City, Hawks Reach Deal To Keep NBA Team in Atlanta: Mayor

ATLANTA, GA — Mayor Kasim Reed and the Atlanta Hawks announced Tuesday that they've reached an agreement on the $192.5 million renovation of Philips Arena that will keep the NBA team in the city for the next three decades

The deal must be approved by the City Council and the Atlanta-Fulton County Recreation Authority, according to a statement from the mayor's office. The 30-year agreement "will maintain the downtown facility as a world-class, state-of-the-art venue for sports and entertainment events," the statement added.

"No property taxes or new taxes of any kind" would be levied on Atlanta residents or businesses to fund renovations of the arena, which opened in 1999, the mayor's office said. Along with the Hawks, Philips Arena hosts about 170 events each year, including musical acts and ice shows.

The proposed deal has a break-up clause requiring the Hawks to pay up to $200 million if the NBA team leaves Atlanta prior to 2046.

The renovation of Philips Arena would begin next summer, with completion by the start of the NBA's 2018-'19 season. It's part of a local trend; as the website Curbed Atlanta points out, the region's other two pro sports teams are moving next year into new homes.

The NFL's Falcons are moving from the Georgia Dome into the $1.5 billion Mercedes-Benz Stadium, next door to Philips Arena. And Major League Baseball's Braves are moving from Turner Field to SunTrust Park in Cobb County.

At Philips Arena, the city's contribution to the renovation is capped at $142.5 million, the mayor's office said. Of that amount, $110 million will come from bonds backed by a recently expanded car rental tax collected at Hartsfield-Jackson Atlanta International Airport and other city facilities.

Another $12.5 million will come from the city’s $30 million sale of Turner Field to Georgia State University, and $20 million from the liquidation of other city assets. "No money from the City’s general fund will be used on this project," the mayor's office said.

In other parts of the deal:

• The Hawks will contribute $50 million to the renovations. The team and the arena operator will extend the lease for the arena, with the arena operator paying annual rent of $5.9 million to the city.
• The Hawks would develop an "Equal Business Opportunity Plan" that will ensure at least 31 percent participation in the renovation by women and minority business enterprises.
• The ongoing capital repairs and maintenance costs of Philips Arena would be covered by a facility charge on tickets.