- Atlanta Falcons Stadium Deal Will Help the Local Construction Industry
- March 11, 2013
- Law Firm: Chamberlain Hrdlicka White Williams Aughtry - Houston Office
It’s no secret that the construction industry in the Atlanta-metro area has been struggling (on life support) for at least the past three years. Before the recession, our city and region was thriving on meaty public and private construction projects and construction jobs were plentiful. When the recession hit, development and construction projects halted. Private construction all but evaporated, and competition for public construction projects has become fierce-to the point where contractors are taking jobs on razor thin profit margins, just to have work to keep their employees working and their doors open.
Now, the City has negotiated a deal with a private partner-Arthur Blank and the Atlanta Falcons to build a new $1 billion stadium-in which the City will be paying roughly 20% of the cost of the project. This is the largest single construction project to occur in this area in a long time. It is, without question, going to boost the local construction industry and bring back some of the construction jobs that have been lost in the past few years.
The Atlanta Business Chronicle reported on the stadium deal today. A full version of the story can be found here. For people who are not convinced that this project is a good thing for Atlanta, here are a few points from the article that I think are important:
The public contribution for stadium construction is capped at $200 million, which would come from the hotel-motel tax collected by the city - almost exclusively (more than 85 percent) from visitors and tourists, not residents of the city.
The existing hotel-motel tax revenue stream is the sole public funding source for the stadium construction and any risk associated with repayment is carried by the bond holders, not the city.
No property taxes or new taxes of any kind would be paid by or levied on city residents or businesses to fund construction of the new stadium. The city will not serve as a backstop for any debt associated with the construction of a new stadium and this agreement will not affect the city’s bond capacity or credit capacity.
It’s not every day that a billion dollar construction project comes along, and certainly Atlanta hasn’t seen a project of this magnitude in years. Hopefully, it will be a catalyst to more development and construction that will lead to steady growth in our local construction industry.