Skeptical of the numbers behind the Classic Center’s request to issue a third round of bonds to fund its new arena, the Athens-Clarke County Commission put off a vote for a second time, despite fears that delaying approval could scuttle a fragile deal with the project’s master developer.
Classic Center Executive Director Paul Cramer and Atlanta-based Mallory & Evans Vice President Johnny Dixon both urged the commission to move forward at an Aug. 15 called meeting, citing volatile interest rates, among other factors. Mallory & Evans had previously backed out of a deal to build a parking deck and other developments around the arena on land leased from ACC, but is back in the fold for now.
“The contract that we worked so hard to bring the developer back on board, it would be null and void,” Cramer said. “We would have to start all over again.”
He added that the Classic Center is already booking events at the arena, which will be finished in about a year, and delaying the bond issue would send the wrong message to potential clients. A deal for a minor-league ice hockey team is also in place, he said.
Commissioner Dexter Fisher, who served on an advisory board for the project before being elected last year, noted that taxpayers overwhelmingly voted to commit $34 million to the arena as part of SPLOST 2020. “I think it would be a travesty to not move forward and get this arena done,” he said.
Commissioner Jesse Houle was also ready to move forward at last week’s meeting. “I’m one of the people who was skeptical of this project. I spoke against it being on the SPLOST list,” they said. “But now that it’s here, we’re deep in. It’s not a sunk cost fallacy. We are invested in this, so we’ve got to see it through.”
Other commissioners said they need more information about how the debt will be paid back. “I’m just trying to wrap my thinking around the sources that are going to pay for each bond,” Commissioner Mike Hamby said.
Like every construction project conceived prior to the COVID-19 pandemic, costs for materials and interest rates have risen astronomically, forcing Cramer to come back to the commission three times for bond issues. But no additional taxpayer money is involved—at each step, Cramer has identified private sources of revenue, like ticket fees, parking fees, naming rights and leasing land around the arena for development. The total cost is currently estimated at $151 million. The Classic Center Authority has agreed to back the bonds itself in the event the deal with Mallory & Evans falls through, using the value of the land around the arena, ACC Manager Blaine Williams said.
“This will probably be one of the greatest projects this community has ever seen, not because of the arena, but because of the development that will ensue around the arena and what it will provide the citizens of Athens,” Cramer said. “That whole entertainment district will come alive.”
For Commissioner Melissa Link, that’s part of the problem. She didn’t think residents had enough time to read and digest the agreement on the agenda last week.
“I don’t think the public understands all the massive, massive projects associated with the arena that are going to pay for the arena,” she said. “We’re going to see condos and a parking deck. It really is a transformative project.”
Questioned by Commissioner Tiffany Taylor about how the arena will benefit her constituents, not just tourists, Cramer pointed to the $3.5 million it will generate in property taxes earmarked for an east downtown/East Athens tax district and a $15.85 minimum wage for arena employees, as well as other community benefits that will be negotiated with the developer.
Houle, Fisher and commissioners Patrick Davenport and Carol Myers voted to move forward Aug. 15. Hamby, Link, Taylor and commissioners Ovita Thornton, John Culpepper and Allison Wright voted to delay. However, it appears almost certain that the bond issue will be approved in two weeks.
Commissioners are also considering raising the county’s stormwater fee. A January storm caused extensive flooding and damage to stormwater infrastructure, such as a massive sinkhole on Olympic Drive, and officials expect more severe storms and flooding as climate change worsens.
The fee—based on the amount of impervious surface like rooftops and parking that contribute to runoff—currently averages about $42 per year. County officials are recommending raising it by about $10 next year and about $2 per year afterwards. The hike would generate about $1.1 million to tackle a backlog of projects, keep up with maintenance and provide a higher level of services to property owners. For example, ACC could repair culverts underneath driveways on private property, which the government currently doesn’t do. There may be some type of waiver for low-income homeowners, according to Houle.
Originally scheduled for a vote at the Sept. 6 meeting, commissioners are likely to hold off until October. “I don’t think there’s been enough time for my colleagues and myself to absorb this and the effect it has on different people in the community,” Myers said.
Sometimes derided as a “rain tax,” the stormwater fee is widely misunderstood, as Commissioner Tiffany Taylor pointed out. Twenty years ago the federal government mandated that municipalities do a better job of preventing stormwater runoff from carrying pollution into streams and rivers. Rather than funding the program through property taxes, the commission at the time opted for a fee so that tax-exempt landowners like schools, churches and the University of Georgia would also have to pay. While Athens was one of the first communities in Georgia to create a stormwater management program, its fees are now among the lowest in the state.
“My folks have no understanding of why they’re being charged stormwater fees,” Princeton Mill resident Michael McClendon told commissioners earlier in the meeting. Link pushed back against the notion that many property owners who pay the fee don’t see any benefit. “Even if you live in a hobbit hut in the middle of nowhere, you probably use a public road to get there,” she said.
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