AJC – Last suburban stadium didn’t live up to promises
Posted: 12:00 a.m. Saturday, Jan. 25, 2014
By Dan Klepal and David Wickert – The Atlanta Journal-Constitution – Original Article
Supporters of a new Atlanta Braves stadium in Cobb County say it will be an economic home run, the centerpiece of a massive mixed-use entertainment district that will attract some of the best fans in baseball.
Gwinnett County residents can be forgiven if they think they’ve heard it all before.
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January 21, 2014 Lawrenceville – Picture shows Coolray Field (right) and surrounding area along Buford Drive in Lawrenceville
When the team moved its AAA affiliate to Lawrenceville in 2009, Gwinnett officials made similar promises. None of them have come true.
As Cobb taxpayers prepare to pay $300 million for their share of the new major league stadium set to open in 2017, The Atlanta Journal-Constitution examined what happened the last time the Braves moved a team to the Atlanta suburbs.
Nearly five years after it opened, Coolray Field still isn’t generating enough revenue to pay for itself, as county officials said it would. Plans for development at the stadium have become ensnared in litigation and, for the most part, haven’t materialized. And attendance at Gwinnett Braves games is among the worst in the International League.
Mike Plant, the Braves’ executive vice president of baseball operations, said attendance at the Gwinnett team’s games has lived up to the Braves’ expectations. A developer blames the recession for the lack of commercial development at Coolray Field. And Gwinnett officials say they’re trying to ensure the stadium doesn’t become a greater burden on taxpayers.
J.C. Bradbury, a Kennesaw State University economist who has studied the economic impact of stadiums, said there are important differences between the Cobb and Gwinnett stadiums that suggest the new major league stadium has a better shot at success. He said Cobb officials seem to have avoided some of the pitfalls that hindered Gwinnett.
“It’s almost looks as if they learned from what Gwinnett did wrong,” Bradbury said.
ONLY ON PAPER
When Gwinnett officials announced they had lured the Braves’ AAA team from Richmond, Va., in 2008, they called it an economic development initiative that would spark development along Buford Drive. Then-County Administrator Jock Connell famously said the $64 million stadium would pay for itself from day one. A consultant’s study predicted Gwinnett would be “one of the strongest markets in the country to support a minor league baseball team.”
One of those promises appeared to come true when, in 2008, developer Brand Morgan announced plans for 351,000 square feet of retail space, 617,000 square feet of offices, 610 residential units and 300 hotel rooms adjacent to the stadium on Buford Drive.
But six years later, most of the development exists only on paper.
Morgan has built 658 upscale apartments near the stadium and will soon break ground on another 206 units beyond the outfield fence. But the restaurants, offices, shops and hotel rooms have not materialized, and Morgan has provided no specific timeline for them.
Morgan and the Braves blame the Great Recession and its aftermath for the lack of commercial development. Another impediment: Morgan doesn’t own 19 of the 73 acres he planned to develop, and that other property is now the subject of litigation.
Tired of waiting for Morgan to buy his 19 acres, owner Garland Roberts tried selling it to another developer two years ago. The developer wanted to build more apartments than Morgan’s plans called for, plus a car wash, fast-food restaurant, auto parts store and other shops.
Nearby residents objected, saying the new plan veered dramatically from the original upscale “live/work/play” development. Unwilling to give up on Morgan’s vision, commissioners rejected a request to rezone Roberts’ property to accommodate the revised plan.
County Commission Chairwoman Charlotte Nash said some changes to the original development may be needed. But she said commissioners want something consistent with the original vision.
Roberts has since sued Gwinnett and Morgan. Among other things, he claims the commission’s decision constituted an illegal taking of his property without compensation.
Douglas Dillard, Roberts’ attorney, said Morgan’s plans for his client’s property are unrealistic.
“We’re zoned for a parking garage and a hotel and a little bit of retail,” Dillard said. “There ain’t no market for that kind of stuff out there.”
The Braves’ Plant said he’s optimistic the development will occur.
“This was a long-term vision for us when we moved the team up there,” he said. “Fortunately for us, working with Brand Morgan, we’ll start seeing residential and retail cropping up.”
MILLIONS IN DEBT
Coolray Field has disappointed in other ways.
The cost of the stadium rose from $45 million to $64 million. Gwinnett borrowed $33 million to help pay for it. But rent from the Braves and revenue from ticket sales, parking and naming rights weren’t nearly enough to repay the debt. The biggest single source of revenue Gwinnett uses to pay the debt is a 3 percent car rental tax.
But even that’s not enough now that the county has begun making principal payments on the debt. Beginning next year, Gwinnett plans to divert about $440,000 annually in hotel-motel taxes from its tourism fund to cover the stadium debt. That’s money the county won’t be able to use to promote local tourism.
Nash said the county is trying to use “revenues that are less likely to come out of the pocket of Gwinnett County residents.”
Bradbury, the Kennesaw State University economist, said Gwinnett relied on unrealistic revenue projections for Coolray Field. One example: County officials expected to get $500,000 annually for naming rights for the stadium.
“There’s no way they were going to get anywhere near that,” Bradbury said.
Instead, they got $225,000.
Then there’s attendance. Though a consultant estimated the Gwinnett team would draw 6,000 to 6,500 fans per game, it has never averaged 6,000 fans since it debuted in 2009.
Its attendance has been near the bottom of the International League since it debuted in 2009. Last year its average attendance of 4,762 fans per game ranked 13th out of 14 teams. The lackluster turnout has contributed to lower-than-expected revenue for the county.
But executive vice president Plant said Gwinnett attendance is in line with projections the Braves made before the team moved its AAA affiliate to the county from Richmond. He said other minor league teams have an advantage because there aren’t as many entertainment options in cities such as Buffalo, N.Y., Louisville, Ky., and Durham, N.C.
“The numbers are better than we thought they’d be,” Plant said. “The motivation for moving the team was different for us. We’ll move 300 players up and down the system, and there’s a ton of logistics to that. The fact that they’re right up the road is important to us.”
Plant doesn’t think the new major league stadium in Cobb will hurt attendance in Gwinnett because they appeal to different audiences. The minor league team caters more to Gwinnett families, he said.
LESSONS LEARNED
Cobb and Braves officials have made similar promises about the new major league stadium. They say it will be a big draw for a fan base that’s already centered in the northern part of metro Atlanta. They say it will be the centerpiece of a major commercial development. And though Cobb officials haven’t said it will pay for itself — they’re relying on a mix of property taxes and other public funds to pay their share — they say it will be a good deal for taxpayers.
Bradbury said there is reason to doubt the Cobb stadium will be the economic success county officials claim. He said studies have consistently shown new stadiums rarely have much economic impact.
But he said the Cobb stadium will have a bigger impact than Gwinnett’s Coolray Field. He said the Cobb stadium likely will draw more fans from outside the county than Coolray lures to Gwinnett. Those fans will spend money in Cobb that they wouldn’t have without the stadium, he said.
Bradbury also thinks the Cobb stadium is more likely than Coolray Field to spark nearby development. A key factor: the Braves will own the property around the stadium and will have a vested interest in developing it.
“This is not the typical ‘build it and they will come’ stadium idea,” he said.
What’s more, Bradbury said Cobb officials seem to have learned from some of Gwinnett’s mistakes.
One example: Gwinnett initially could only guess how much it would receive from some revenue streams — such as naming rights — used to repay the stadium debt. Cobb’s agreement with the Braves spells out the team’s contribution to the stadium debt.
“If the Braves go on strike and don’t play a game, the county gets that money,” Bradbury said.