Visitors to Cobb County in 2021 again contributed less than expected to pay off the public’s share of the Truist Park construction bonds, shifting more of the costs onto local taxpayers, county financial documents show.
Still, county finance officials characterized the update released on Tuesday as great news for county residents, because the pandemic-fueled dip in hotel taxes was more than offset by a rise in property taxes paid by businesses in the surrounding Cumberland area.
As a result, Cobb’s general fund — the main funding source for most county government services — contributed just $4.9 million towards the stadium debt service in 2021, 23% less than the $6.4 million a year that county officials planned when the project was approved.
“Every year since the beginning of this investment, we have been below that $6.4 million projection, including a pandemic,” said Bill Volckmann, the county’s chief financial officer. “So that says a lot about the sustainability of this investment.”
In total, the county contributes $16.4 million a year toward the debt service on the $300 million stadium bonds, using a mix of general tax revenue, a special property tax on Cumberland-area businesses, and taxes and fees predominantly paid by visitors for car rentals and hotel stays. The Atlanta Braves pay the county $6.1 million a year in rent, for a total debt payment of $22.5 million.
Visitors have contributed less than expected since the pandemic hit. In 2021, $866,000 in hotel motel taxes were spent on the stadium debt. That was up from $419,036 in 2020, but still well below the $1.5 million initially budgeted.
Meanwhile, a $3 hotel room fee charged in the Cumberland Special Service District generated $2.8 million last year. But county commissioners have opted to spend a growing share of that fee on other expenses, such as police overtime and tourism promotion. In 2021, just $1.8 million of that fee was spent on the stadium debt, far less than the $2.7 million the public was initially told would be used for the debt.
“This is misleading,” Commissioner Keli Gambrill, a West Cobb Republican, said at Tuesday’s presentation. “... This $2.8 million isn’t going toward this debt like it’s being portrayed.”
With visitor spending declining and being redirected to other services, Cobb has relied more heavily on commercial property taxes from the Cumberland Special Service District, which contributed $8.2 million to the stadium debt in 2021, up from the $5.2 million budgeted. That doesn’t mean residents are completely insulated from the tax burden: businesses often pass on some share of their taxes to customers.
Also on Tuesday, the Braves released a report on the fiscal impact to Cobb County, adding another voice to the debate over whether the stadium was worth the cost to taxpayers.
Most economists are skeptical of such subsidies, because fiscal impact studies touted by businesses fail to consider the opportunity cost of investing public dollars on other things.
The latest study, by sports economist and author Andrew Zimbalist, concluded that so far, the county has spent more on debt payments and public services for Truist Park and The Battery than the projects have generated in annual revenue. But Zimbalist estimated the long-term financial benefit to Cobb County government could be anywhere from $20 million to $126 million in net present value.
“I think this has been a win-win for both the organization and the county,” said Mike Plant, the president of the Braves development arm.
The Braves-commissioned study is the third in the last few years that has attempted to assess the fiscal impact to the county. Zimbalist’s report called a 2018 study commissioned by the Cobb Chamber “unrealistically optimistic,” and he said a March 2022 study by J.C. Bradbury, a Kennesaw State University professor, was “too pessimistic.”
Of the three, only Bradbury’s analysis was peer-reviewed and published in academic journals. He found that the stadium had a $14.6 million annual negative impact on the county coffers, costing the average Cobb household a net of $52 a year.
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