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Mon December 10, 2012
Term Sheet Continues Process For New Stadium
The tedious process of tearing down the Georgia Dome and building a new stadium for the Atlanta Falcons got a little bit faster today.
That’s because the Georgia World Congress Center Authority’s board approved the term sheet needed to finalize a deal.
For the Falcons and Congress Center, getting to a term sheet is like a football team crossing the 50 yard line.
“This is really the first step in a lot of steps in order to get a final agreement amongst the parties, but an important step,” said Georgia World Congress Center Authority Executive Director Frank Poe.
For the last 2 years, Poe has been negotiating with Falcons President and CEO Rich McKay.
“There’s plenty to be talked about,” said McKay. “But, I think at the core of it, the deal itself is what we’ll make sure people understand.”
Under the term sheet, a retractable roof stadium will be built on land owned by the Georgia World Congress Center Authority. That means either just north or just south the Georgia Dome. The Congress Center and the Falcons hope to settle on a site by mid-January with a new stadium built in time for the 2017 NFL season.
If a deal is finalized, the Falcons will sign a 30-year lease for the new stadium. During that time, the Falcons wouldn’t be able to move the team from Atlanta. Once the lease is up, the Falcons could renew the lease three times; each time for 5 years.
The final deal will include a final construction cost. The current estimate is about $1 billion. The state legislature would have to increase the Congress Center’s debt ceiling from $200 million to $300 million.
“It’s critical to the structure of this deal. No doubt about it,” said Poe. “You can’t advance under this term business relationship absent an increase in our capability for bonding.”
If legislature raises the available debt amount, the Congress Center and the Falcons would seek about $1 billion in construction bonds. The Falcons would be responsible for paying back two-thirds of the cost. The remaining third would come from revenue collected from the hotel/motel tax in Atlanta and unincorporated Fulton County.
Right now, the Falcons pay rent to the Congress Center to play home games in the Georgia Dome. The Congress Center would own a new stadium too. But, McKay says the new term sheet gives the Falcons much more power.
“In a new facility, we will run that operation,” said McKay. “One of the things that teams want to do is they do want to control that entire experience.”
The Falcons would pay all of the new stadium’s operating costs and retain all of the revenue. However, the team would pay the Congress Center $2.5 million a year in licensing fees.
With a term sheet in place, both sides will work towards what’s known as a memorandum of understanding. “(It) takes the business terms and puts a lot more detail on those terms as a more defining agreement of the relationship between the parties,” said Poe.
Unresolved issues include whether the new stadium will be built just north or south of the Georgia Dome and how much it would cost to buy land needed for a plaza and other stadium-related items.