How Not to Save Money

Apparently, Gwinnett County is in a bit of a pinch to build the stadium quickly.

The county is under soft April 1 deadline to begin construction, according to its agreement with the Braves, who will as part of the deal relocate their top minor league affiliate from Richmond to play in the park. The agreement requires the county to make “reasonable best efforts” to commence construction by that date.

The agreement doesn’t give the same flexibility on completion. The stadium is supposed to be done by March 1, 2009.

While the Braves agreed to seek a road trip to start the season, possibly giving the county a little more time to finish up work at the ballpark, the agreement warns that the Braves “will suffer substantial damages in the event the stadium is not completed on time.”

While a private developer would have to wait for [Development of Regional Impact program] review completion before doing any development or construction work on a project, [Atlanta Regional Commission] has never had a case quite like this one, Reuter said.

“I’m not sure that we’ve ever had a case where a local government’s on a clock like that,” he said. “I would think we would try to do whatever we could to not hamstring them. I would think we would try to work with them to make it happen.”

Milk costs more at a convenience store than a grocery store because customers are willing to pay for convenience. Call it the 7-11 principle. In the same way, if you want a construction project finished quickly, it is going to be more expensive than with a more flexible timetable. You have less time to seek competitive bids, wait for convenient delivery of equipment and materials, or solve unforeseen problems. The original $45 million cost estimate was low to begin with. Given the time constraints, I expect overruns to be higher than usual. I will not be surprised if the project exceeds $60 million.

The articles also reveals some other interesting information about the surrounding retail space.

Gwinnett Center General Manager Preston Williams, who is managing the construction effort, said his office and Lawrenceville developer Brand Morgan, who sold the land to the county and intends to build a retail complex around the stadium, are working on the DRI application. But he couldn’t say when it would be complete.

The developer who sold the land was in on the deal and he held onto surrounding land that has certainly increased in value. Well, at least they didn’t buy it and give it to the Braves.

6 Responses “How Not to Save Money”

  1. Jason S. says:

    As someone who lives in Gwinnett County I was originally excited by the news of the AAA Braves coming here, but now that I see what it’s going to cost and what the county has foolishly agreed to to placate the Braves, I’m now hoping the whole thing falls through. This whole deal is like a middle class residential neighborhood paying to build a gigantic house for a millionaire to move into and agreeing to pay all of his costs (utilities and such) if he’ll only agree to move there in the hopes that property values for the whole neighborhood will go up if they let a millionaire live there for free.

  2. Jay P says:

    I understand the concerns about secrecy and disclosure – I recognize the fact that if Gwinnett had conducted it’s business with the Braves out in the open, the Braves probably wouldn’t be coming here, because we’d have gotten involved in a bidding war.

    I agree with the principle of the lower and middle classes continually being shafted. In a state thats proud of it’s 48th place ranking in schools, that $45-60 million going into our schools or perhaps for more police officers would seem to a better investment.

    Long term though, the added tax revenue from that area (you know it’s going to get built up quite a bit now) should allow the county to recoup this investment. True, traffic’s gonna have to be addressed, and I’d guess the state will take a brunt of that load. But it will add to commute times for anyone going thru that area.

    I’ve gotta admit I submitted my deposit for season tickets within 5 hours of the initial announcement. If you wanted minor league baseball in Gwinnett, you couldn’t do better than the AAA Braves, and the location is great for me personally. You take those last two sentences out of my story, and I’d probably be a bit opposed to the whole deal.

    Now if I can come up with a way to sneak bottled water in the park when I go. ๐Ÿ™‚

  3. JC says:

    Long term though, the added tax revenue from that area (you know itโ€™s going to get built up quite a bit now) should allow the county to recoup this investment.

    The evidence from all of the empirical studies by economists—not consulting firms hired by governments—that I have seen don’t back this up. This isn’t controversial among economists. Gwinnett doesn’t think this is the case either, because they are raising taxes to pay for it. If tax revenue would be sufficient to pay for the stadium, the tax wouldn’t be necessary. It’s too bad that the tax they chose won’t be effective, and even if it did bring in $500K a year, it still won’t be enough to cover the debt.

    I might be willing to support raising taxes to support a team, but I would rather not be lied to by politicians. It’s insulting.

    The deal is done and the team is coming. As fan, I hope the team succeeds and all of the commissioners are voted out of office.

  4. Don Shaw says:

    I am one of the two residents that were in attendance at the BOC meeting that voted on the land purchase. I am the one quoted as “I do not think this is a good business deal.”

    The BOC thinks this will genrate 15 million in economic revenue to the area, this is not enough to cover the debt service as JC writes about.

    This is about big egos. Next we will be widening the doors at GJAc so they can get their heads through.

  5. JC says:

    Thanks for chiming in, Don. It’s good to see the citizens of Gwinnett fight back.

  6. Don Shaw says:

    JC, I contacted Mr. Connell’s office and requested all documents about this. three days later I heard back, they are waiting for me to go get them now.

    Stay tuned, the document was so large my server could not handle it. I offerd to go to GJAC and pick it up.

    I really can n ot wait to read it.