Braves Stadium Bond Dispute Moving to GA. Supreme Court

 

Lawyers for Cobb County government say their plan to borrow nearly $400 million for the new Atlanta Braves stadium without a public vote is legal, because the bond issuance isn’t considered “debt within the meaning of the Georgia Constitution.”

That’s according to the county’s response to an appeal of a Cobb Superior Court judge’s July decision to green light the county’s borrowing plan — a normally routine process known as bond authorization.

Three Cobb County residents have appealed the authorization to the state’s high court, which will hear the case Feb. 3. The county wants to borrow up to $397 million — $368 million for construction of the new stadium; the rest to cover borrowing costs and about 15 months of interest on the debt.

Georgia law says that local governments must have a referendum before borrowing money. But the county’s response to the appeal, filed two weeks ago, says the Supreme Court has held as legal similar bond issuance for retail developments, wastewater treatment plants and airports.

The key to the county’s argument is that they are not issuing the bonds — that will be done by the quasi-governmental Cobb-Marietta Coliseum and Exhibit Hall Authority. They county is pledging $18 million annually to cover the debt, and will use a combination of property taxes (new and existing), new hotel room fees, a new rental car tax and the existing hotel-motel tax to raise those funds.

“This court has time and again upheld the validity of contracts authorized by (intergovernmental agreements) against attacks asserting that such contracts were merely efforts to circumvent (referendum) requirements of the debt clause,” the brief says.

But attorney Tucker Hobgood, one of the three people challenging the bond authorization, said the cases cited by the county involved building facilities to serve the public — transportation facilities, sewage plants or airports.

Hobgood said the notion that the county is not taking on debt for the project “defies common sense.” The intergovernmental agreement between the county and the exhibit hall authority specifically says the county will raise property taxes even more to pay for the project, if necessary.

“They’re arguing parks and recreational areas includes professional baseball parks,” Hobgood said. “They’re trying to say that because of the slang, that’s what the people who wrote the Constitution meant — as opposed to what the rest of America thinks of as a public park.”

County officials declined to comment on the response to the appeal Friday. But Commission Chairman Tim Lee told the Marietta newspaper that the bond authorization was “appealed … by a bunch of folks that just don’t want it to happen. They’re not really arguing on the basis of law. There’s really no argument on the basis of law.”

The county’s brief says there is “no relevant legal authority” in Hobgood’s distinction between a park and a stadium.

Hobgood “asserts … that a patron’s payment for the right to attend a professional sports game takes such activity out of the purview of the term ‘recreation,'” the county’s brief says. “According to (Hobgood), paying for the privilege of sitting in an outdoor baseball park and enjoying the national pastime is ‘completely different’ than paying for the privilege of sitting in a golf cart and enjoying a round of golf.

Hobgood “would have this court, rather than the governing body of the county, determine which types of recreation to provide for its citizens and residents.”

BRAVES STADIUM BY THE NUMBERS

Budget: $622 million

County borrowing: Up to $397 million

Annual payments: Up to $25 million

County revenue to pay off the debt:

* $8.6 million: Existing county-wide property tax

* $6.1 million: Braves rent

* $5.1 million: New tax on businesses in Cumberland area

* $2.7 million: New $3 nightly hotel room fee

* $940,000: existing hotel-motel room tax

* $400,000: new rental car tax in unincorporated Cobb

Note: The county also has pledged $14 million in special purpose sales tax revenue dedicated to transportation, and the Cumberland Community Improvement District has pledged $10 million cash.

This article was republished with permission from the original author, Mr. Dan Klepal.

 

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