon, 10/12/2009 - 11:41am
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By Patrick Fox
The Atlanta Journal-Constitution
On the field, the Gwinnett Braves had a pretty good season: an 81-63 record and a playoff berth.
The team drew about 423,000 in its 71 home games and an additional 4,000 for two home games during the postseason.
But the bottom line is less clear for their stadium, although county officials say the ball field will generate enough revenue on its own to cover its bond payment.
The $64 million, taxpayer-financed structure generated a rancor among residents, particularly after cost estimates rose by $19 million after construction was under way.
Final revenue figures are not in, but current numbers show the county will be close to covering its first round of loan payments of $2.6 million this year. The annual payments fluctuate between $2.1 million and $2.6 million per year for the next 30 years.
After one baseball season, the stadium’s scorecard shows that both its support and opposition remain strong.
Opponents have cited the project repeatedly as a burden on a county facing financial difficulties. Earlier this year, Gwinnett commissioners voted to cut nearly $26.2 million from the county budget for 2009.
Don Shaw, a local blogger and stadium opponent, remains critical that the county paid for the ballpark’s increased construction costs.
“It was a poor decision for the Board of Commissioners to make when they were well aware of the economic climate up ahead,” he said.
The money taken from the general fund to cover the increased costs had been earning interest for the county, he said.
“If you figure $19 million at 3 percent, they’ve lost all that revenue,” Shaw said.
Proponents say the stadium is an asset to the community, that it was meant to add to the quality of life in Gwinnett more than to generate income for the county.
Preston Williams, who served as point man for the project for the Gwinnett Convention and Visitors Bureau, said the first year was a rousing success.
“The venue is doing exactly what was intended from the inception: It is serving the people of Gwinnett as a destination for family fun and entertainment. It has created jobs,” he said.
County Commissioner Bert Nasuti, who led the campaign for a minor-league team, said county residents who attended games “had an experience they just cannot have anywhere else but in minor-league baseball.”
“My constituent feedback on baseball and folks’ experience at the park was overwhelmingly positive all season long,” Nasuti said.
Steve Labovitz, an Atlanta lawyer who specializes in public-private partnerships, still sees great economic potential in the stadium, “assuming the economy turns around.”
“There’s going to be a highly designed mixed-use development that will surround the stadium,” Labovitz said. “Those kinds of things will bring in a lot of revenue to the county.”
The deal has already worked well for the Braves. Mike Plant, the organization’s executive vice president for business operations, said attendance exceeded the club’s expectations, and the team sold about half of the 21 luxury suites.
Critics have often argued that the county gave away too much to the Braves.
The funding formula for the stadium calls on the Braves’ owners, Liberty Media, to pay the county $250,000 a year for rent, with the price adjusted every five years based on the Consumer Price Index.
The team also must pay the county $1 for every ticket sold, and it splits the parking revenue evenly with the county.
The county’s side of the stadium funding plan includes a $400,000 contribution from the Gwinnett Convention and Visitors Bureau and then several variables, some that worked better than others.
The county hoped to raise $700,000 for the stadium through a rental car tax. In reality, it brought in $978,000 from May 2008 to June 2009.
But even that drew criticism. John C. Bradbury, an economist at Kennesaw State University, said connecting the rental car tax to the stadium was “a sleight of hand by government officials.”
“Without the stadium, the tax revenue could be used for public safety or other government services that the county has recently cut,” Bradbury said.
“The car tax generates revenue from Gwinnett residents with car trouble and transfers it to Liberty Media shareholders. “
Bradbury is also critical of the contribution from the Convention and Visitors Bureau, which he called “just a reshuffling of tax revenue.”
“To say that the stadium is paying its way is like a teenager declaring he’s making car payments all on his own while using a $300 monthly allowance from his parents to help cover the payments,” he said.
The biggest hole in the stadium finance plan for the year was the sale of naming rights for the stadium. The county budgeted $300,000 for the sale, although it had hoped to raise as much as $1 million. Instead, the recession apparently deterred all potential buyers from acquiring corporate sponsorship of the ballpark.
The county initially placed the Convention and Visitors Bureau in charge of marketing naming rights, but that duty transferred to the Braves in September. The new deal gives the Braves the first $350,000 and the county the next $350,000. Both sides will split anything beyond that.
Nasuti remains confident about the stadium’s future, saying the “G-Braves brand has caught on in Gwinnett.”
“Now that the team is here and settled,” Nasuti said, “the Braves marketing arm and front office will have more opportunities to become more involved in the community and continue to build a fan base.”
-- Staff writer Carroll Rogers contributed to this article
Gwinnett County’s financing of the baseball stadium for the Atlanta Braves’ AAA franchise relies on a five-part formula to generate enough to pay its annual bond obligation. The county will pay $2.6 million this year. It will pay $2.1 million annually from 2010 to 2013. The payments return to $2.6 million annually after that until the bonds are paid off in 2038.
The county received $200,000 June 1 and expects at least another $200,000 in October. The contract with the Braves gives the county $1 for every ticket sold.
Bottom line: $427,000
The Braves and county evenly split parking fees. The county received $22,342 in June for stadium parking in April. It will receive the balance in October for attendance from May to September.
With game attendance in April at 60,120, this means each vehicle averaged about four ticket-holders.
By dividing the attendance of 367,400 from May to September by four, it comes to about 91,000 vehicles paying a minimum $3 parking fee, meaning an additional $136,500 for the county.
The county finance office puts the figure higher. It is anticipating at least the full $200,000.
Bottom line: $159,000-$225,000
The Braves pay the county $250,000 a year for rent.
Bottom line: $250,000
Officials had projected up to $1 million a year for the stadium’s naming rights, but no corporate sponsor has been found.
Bottom line: $0
The Convention and Visitors Bureau gets its money from the county through a hotel-motel tax .
Bottom line: $400,000
Rental vehicle tax
The county took in $978,000 in revenues from the tax from May 2008 to June 2009. Current figures show collections averaging about $69,900 a month, or about $838,000 a year
Bottom line: $838,000