Cobb County Stadium Home of the 2017 Atlanta Braves
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- The $17.9 million payment will be generated by the following revenue
- Cobb County Repayment Schedule
- Cobb-Marietta Coliseum and Exhibit Hall Authority Repayment Schedule
- Stadium Cost $672,000,000
- Overall Investment Investment %
- Total $672,000,000
- Atlanta Braves Annual Contributions
- Total Contributions 6,100,000.00
- Total Contributions $17,900,000.00
Cobb County Stadium
Home of the 2017 Atlanta Braves Facility Finance Assignment North Carolina State University PRTM 503 William Clemmons Fall 2013
Stadium Introduction……………………………………………………………….3 Funding Sources……………………………………………………………………4 Construction Repayment Schedules………………………………………………..5 Atlanta Braves Payment Schedule………………………………………………….6 Summary of funds………………………………………………………………….7 Stadium Cost Breakdown Chart……………………………………………………8 Economic Impact…………………………………………………………………...9 References………………………………………………………………………...10
Cobb County Stadium will soon be the home to Major League Baseball (MLB) Franchise, Atlanta Braves. This new stadium is being constructed to replace Turner Field, the Braves current home. The Atlanta Braves had a twenty year lease agreement with Turner Field that started in 1996 and will be ending in 2016 (Atlanta Braves, 2013). Rather than extending the Turner Field contract or spend $350 million on facility upgrades, the Atlanta Braves Organization has made plans to open the 2017 MLB season in Cobb County Stadium. Cobb County Stadium, designed by Harwood K. Smith (HKS, Inc.) Architecture Company, will occupy fifteen acres of a sixty acre lot, with the remaining space being used of parking, mixed uses development, and green space. The stadium will seat 42,000 fans and will be equipped with several state of the art upgrades (Harper, 2013). This new $672 million stadium will be owned by the Cobb-Marietta Coliseum and the Exhibit Hall Authority. The $672 million cost covers the stadium, land, parking, and related infrastructure (Oz, 2013). Cobb County Stadium will be paid for by the Atlanta Braves Organization and through revenue bonds from Cobb County. The Atlanta Braves will be responsible for 55% ($372 million) and Cobb County will assume the remaining 45% ($300 million) (Oz, 2013). In addition to the construction cost, the Atlanta Braves will be responsible all operating expenses. Cobb County, along with the Atlanta Braves Organization, are liable for the stadiums capital maintenance expense. The Atlanta Braves will have exclusive rights to use and operate Cobb County Stadium, however, the county does reserve the right to hold three special events at the stadium, excluding concerts and other professional sporting events. The Atlanta Braves also reserve the right to permit a third party to use the facility. The Atlanta Braves will have the rights to the stadium for thirty years following its projected open date in February 2017, with a five year extension option through the 2051 MLB season (Oz, 2013). The construction of Cobb County Stadium is scheduled to start in the summer of 2014, and no later than January 1, 2015. No further construction details have been released thus far. Funding Sources Funding for Cobb County Stadium will come from several different streams of public entities. The Atlanta Braves Organization will make a total contribution of $372 million. $280 million of those dollars will come upfront and be paid prior to the beginning of the 2017 season (Oz, 2013). The remaining $92 million, to be paid to Cobb-Marietta Coliseum and Exhibit Hall Authority by the Atlanta Braves, will be financed over a 30-year term. This amount will be paid by a guaranteed annual revenue of $6.1 million from facility operations (Oz, 2013). Over the past four years, the Atlanta Braves have seen a steady increase in revenue totaling $225 million in 2013 (The Business of Baseball, 2011). With the exception of the Cobb County’s share of the facility naming rights revenues, all other revenues generated will be retained by the Atlanta Braves. This includes parking and marquee advertising revenues. If this trend continues, the Braves would not have difficulties paying the remainder of their expenses. The $6.1 million will be broken down as follows (Oz, 2013): Rent: $ 3,000,000 Naming Rights Revenue $ 1,500,000 Parking Revenue $ 1,500,000 Advertising Revenue $ 100,000 Total: $ 6,100,000 Cobb County will contribute $300 million needed to complete the construction of the new stadium. The county will contribute $24 million up front, $14 million will be used to improve transportation, and a $10 million contribution will be made by the Cumberland Community Improvement District (CID) (Oz, 2013). The remaining $276 million will be financed through revenue bonds to pay for the rest of the stadium’s construction. Annual Payments of $17.9 million over a 30-year term will be made for the bond repayment. The $17.9 million payment will be generated by the following revenue: • $400,000 annually from a new 3% rental car tax (Oz, 2013). • $940,000 annually from an existing hotel/motel tax (Oz, 2013). • $2,740,000 annually from a new hotel/motel fee in the Cumberland Community Improvement District, a self-taxing special business district ($3/night special service fee) (Oz, 2013). • $5,150,000 annually from a property tax increase in that special business district (Oz, 2013). • $8,670,000 annually from reallocating Cobb County property taxes (no millage rate increase) (Oz, 2013). Cobb County Repayment Schedule 4.97% interest, $276,000,000 for 30 years = $17,892,843.93 annual payments
Cobb-Marietta Coliseum and Exhibit Hall Authority Repayment Schedule 5.17% interest, $92,000,000 for 30 years = $6,101,205.34 annual payments
Summary of Funds The Atlanta Braves financed $276 million at an interest rate of 4.97%, another $92 million at an interest rate of 5.17% both over a thirty-year term. The total amount of interest paid on the $276 million loan equaled $260,785,317.82, which yields a total of $536,785,317.82 that was repaid to Cobb County. The amount of interest paid on the $92 million loan was $91,036,160.10, yielding a total of $183,036,160.10, which was repaid to Cobb-Marietta Coliseum and Exhibit Hall Authority. At the end of the two thirty-year financing agreements, the Atlanta Braves will have paid a grand total of $719,821,478.92, which is $351,821,478 more than what they actually financed. Stadium Cost Breakdown
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