Court: New Falcons stadium can proceed

Court: New Falcons stadium can proceed

ATLANTA, GA (WALB) - Plans to build a new stadium for the Atlanta Falcons football team may proceed, under an opinion today by the Georgia Supreme Court.

In the case of Cottrell et al. V. Atlanta Development Authority et al. (S14A1874) a group of Atlanta residents had challenged the financing of the proposed new $1.2 billion stadium as unconstitutional. But in today's unanimous opinion, written by Justice Harold Melton, the high court has rejected all their arguments and found that the financing as structured does not violate the Georgia Constitution.

In April 2014, a Fulton County Superior Court judge conducted a bond validation hearing to determine the validity of revenue bonds to be issued by the Atlanta Development Authority, also called Invest Atlanta. The bonds, which would be repaid by hotel-motel taxes, would provide $200 million in proceeds to go toward building a new retractable-roof stadium to replace the 22-year-old Georgia Dome. The City of Atlanta claimed that the new stadium, to be built next to the Georgia Dome by 2017, would bring in $155 million in annual revenue, create more than 1,400 jobs, promote tourism and quell threats that Falcons owner Arthur Blank, Home Depot, Inc. co-founder, planned to take the team to another city.

But a small group of Atlanta residents, led by Rev. William Cottrell, former pastor of Atlanta's first black Baptist church, said that two historically black neighborhoods – Vine City and English Avenue – would be hurt by the new development. In February 2014, after the Atlanta Development Authority and Georgia World Congress Center Authority sought validation of the bonds in court, Fulton Superior Court Judge Ural Glanville approved the residents' request to intervene in the bond process.

At issue in this case are a number of complex transactions involving the development authority, the City of Atlanta, the World Congress Center Authority and others. Among them: The bonds would be issued by the Atlanta Development Authority and repaid through the hotel-motel tax. Proceeds from the sale of the bonds would be transferred by the Atlanta Development Authority to the World Congress Center Authority, which would own the new stadium.

Following a hearing, in May 2014, the judge entered a final order, confirming and validating the Series 2014 Bonds and rejecting all objections by the residents. Today's Georgia Supreme Court opinion affirms the lower court's ruling.

As background, the new stadium is to be funded in part by the hotel-motel tax levied under Georgia Code § 48-13-5 (a). Generally hotel-motel taxes only can be levied at a rate of 3 percent or less under the law. However, the law provides an exception by allowing municipalities to levy a 7 percent hotel-motel tax as long as a designated portion of the collected tax proceeds is used to fund a “multipurpose domed stadium facility.” Prior to 2010, the taxes imposed under the statute were required to have a stated expiration date “not later than December 31, 2020.” In 2010, the General Assembly amended the law by adding a new subsection that extended the expiration date to Dec. 31, 2050, as long as the same portion of the proceeds that had been used to fund the original domed facility was expended to fund a “successor facility” during the extended period.

In their appeal to the Georgia Supreme Court, Cottrell and the other residents contended that the trial court made a number of mistakes. Among them, they argued that the amended state law authorizing extension of the existing Atlanta hotel-motel tax specifically to build a new stadium is unconstitutional because it has turned a “general law” that applies statewide into a “special law” that only applies to one situation.

“We disagree,” today's opinion says.

Under the Constitution's Uniformity Clause: “Laws of a general nature shall have uniform operation throughout this state and no local or special law shall be enacted in any case for which provision has been made by an existing general law.”

“In this regard, a statute would run afoul of the Constitution if it were ‘a general law which lack[ed] uniform operation throughout the state or a special law for which provision had been made by existing general law,'” the opinion says. However, “Uniformity does not mean universality,” the opinion says. “A law which operates uniformly upon all persons of a designated class is a general law within the meaning of the Constitution, provided that the classification thus made is not arbitrary or unreasonable.” Here, the 2010 amendment provides a proper exception to the general law of § 48-13-5 (a) because the statute “applies uniformly on all taxing authorities which come within the scope of its provisions, and because the classification made by the statute is not arbitrary or unreasonable.”

“It is of no consequence that subsection (B) happens to only impact the New Stadium Project at this time, as the other counties and municipalities covered under subsection (A) that could have collected a 7 percent hotel-motel tax for purposes of funding their own multipurpose domed stadium facilities at the time that subsection (A) was passed had every opportunity to do so,” the opinion says. “We reject the idea that the Legislature is now forbidden from enacting legislation that affects the class of taxing entities covered under subsection (A) simply because only one taxing entity chose to take advantage of implementing a 7 percent hotel-motel tax for purposes of funding a multipurpose domed stadium facility over 20 years ago.”

Furthermore, “there is nothing arbitrary or unreasonable about allowing the same taxing entities that already have experience paying for a multipurpose domed stadium facility through the collection of a 7 percent hotel-motel tax…to collect such a tax in the future to fund a different stadium after the first tax has expired.”

“Accordingly, we find that [the amended statute] is constitutional.”

Attorneys for Appellants (Cottrell): Thelma Wyatt Moore, John Woodham

Attorneys for Appellees (Development Authority): Douglass Selby, Matthew Calvert, Ashley Cummings, Samuel Olens, Attorney General, Denise Whiting-Pack, Thomas Curvin, Matthew Nichols