Mayor Kasim Reed announced today that the City of Atlanta and the Atlanta Hawks have reached an agreement on key terms for the $192.5 million renovation of Philips Arena, subject to approval by the Atlanta City Council and the Atlanta-Fulton County Recreation Authority (AFRCA).
According to a statement from the city, the public contribution for arena renovations is capped at $142.5 million, of which $110 million will come from a series of bonds backed by the recently expanded car rental tax collected at the CONRAC (Car Rental Facility) at Hartsfield-Jackson Atlanta International Airport and other facilities throughout the city.
An additional $12.5 million will come from the city’s proceeds of the $30 million sale of Turner Field to Georgia State University and Carter and approximately $20 million in proceeds from the liquidation of other underutilized city assets. No money from the city’s general fund will be used on this project.
The Atlanta Hawks will contribute $50 million to the renovations of the arena. The team and the arena operator will execute an extension of the lease and operating agreement for the facility. Under this extension, the arena operator will make lease payments of $5.9 million to the City throughout the term of the agreement.
To promote full and equal business opportunities in connection with the renovations of the arena, the Atlanta Hawks have agreed to develop an Equal Business Opportunity Plan that will ensure at least 31 percent participation by women and minority business enterprises.
The agreement includes a break-up clause that would require the Atlanta Hawks to pay up to $200 million should the team leave the city prior to 2046.
The ongoing capital repairs and maintenance costs of Philips Arena will be covered by a facility charge on tickets to be introduced by the administration for consideration by the appropriate levying entity. No property taxes or new taxes of any kind would be paid by or levied on residents or businesses to fund renovations of the arena.
The Hawks will start the renovations of Philips Arena during the summer of 2017, and the transformation will be completed by the start of 2018-2019 season and coinciding with the Hawks’ 50th Anniversary in Atlanta. The Hawks will play next season at Philips.
The new arena will include amenities on every level of the building, 360-degree connected concourses at all levels, improved sightlines and state-of-the-art video throughout the building.
Going forward, the city will continue to work with Atlanta Hawks’ ownership to transform the area known as the “Gulch” into a prime destination for sports fans and visitors, a project that will require an estimated $1.5 billion in investment.