Cobb waiting for official approval of stadium bond financing - Daily Agenda - Atlanta Magazine
 
 
 

Cobb waiting for official approval of stadium bond financing

Judge Robert Leonard presided over a six-hour hearing on Monday

Cobb citizen interveners Larry Savage, James Strawn, and Gary Pelphrey (left to right)
Jim Walls

Cobb County officials went into extra innings Monday trying to get bond financing approved for the Atlanta Braves’ new stadium. But it’ll be weeks before they know if they won.

During a six-hour hearing that lasted until 7:30 p.m. on Monday, Superior Court Judge Robert Leonard heard arguments for and against Cobb’s plan to issue up to $397 million in bonds to help pay for construction of the ballpark, projected to open in 2017. Leonard said he hopes to decide whether to validate the bonds by July 31.

Leonard presided Monday in place of Superior Court Judge LaTain Kell, who recused himself because of ties—first reported by Atlanta magazine—that he and his mother have with the Cobb County Chamber of Commerce and Cobb Commission Chairman Tim Lee. Kell serves on the chamber’s board and his mother, the chamber’s 2006 East Cobb Citizen of the Year, chaired Lee’s 2012 re-election campaign. (Leonard is a 2013 graduate of the chamber’s Leadership Cobb program.)

Monday’s hearing was held under a state law that allows residents of a city or county to intervene when their local government asks a court to approve plans for a bond issue. They have a right to appeal if dissatisfied with the judge’s ruling.

The debate at Monday’s hearing–fueled by the Tea Party sentiments of some opponents—centered on the limits that Georgia’s law and Constitution places on the powers of county governments. Opponents contend Cobb overreached its authority by creating new tax districts and fees to help pay for the project and by agreeing to take on new debt without asking for voters’ approval.

Government lawyers countered that a public referendum was not required because the Cobb-Marietta Coliseum and Exhibit Hall Authority, not the county government, will incur the debt. Cobb County will pay the authority up to $18.9 million a year–and the Braves $6.1 million–to pay off the bonds.

Cobb will make those payments under an intergovernmental agreement that, its lawyers say, exempt the deal from needing voter approval. Critics argued that the arrangement is a sham.

The agreement “was created out of thin air for no reason other than to circumvent the Constitution,” Larry Savage, one of nine citizens who petitioned to block the bond validation, told judge Leonard. “That’s the kind of government action that the Constitution is designed to protect us from.”

Savage argued that the court’s approval of the agreement would “create a template that will be used statewide” to issue bonds without voter approval. “There’s no local government in this state that can’t replicate that at will,” he added.

Leonard repeatedly cut off interveners’ attempts Monday to delve into county officials’ negotiations with the Braves or their decisions on structuring the financing package. “You want me to go back and Monday-morning-quarterback all the negotiations,” Leonard said. “That’s not my role.”

Under Georgia law, the judge must decide whether the stadium project is “sound, feasible and reasonable” and whether security to pay off the bonds is sufficient. He must also determine whether the intergovernmental agreement complies with Georgia law.

The interveners repeatedly hammered at the county’s plan to issue revenue bonds, which must be paid off with revenue generated by the project, rather than general obligation bonds that require a public referendum. Cobb plans to use property taxes and new levies on car rentals and hotel rooms to offset the cost of servicing the bonds.

“How are extra taxes defined as revenue generated by the project?” asked intervener Christopher Peters, a software developer.

Peters noted that Cobb County pledged to use higher property taxes, if necessary, to make debt payments. “If county taxpayers are on the line for these, if we’re on the hook, I think these are general obligation bonds,” he argued.

Blake Sharpton, a lawyer for the county, told the judge that Cobb’s annual $19.1 payment, derived from sales and property taxes generated by the stadium and related development, will pay for the bonds. New fees and taxes, he said, should be considered “budgetary tools” used by Cobb County and are irrelevant to the judge’s deliberations.

Opponents also questioned whether the stadium will meet the legal definition of a public facility. The coliseum authority will own the ballpark, but the Braves will have virtually complete control of stadium operations and an exclusive option to buy it after 30 years at half its market value.

The stadium, said citizen speaker Tucker Hobgood, is “really a Braves thing that the public is simply putting money into.”

Kevin Moore, the authority’s lawyer, noted that he disagreed with the interveners but applauded their role in vetting plans for the bond financing.

“It’s a good thing,” Moore said. “It’s what makes us great.”

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