Decision time looms for arena
The clock is ticking on whether to carry out a $429 million expansion of the Birmingham-Jefferson Convention Complex.
Sunday, May 13, 2007
STAN DIEL News staff writer
With just four weeks left for the Legislature to knock down the biggest remaining obstacle to an expansion of the BJCC, proponents say that for the first time they have the support of big players in the business community.
Business leaders who had not taken a public position on the proposal to build a half-billion-dollar, 40,000-seat arena say a downsizing of the original plan and a presentation at a meeting last week has won their support. Among those who say they are sold on the idea are Alabama Power Co. Chief Executive Charles McCrary and Regions Financial Corp. President C. Dowd Ritter.
"I, for one, think it's a great idea," Ritter said.
The Birmingham-Jefferson Convention Complex earlier had pitched a much larger expansion, including a 65,000-seat arena. That proposal and variations of it encountered public opposition and quickly fell out of favor with some city and county officials.
In 1998, voters rejected a plan to enact a 1 cent sales tax and use some of the proceeds to build a domed stadium.
But at a meeting of the Birmingham Business Leadership Council on Wednesday, BJCC Executive Director Jack Fields and a consultant from a sports architecture firm made a case for the smaller, 40,000-seat arena that would cost about $429 million, including other improvements to the BJCC.
Now that Birmingham is unlikely to win an NFL franchise, they said, the BJCC has realistic hopes of landing only one event a year that would need more space - the Magic City Classic football game.
Getting the go-ahead:
McCrary said he is among those who had serious reservations about the proposal to build an NFL-sized facility, but is now convinced the city needs the smaller arena.
"The BJCC is tired, and I think it's time for the city of Birmingham to put on a new set of clothes," he said. "I think it's important for Birmingham to be able to compete."
For the facility to be built, the BJCC needs the support of both the Birmingham City Council and the Jefferson County Commission. Efforts to reach council members, some of whom have said they will support only an arena designed with later expansion in mind, were unsuccessful. But Fields said the council, which contributes $8.8 million a year to the BJCC's budget, supports the current plan.
Bettye Fine Collins, president of the County Commission, said the support of that body hinges on legislation in Montgomery that would ensure the county's ability to continue collecting a half-percent occupational tax. The tax generates $60 million a year for the county, $10 million of which goes to the BJCC. Without that $10 million in guaranteed income, the BJCC's bankers won't sign off on the $495 million bond issue that would finance arena construction, Fields said.
About the occupational tax:
The future of the county occupational tax is in question, however, because of a series of events that began with its repeal by the Legislature in 1999. After the tax was repealed, a court ruled that the law repealing it was unconstitutional, saying not enough state legislators voted for it under a procedure in which only local lawmakers voted. Under the Alabama Constitution, many local matters come before the entire Legislature.
A state Supreme Court ruling in an unrelated case later upheld the method of voting, and the tax continued to be collected. Some taxpayers demanded refunds, however, and on Friday formalized their argument by filing suit in Circuit Court. The suit, which seeks class-action status, argues that the state should have stopped collecting the tax after the 1999 repeal, and seeks refunds for taxpayers.
A bill before the Legislature would rewrite the law that created the tax, presumably bringing the legal fisticuffs to an end and ensuring continued collection of the tax. Two bills introduced by state Rep. Arthur Payne, R-Birmingham, have not reached committee. There's no guarantee the Legislature will consider the proposals in the four weeks before the session ends.
Sen. Jabo Waggoner, R-Vestavia Hills, said if the House acts on an occupational tax bill, he is confident it would pass in the Senate.
"I think it would be totally irresponsible for the Legislature not to revalidate the occupational tax. We would bankrupt the county. You're talking between $400-$600 million," he said.
"Everybody in Alabama knows I'm for the project , but the occupational tax bill has to originate in the House and that has not happened."
The plan does not have the endorsement of Rep. John Rogers, D-Birmingham, co-chairman of the county legislative delegation. Rogers said building anything less than the larger dome would be unfair.
"If Charles McCrary or the Business Council wants to build a 40,000-seat stadium, let them put the money up. I will not participate in it," Rogers said.
Payne, also co-chairman of the county delegation, said the occupational tax bills may not pass in this session because of problems in the Senate.
"I don't think they will be able to pass any local bills," Payne said. "Something has to be worked out in the Senate before any local bills can be passed."
If the occupational tax bill passes the Legislature and both the City Council and County Commission endorse the plan, the BJCC would sell $495 million in bonds, according to materials the BJCC released at last week's presentation to business leaders. The BJCC would earn an additional $37 million in interest on the revenue from the bond sale while construction is under way.
Where money would go:
Construction of the arena, with a price of $380 million, would consume most of the revenue from the bonds. Other expenditures related to the project would include $12 million on other improvements to the convention complex, $10 million on parking improvements, $17 million on property acquisition - mostly for new parking lots - and $10 million on street work.
More than $75 million in revenue from the bonds would be used to pay off two previous bond issues, which were done in 2002 and 2005.
The problem with the existing facility, Fields said, is not just that there's not enough room to host bigger events. It's that managers must often turn away events it is big enough to host because it sometimes takes a week to set up or take down an event. If the BJCC is occupied by workers taking apart last week's convention, they can't set up this week's event, he said.
With the addition of a new arena, the BJCC could host more events, and host more events simultaneously.
Another strike against the existing arena, which would still be used if a new arena were built nearby, is a lack of private suites, Fields said. Plans for the new facility, developed by international sports architecture firm HOK Sports, include luxury suites.
A new arena, which would be big enough to host football and soccer games, also would host traditional conventions. The lights, near the ceiling for sports, would be lowered, leaving the arena's upper seats in darkness for conventions.
"This truly is a multipurpose facility," Fields said.
Who would use it?:
A 40,000-seat arena also would mean a larger universe of events that would consider Birmingham. A list of possible events circulated by the BJCC includes the Papajohns.com bowl game, the SWAC Championship football game and UAB football games. Efforts to reach UAB athletics department officials for comment were unsuccessful.
Such an arena probably would be sufficient to host the NCAA basketball Final Four, Fields said, but the city likely would not host that event because it has an insufficient number of hotel rooms. Earlier rounds of the tournament probably could be played in the expanded BJCC, he said.
News staff writer Barnett Wright contributed to this report.
sdiel@bhamnews.com
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