Last year, a new developer, Vernon Krause, began openly talking about bringing the NHL back to Atlanta for the third time. In his vision, there would be a new 20,000-seat arena and a $2 billion “mixed-use development featuring hotels, retail, residential components”. The name of this area would be called the “Gathering at South Forsyth”.
After constructing the arena, the following would occur:
- 1 million square feet of office space
- 2,400 residential units
- 500 hotel rooms
- 600,000 sq. ft. of retail
- 90,000 sq. ft. community center/ice rink and
- 15,000 sq. ft. fire station.
— SporticoThe new developer, Krause Sports and Entertainment, talked to the Forsyth County Commission and had public engagement listening sessions. When Krause first approached the county and state, he asked for $500 million taxpayer dollars. Eventually, it came down to $390 million. Either way, one commissioner called this project an “economic driver like no other…(that) will create a halo effect that will raise the County’s visibility”. Another claimed that this project could “redefine the landscape of entertainment and sports in the region…(and be a) cultural and economic epicenter”. That is a significant amount of confidence for a sports arena deal, and not something you hear very regularly.
What stuns me with this confidence is just how poorly Krause was when he first came to negotiate with the county. Several days before Krause would go public with his arena plans, a five-page document was given to county commissioners with arena talking points. This came from Krause. The document talked up the good points of the deal, such as an NHL team and high schools using the arena for graduations. But when it came to the actual questions that the public wants answers to? Absolutely nothing.
But to more pointed questions that might come from the public, which were labeled “worst case Q&A”, the developers offered county officials no answers…“What is this development going to cost the taxpayers of Forsyth County?” “Is this going to raise my property taxes?” “Is MARTA going to eventually come here?” To each of these and several other questions, the development team of The Gathering at South Forsyth left only blank space. Nearly a month later, Forsyth residents and commissioners are still seeking answers. — Atlanta Journal Constitution, 05/09/23
Anyway, Forsyth’s local leaders were on board with this plan. They even visited NHL headquarters recently. To show their commitment, the country voted to give $350 million to the arena and $40 million for a new parking deck. Nevertheless, they emphasized that approval for the project would depend on having an NHL team. All those other pesky details? For instance, where would this ice rink go that Krause has said he would build on his own dime? Nobody knows or apparently cares.
— Front Office Sports & InstagramFast-forward to yesterday, and the Forsyth County board of commissioners voted 4-1 to approve the $2 billion project with a binding agreement…with just a few changes made by the county.
- Change #1 involves changing what is mandatory in Phase 1 of the project. The original agreement stated that Phase 1 included “600 multifamily units (apartments), office, hotel and retail space, and an 18,500-seat arena”. The new agreement says that 500,000 square feet of office, hotel, and retail space must be “built and ready to occupy” before the county signs off on the construction of the first 600 apartments.
- Change #2 again moves around what is required. The original agreement says that Phase 2 includes 600 more housing units and “more hotel, retail, and office space”. The new agreement moves the arena to Phase 2. Before the county approves the next 600 units, at least 50% of the arena must be constructed by the developer.
- Change #3 involves the amount that the county would issue immediately. Previously, the county discussed issuing over $350 million for the project. But the current agreement shows the county issuing a “$225 million bond through its development authority”. Every year, the county will need to make a debt service payment that totals about $18 million.
— @NHLtoAtlantaBut the developer was not aware of these changes and is now not happy. In fact, local media is reporting he may walk away from the project.
“I was quite frankly shocked and extremely disappointed by the last-minute changes after intense negotiations over the past few months — let alone the past year and half since I purchased the property…My team and I will review the changes to see if we can work toward finalization or end our efforts” — Gathering developer Vernon Krause, Press Release, 03/27/24
Now, Krause is clearly angry because the county clearly does not want him to build the arena and just stop. Which is what happens quite often in today’s sports world. The Miami Heat promised a waterfront park with tons of public amenities and built nothing after the arena went up. The Minnesota United were going to change the area outside of their new stadium. They have yet to change or build a single thing after their stadium was built. Do I really need to remind people about what the Ilitch family promised Detroit residents? Almost a decade after the arena was built, and I don’t think a single part of the city is better off near the arena.
Several weeks ago, Krause told a local news station that local taxpayers would not “have to pay anything” because real estate taxes would “(pay) for 100%” of the project”. According to the Atlanta Business Journal, the county is funding the project through various sources, including property taxes, hotel taxes, annual rent payments, and a ticket tax. Therefore, most of the taxes that may be used for funding, will, in fact, come from the public. These taxes are major revenue sources for cities around the country. Taxpayers would pay nothing on this deal? And that real estate taxes would pay for it all? What happened to that?
