[Copyrighted Material Omitted]
This opinion is uncorrected and subject to revision by the court.
NAHMIAS, Justice. All the Justices concur.
Appellants Larry Savage, Richard Pellegrino, and Tucker Hobgood challenge the trial court's validation of revenue bonds that will be used to help finance a new stadium in Cobb County for the Atlanta Braves major league baseball team. The bonds for the stadium project are to be issued pursuant to an intergovernmental agreement between Cobb County and the Cobb-Marietta Coliseum and Exhibit Hall Authority, under which the Authority agrees to issue bonds to cover much of the cost of constructing the stadium and the County agrees to pay the Authority amounts sufficient to cover the bond payments not covered by the licensing fees paid by the Braves. In these consolidated appeals, we conclude that the intergovernmental contract is valid; that the issuance of the bonds will not violate the Georgia Constitution's debt limitation clause, gratuities clause, or lending clause or Georgia's revenue bond laws; and that the process used to validate the bonds was not deficient. We therefore affirm the trial court's judgment validating the stadium project bonds.
1. The Cobb-Marietta Coliseum and Exhibit Hall Authority was created in 1980 as " an instrumentality and a subordinate public corporation of the State of Georgia" for the purpose of " development and promotion in this state of the cultural growth, public welfare, education, and recreation of the people
of this state." Ga. L. 1980, p. 4093, § 2. Since its creation, the Authority has overseen the construction of the Cobb Galleria Centre, Galleria Specialty Mall, and Cobb Energy Performing Arts Centre, and it continues to oversee the management of those complexes. In 2013, representatives from the Authority, Cobb County, and the Atlanta National League Baseball Club, Inc. (the Club) began to discuss building a new 41,500-seat stadium for the Braves in Cobb County. Those discussions resulted in a Memorandum of Understanding, which was presented to and approved by the Authority on November 25, 2013. Based on that memorandum, the County, the Authority, and the Braves parties executed a number of documents on May 27, 2014, which form the basis of the stadium project. The five main agreements are as follows:
(a) The Development Agreement :
The Development Agreement provides that the Braves
parties will oversee the construction of the stadium project with approval and
oversight by the County. The Braves parties, who own the land on which the
stadium will be built, will convey to the Authority the " stadium site," which
will consist of the footprint of the stadium and any Authority parking areas.
The Authority will retain title to the stadium site, and the Authority will also
own " all real property constructed, installed and placed on the site,"
including the stadium, the public infrastructure, and " all items permanently
affixed thereto and therein." The Braves parties will retain ownership of "
certain specific Improvements, fixtures, furnishings, equipment, other ...
personal property to be placed in or upon the stadium and related property, and
other tangible property," including items such as seating, scoreboards, lockers,
and carpet. The Braves parties will also own and manage a " private stadium
parking area of not less than 6,000 spaces." In addition, the Braves parties
will own the land surrounding the stadium, where they intend to develop a
mixed-use retail, entertainment, residential, hospitality, and office district.
The total cost of the stadium project is anticipated to be $622 million, with a maximum cost of $672 million. Revenue bonds issued by the Authority will pay for $368 million (about 55 to 60%) of the project. The Cumberland Community Improvement District will contribute $10 million to the project, and the County will contribute $14 million for transportation improvements. The remaining cost will be paid by the Braves parties, with a contribution of at least $230 million and the option to increase that amount by $50 million as necessary. The Development Agreement specifies that none of the money coming from the government entities will be used for the " improvement or alteration of any privately-owned property." The project is scheduled to be completed by February 1, 2017.
(b) The Operating Agreement :
The Operating Agreement grants the Braves parties a license for exclusive use of the stadium site, the stadium, and the Authority's parking areas from May 27, 2014 until December 31, 2046, with an option to extend the license through December 31, 2051. During this period, the Braves parties may lease or license use of these areas to third parties, and the County may hold three events per year at the stadium, totaling up to ten days per year. At the end of their license, the Braves parties must surrender the stadium site to the Authority or County but have the right to remove property owned by them unless such removal would result in the stadium " not being susceptible to use in its normal
and customary manner as a multi-use sports facility."
During the period of the license, the Braves parties have a right to all revenues from the stadium, including from the Authority's parking areas and from advertising in the stadium and on any marquees built on the stadium site or on County land. The Braves parties also may sell the naming rights to the stadium and keep the resulting revenues. Beginning in 2017 and continuing as long as they retain the license, the Braves parties will pay the Authority a yearly license fee of $3 million, and during the 30-year term from the expected completion date in 2017 to the end of 2046, the Braves parties will pay an additional annual license fee of $3.1 million. When the Operating Agreement terminates, the Braves parties have the exclusive option to buy the stadium, stadium site, and/or Authority's parking areas for 50% of fair market value. The Operating Agreement states that the County and the Authority " believe that the development and construction of the Stadium will provide a significant and much needed catalyst for revitalization and continuing redevelopment of the property in the vicinity of the Stadium."
