Anything more than that over the 30-year life of the contract falls to the Braves to pay for, said county chairman Tim Lee.
Much has been made of how Turner Field, which is only 16 years old, is in need of at least $150 million in capital maintenance improvements.
Critics of the Cobb deal have worried that Cobb could be saddled with similar costs halfway through the 30-year contract with the Braves.
But Mike Plant, executive vice president of business operations for the Braves, said comparing Turner Field’s needs to that of the proposed Cobb stadium is comparing apples and oranges. Turner Field was built for the Olympics, a 16-day event. By being able to build their own stadium from the ground up, they will be able to design it in such a way that will not require the kind of capital maintenance expenses needed of Turner Field, he said.
Still, rather than take his word for it, Plant said it was appropriate to cap the county’s expenses in a legally binding contract.
“Tim and (Commissioner) Bob (Ott) and I had a conversation saying, OK, here’s what the Braves will propose, we’ll propose that we’re both in for 50 percent up to $70 million, and if it goes over that 100 percent of the overage is the Braves, so there’s nothing now in this deal that doesn’t have a cap on it, and the biggest one obviously being I’ve seen a number of articles written about how these projects and budgets always go over, and the county is just looking at more and more exposure, and they’re going to get screwed, and I think you know from looking at the (memorandum of understanding) that we’re responsible for all the cost overruns.”
Plant describes capital maintenance costs by using the example of taking a building and turning it upside down. The items that would fall out of the building represent general maintenance, which falls to the Braves, while the items that do not fall out, such as pipes, elevators and concrete, fall under capital maintenance. Capital maintenance costs will be split between the Braves and Cobb.
How the county plans to pay the $35 million
The $35 million in capital maintenance which the county is obligated to pay is over and above the $672 million cost of the stadium, of which the county has agreed to pay for $300 million.
Lee said he intends to pay for the $35 million from revenues collected from a new tax district the Board of Commissioners will create in the coming weeks with boundaries roughly following the lines of the 5.5-square-mile Cumberland Community Improvement District. The governing board of that CID, chaired by Tad Leithead, has already signed a resolution endorsing the new tax district’s creation.
Since the new tax district will be formed and begin to collect money before the first payments on the bonds issued to finance the stadium are due, Lee anticipates having a minimum of $10 million set aside by the time the first capital maintenance improvements need to be made.
“It probably won’t begin to be a need until you’re five or six years into it,” Lee said. “It’s to repair stuff like you would repair in your home long term. Like on your home you would replace shingles and water heaters. This is to replace stuff like that on the stadium, which, the first five to seven years, you probably aren’t going to need.”
As for routine maintenance, that is up to the Braves to pay for, Plant said.
“We spend $1 million a year out of our budget just on repairs and just general maintenance,” Plant said. “It’s an unknown number to most people, and I understand the emotion that sometimes goes into deals like this because of how big they are, but I think I’m confident more and more that the citizens of Cobb will see that this impact and the positive impact is going to far surpass what they believe the risk is to them.”
Plant said around the new stadium’s fifth or sixth birthday, his organization will begin to look for enhancements, which he calls “the new roller coaster.”
“What I mean by that is, it’s an expression I’ve used at the Braves is every year or two, once you start looking at a new facility, you need to start looking at what’s the new enhancement, what’s the new fan experience, and that’s not coming out of CMF (capital maintenance fund), that’s coming out of our pocket, so it’s another bucket of dollars that we will be putting in,” Plant said.
But what if they leave?
Critics have worried about the Braves leaving before the 30-year bonds for the stadium are paid off, but Lee and Plant say the terms of the contract they will be signing are legally binding.
“Essentially, the only way the Braves could ever leave is if the county and the (Cobb-Marietta Coliseum and Exhibit Hall Authority) that owns the building were in complete breach of their obligations, and there’s a whole bunch of default breaches and notices and cures in the long form agreement, so it’s kind of a nuclear clause,” Plant said. “There’s nothing that we can do to walk away from that. So it’s all on the county that as long as they do what say they’re going to do, we’re there.”
The contract, which will be one of several the county and Braves sign over the coming months in the wake of the memorandum of understanding approval, is standard for the industry, Plant said.
“It’s also something that’s approved by Major League Baseball because they understand that they’re not going to have their clubs set up to where they can five, 10 years down the road decide to pick up and go somewhere else. It’s a pretty standard form that’s used,” he said.
Consider that it’s not just the $280 million upfront payment the Braves are making on the $672 million stadium, either, Plant said.
“I mean, we didn’t win the lottery,” he said. “There’s an opportunity cost for us to go above that of about $100 million. That’s on our balance sheet. That’s not even part of the deal. There’s another $40 to $50 million that we’re putting in of what we call F, F and E — furniture, fixtures and equipment — in order to open the stadium. That’s all on our side of the ledger as well. Then you add the annual maintenance, that’s about $1 million a year, and then you add over the life of the 30 years, as I said, Turner Field, we put $125 million in there, and so I don’t know what that number will be, but we’ll keep investing in that facility to make sure that we have a new fan experience and enhancements and then there’s the development, so our number is pretty significant in this deal. As I said, I’m very comfortable and confident that the citizens of Cobb County are going to see this incredible impact and it will pay dividends tenfold.”
Moving forward The Braves have been working with Dallas-based HKS for architectural services, Cary, N.C.-based Kimley-Horn & Associates on engineering and transportation, and Chicago-based Jones Lang LaSalle for its development needs.
“We have those guys on board now,” Plant said. “The way we set this up was until we got final approval then they’ve been working for us as part of our team and we’re far down the road.”
This coming week Plant intends to issue a 60-plus page “request for qualifications” to some 50 national, regional and local firms for the proposed $400 million mixed-use development the Braves intend to build beside the stadium.
Of the 60-acre property the Braves are purchasing from Bethesda, Md.-based B.F. Saul Co., 15 will be deeded to the Cobb-Marietta Coliseum and Exhibit Hall Authority for the stadium site. The Braves intend to build a $400 million mixed-use development on the remaining 45 acres, set to open with the stadium in spring 2017, envisioned as a 365-day a year family-friendly entertainment district of shops, restaurants and possibly hotels.
“We want them to present us with what they think their ideas are,” Plant said of the 50 firms that will receive the request for qualifications. “What they would do with that space. How they would possibly play in that space with us.”
Then the Braves will decide whether to be their own master developer or to partner with an outside firm.
Plant hopes groundbreaking will occur this coming summer.
“We’re just thrilled with this decision and with the opportunity to be part of the community up there,” Plant told the MDJ on Wednesday, the day after the historic vote, in which the Board of Commissioners approved the MOU in a 4-1 vote with Lisa Cupid opposed.
“I’m just really confident that again we’re going to have a historic impact for a long, long time in a very positive way for the entire area and the region, and we’re an organization that’s going to deliver more than what we said we’re going to, and I just ask people to give us a little time, they’re going to start seeing that, I told Lisa Cupid that same thing last night afterwards, I said ‘look, we’re going to do some things that are going to make everyone here pretty proud.’”