Atlanta residents want MB Stadium to pay $700mn in taxes

Article posted by Coliseum, February 11^th, 2019

Image: HOK

Weeks before the Super Bowl came to Mercedes-Benz-Stadium, with boosters estimating a $400 million boon to Atlanta’s economy, a group of local residents is fighting for the stadium itself to contribute to the pot, WFTV reported.

For a year and a half, some residents have argued that the stadium – which has been exempted from property taxes since it was built – should be paying into city, school and county tax funds. A lawsuit the group filed in 2017 estimates its tax bill at $26 million a year under June 2018 tax rates, the report stated.

If the suit filed against the Fulton County Board of Assessors were to succeed, it could have implications for other stadiums around the country that also are exempted from property taxes.

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Over the life of a 30-year agreement the Falcons have to use the stadium, it might generate more than $700 million in property taxes, according to estimates by attorney Wayne Kendall, who is representing the residents who filed the suit. His estimate is based on the $1.5-billion stadium paying current property tax rates for Fulton County, Atlanta and the Atlanta Public Schools across three decades.

“I just believe the public is getting screwed on the deal,” Kendall said. “The Falcons aren’t paying the $26 million they should be paying, and everyone else will have to make up the difference.”

Fulton County property values have skyrocketed in recent years, and residents have complained about too-high tax bills. The county worked to reduce the tax burden by freezing values in 2017, a move they’re still fighting for in court. Residents also passed a number of referenda last year that are designed to limit some tax increases.

The case was dismissed by Fulton County Superior Court, but Kendall appealed and the lawsuit was kept alive by the state appeals court last month. The suit, now back before Fulton County Superior Court, argues that the Fulton County Board of Assessors erred when it decided the stadium was tax exempt, according to the WFTV report.

Mercedes-Benz-Stadium was funded through a combination of loans to the Falcons, money from the NFL, sales of permanent seat licenses and $200 million in bonds backed by Atlanta hotel-motel taxes. But it’s owned by the Georgia World Congress Center Authority, a state agency that also owns the largest convention center in Georgia.

The Falcons have an agreement with the authority to operate the stadium for 30 years. Kendall, in the suit, said that’s the issue: When the Falcons played at the Georgia Dome, the Dome was exempt from paying property taxes because it was owned by the state.

At the Dome, the Falcons had an agreement to use the facility for 20 days each year. The rest of the time, the GWCCA managed the building and received all the revenue from concessions, merchandise and private suite sales. The Falcons only got revenue from ticket sales at their home games, the suit said.

But at Mercedes-Benz, the agreement is different: The Falcons manage the stadium year-round, and receive the revenue from all events held in the building, not only ticket revenue. Kendall argues that under the new agreement, the Falcons are a long-term leaseholder, and long-term leases are taxable under state law.

Victor Matheson, a sports economist at College of the Holy Cross, said while there are some stadiums that pay property taxes, the vast majority do not.

There are questions about whether that’s right, he said — after all, “there’s no fundamental reason why a football stadium shouldn’t pay property taxes.” But he said the case is a long shot. If it succeeds, he said, it could have ripples for stadiums across the country, as many agreements are set up in a similar fashion.

“I wish them luck, but it’s probably unlikely,” he said. “If this domino were to fall … that would be a real game changer nationwide.”

Still, he said, team owners are likely to seek other subsidies from local governments if a property tax exemption disappears.

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