(c) The Bond Resolution :
The Bond Resolution, which was approved in nearly identical versions by the Authority and the County Commission, authorizes the Authority to issue revenue bonds for up to $397 million to finance the stadium project and cover the cost of issuing the bonds. The maximum principal and interest payment on the bonds shall not exceed $25 million per year, and the final maturity date of the bonds will be no later than 30 years after issuance, which coincides with the end of the Braves's initial license term.
The bonds are limited obligations of the Authority and " shall not constitute ... an obligation, debt or a pledge of the faith and credit of the County or the State of Georgia, nor shall the County or the State be subject to any pecuniary liability thereon." The Bond Resolution further explains that the bonds are payable only from the pledged security, which includes the stadium site assets owned by the Authority and the payments made under the Intergovernmental Agreement. The Bond Resolution recites that " [a]fter careful study and investigation, the Authority hereby determines that the Project is permitted by the [Authority's enabling act] and that financing, acquisition, construction, and equipping of the Project will be in furtherance of the Authority's public purpose." In the County's approval of the Bond Resolution, the County Commission recites its findings that the County's citizens will get " continuing recreational and other benefits from the Project" and that " the Project will promote tourism, promote the economy, and bring other benefits to the County and the State."
(d) The Intergovernmental Agreement :
To provide security for the bonds, the Authority and the County entered into the Intergovernmental Agreement (IGA). Under the IGA, the Authority agrees to issue the bonds, and the County in turn agrees to pay an amount sufficient to cover the principal and interest on the bonds as well as the administration costs and other reasonable fees incurred by the Authority in connection with the bonds and the stadium project. The County will do so using " any funds lawfully available to it," and to the extent those funds do not cover the payments, the County agrees to levy ad valorem property taxes as necessary. The license fees the Authority receives from the Braves parties will also be put toward payment of the bonds.
(e) The Trust Indenture :
The Trust Indenture is an agreement between the Authority as the bond issuer and the U.S. Bank National Association establishing a trust. The trustee is assigned the right to receive the payments made by the County under the IGA and the license fees paid by the Braves parties, and also holds a security interest in the stadium project's property. The agreement defines the bonds as limited obligations of the Authority payable solely from the trust estate, and the trustee promises to pay the amount of the bonds only from the trust estate. If the Authority defaults on its obligations, the trustee is given the rights and remedies that the Authority has against the project under the IGA.
In the IGA, the Authority appoints the County as its agent and representative for constructing the project on the Authority's behalf, and the County agrees to take responsibility for all project-related duties, including overseeing the Braves parties as outlined in the Development and Operating Agreements. The IGA recites that its term
will not exceed 50 years and that when the bonds are no longer outstanding and the Operating Agreement has terminated, the County will have the right to acquire title to the Authority's property in the project.
2. After all of these agreements were entered, the Authority notified the Cobb County district attorney that it proposed to issue the revenue bonds. A bond validation hearing was then scheduled in the Cobb County Superior Court, and after notice was published on June 27 and July 4, 2014 in the Marietta Daily Journal, the hearing was held on July 7. By the time of the hearing, the court had received 16 motions to intervene from Cobb County residents, including the three Appellants in this case; nine of the residents, including the three Appellants, appeared at the hearing and were permitted to intervene and present evidence and oral argument. At the hearing, the State proffered the relevant documents, and Hobgood called witnesses and proffered other evidence. Some of Hobgood's proffered evidence related to the negotiations between the County, Authority, and Braves parties, but the trial court sustained the Authority's objections that the negotiations were not relevant to the validity of the bonds. On July 25, 2014, the trial court issued a 38-page order confirming and validating the stadium project bonds. Each Appellant filed a timely notice of appeal, and the three appeals were consolidated for decision by this Court. The Court heard oral arguments on February 3, 2015.
3. " [W]hether a proposal to issue bonds is sound, feasible, and reasonable is a question for the trial court, and its findings about soundness, feasibility, and reasonableness must be sustained on appeal if there is any evidence to support them." Greene County Dev. Auth. v. State, 296 Ga. 725, 726 (770 S.E.2d 595) (2015). Of course, if the issuance of the bonds would be illegal, they cannot be validated. See Nations v. Downtown Dev. Auth. of the City of Atlanta, 255 Ga. 324, 328 (338 S.E.2d 240) (1986) ( Nations I ) (invalidating two provisions of a bond resolution because they violated the Georgia Constitution). Compare Reed v. State, 265 Ga. 458, 459 (458 S.E.2d 113) (1995) (" Because the contractual payments [guaranteeing ...