Gwinnett Braves Gwinnett County Commissioner Thesis

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It is apparent today that these projections, both for the revenue streams and for the stadium costs, were optimistic. The County had used these optimistic figures as the basis for their argument to build the stadium. Moreover, County economist Alfie Meek outlined other benefits to the County. He calculated $15 million annually in new economic activity and 200 new jobs that would pay $6.5million in new personal income (Gwinnett County, 2008). These figures were based partly on impacts seen from the Gwinnett Arena, home of a minor league hockey team.

Despite the cost overruns and high likelihood of future revenue shortages, bringing the team to Gwinnett is likely to have a positive impact. The County was eager to build a stadium, but they made their decision based on relatively optimistic numbers. The high end estimate for attendance revenue, for example, was $468,000; the county used $400,000, very close to that high end estimate. The county increased the cost of the stadium under the assumption that a AAA team would draw a larger attendance than an independent team. However, they approved substantial improvements to the stadium after construction had begun, which resulted in the $19 million supplemental funding. The County is unlikely to recoup its investment in the stadium as a result of these year-over-year shortfalls and the additional $19 million outlay. Tax revenues on the $15 million of increased economic activity are unlikely to cover the shortfall. However, the project's contribution to the overall growth of the Gwinnett economy, especially during this period of economic difficulty, will be a positive for the community. The baseball team will be a draw for businesses and residents, and the contribution to the GDP of the area will offset the direct cost to the county.

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The citizens of Gwinnett County are, in effect, subsidizing the project in order to facilitate economic growth and an increase in social prestige for the region.

For their part, the Atlanta Braves benefit substantially from the deal. They contributed nothing to the cost of building the stadium, but will received strong revenue streams from its operation. The Richmond, VA, stadium was old and did not provide the type of strong revenue streams required to profitably run a minor league baseball franchise. The Braves were essentially breaking even there. In addition to the financial benefits, there are baseball benefits as well, since the Braves will have easy access to players from their top farm club so close to home. The reason that the Braves did not contribute to the cost of the stadium is because the Braves had strong negotiating power relative to Gwinnett County. The County had already decided to pursue a stadium and saw the involvement of the Braves as adding significant value to the project. For their part, the Braves could have received similar benefit by relocating their minor league club to any number of different cities. The County needed the Braves more than the Braves needed the County. The Braves used this same formula for the relocation of two of their other minor league clubs. It is unlikely, therefore, that the Braves were willing to share any of the stadium costs despite the fact that they are going to benefit both financially and operationally from the relocation to Gwinnett.

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