Atlanta opened its gleaming new Mercedes-Benz Stadium to a raucous college football crowd on Saturday night, as Alabama defeated Florida State 24-7 to kick off the season. The facility will primarily be the home of the NFL's Atlanta Falcons, who play their first regular-season game there against the Green Bay Packers on Sept. 18.
But it's hard to argue the gleam justifies the $1.5 billion price tag, of which taxpayers will foot nearly half.
What do taxpayers get for their forced investment of around $700 million? The niceties include a 1,100-foot-long, 360-degree scoreboard along the inside perimeter of the roof, a 16-story window with a stunning view of downtown Atlanta, and 1,264 beer taps serving 40 varieties. An adjacent 61,000-square-foot plaza outside includes a 73,000-pound falcon sculpture from a Hungarian artist.
Throw in a nonfunctioning retractable roof — it's supposed to open like a blooming flower — and suddenly the cost is no mystery. Steve Cannon, the chief executive officer of Falcons parent company AMB Group, told the Atlanta Journal-Constitution that the roof would remain in a closed position for an undetermined period of time. Rest assured, though, it will function at some point before the end of the 2017 seasons for the Falcons and Major League Soccer's Atlanta United.
This came after AMB Group assured fans the roof would be ready for the Falcons' first preseason game on August 26.
Mercedes-Benz Stadium will consume a whopping 39.3 percent of Atlanta's hotel tax revenue through 2050. That includes $200 million for the construction of the stadium and an estimated $500 million in additional revenue that will pay for financing, operating, and maintaining the stadium over three decades. Of course, it seems optimistic to project a 30-year-plus life span for Mercedes-Benz Stadium. The Falcon's old stadium is already being mothballed after just 25 years. And the Braves just left behind their stadium, Turner Field, after only 20 years of operation.
The implausible time frame is not the only fishy part of the deal. As always seems to be the case, taxpayers are forking over more than the stated cost of the stadium construction for infrastructure improvements. The pedestrian bridge that will allow fans to safely cross Northside Drive to reach the facility was originally supposed to cost $12.8 million. It ended up costing $23.2 million. But what's another $10 million in taxpayer cash when $700 million has already gone by the wayside?
Despite concerns about the economic benefits of the subsidies, the handouts only seem to be growing. A 2015 Taxpayers Protection Alliance report noted that nearly every NFL team had benefited from public subsidies, to the tune of $7 billion between 1995 and 2015. In the past two years alone, three cities (Atlanta, Las Vegas, and Minneapolis) and their respective states have committed nearly $2 billion in taxpayer funds toward NFL stadium projects.
TPA found that median income decreased and poverty rates increased (from 16 percent to 18.7 percent, more than twice the national rate of increase) in the 12 counties in which taxpayers paid for the majority of construction costs between 1995 and 2013. While inflation-adjusted national median household income increased 0.3 percent, household income dropped 5.7 percent in the 12 counties that footed most of a stadium bill.
For taxpayer stadium subsidies to ultimately benefit taxpayers, there must be plenty of spillover economic gains. Experts, however, question whether purported economic benefits really exist. Often, they say, the opposite happens. There's a crowding out as money gets shuffled around from one entertainment venue to another.
In a recent series of stories on the taxpayer implications of the new Las Vegas Stadium, University of Nevada-Las Vegas assistant economics professor Bill Robinson said that these hidden costs are a real concern in Sin City. The entertainment-rich oasis recently shelled out a record $750 million to contribute to the future $1.9 billion home of the NFL's Raiders.
"The issue with any stadium – for these things to be good for you – you've got to bring new money in," Robinson said. "If you don't go to the Blue Man Group on Sunday and instead go to the stadium then there's really no benefit."
Even so, Falcons owner Arthur Blank has bragged about the success of the project. And the Falcons have sold around $1 billion in corporate sponsorships for the facility, which will go to pay off the private – but not the public – financing of the stadium.
"I…think downtown Atlanta is very unique (and) the stadium itself is very unique. I think it sends the right message to many cities in terms of public-private partnerships," he said.
The true cautionary tales can be found in the cities that NFL teams are fleeing from. Alameda County taxpayers will soon feel that sting when they continue to pay the bill on the 1995 renovation of the Coliseum, which had lured Raiders back to Oakland from Los Angeles. Taxpayers will continue to pay $13 million annually through 2025 – five years after the Raiders are gone to Vegas.
So, Atlanta had best enjoy that new-stadium fever until it wears off. Hopefully, the Falcons won't follow the lead of other teams and ditch their shiny new stadium for another locale after a few years. With NFL fever at an all-time high, and wheelbarrows full of taxpayer money at the ready, other cities are pining for their turn to spend money on projects of their own.
Johnny Kampis is an investigative reporter for the Taxpayers Protection Alliance.
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