The deal to bring the $50 million Atlanta Hawks training facility to Brookhaven first was nicknamed “Operation Slam Dunk.” But Brookhaven Mayor John Ernst, an Atlanta Hawks season ticket holder, suggested “Operation Windmill Dunk.”
“I thought we should name it after Dominique Wilkins’ signature dunk,” Ernst said in an interview. Wilkins, known as the “Human Highlight Film,” played a key role in the team’s success in the 1980s and is known as one of the best dunkers in the NBA.
The deal, dubbed “Operation Windmill Dunk” on the city’s Development Authority agendas last month, became public on April 5 during a press conference at Philips Arena when the Atlanta Hawks announced a partnership with Emory Healthcare, Emory University’s medical clinic affiliate, to build a 90,000 square-foot, state-of-the-art practice facility in Executive Park in Brookhaven. The deal includes a $36 million tax abatement from Brookhaven for the Hawks.
The facility will combine the Hawks’ training facility and Operations Department with Emory sports medicine facilities. Emory will become the team’s official sports medicine provider and gets naming rights to the facility. Emory’s entire Sports Medicine Center will move to the Brookhaven site as well.
The move to Brookhaven is a “signature moment for the city,” Ernst said at the April 12 City Council meeting. “This is a good deal for Brookhaven.”
The Emory/Hawks partnership is a $50 million deal for the land purchase and building construction with $14 million being covered by Emory Healthcare and the Hawks funding $36 million. Emory University will then provide a ground lease to the Hawks for the practice facility.
That $36 million is where the city of Brookhaven comes in to play as the sixth man for the Hawks.
To secure the deal to have the Hawks and Emory locate the facility in Brookhaven, city officials agreed to offer the Hawks a $36 million tax abatement.
That means that after the building is constructed, the Hawks will transfer ownership of it to the Brookhaven Development Authority. Because the authority is a governmental agency, it is not required to pay taxes.
“It was a ‘use it or lose it’ kind of situation,” Ernst said about the tax abatement.
To have a tax abatement, the authority must own the land, Ernst said, because government agencies don’t pay taxes.
In turn, the DA then issues a $36 million bond that is purchased by the Hawks, he explained. “There is no debt. The building is the only collateral,” he said.
In return for the tax abatement, the Hawks will pay the authority $302,900 a year for 15 years. The deal in turn saves the Hawks $302,900 in taxes.
This is a100 percent tax abatement, Ernst said. Without the abatement, the Hawks would end up paying more than $600,000 a year in taxes.
Ernst also said that had Emory and the Hawks decided to build in Executive Park with no assist from the city of Brookhaven, the city would have only received about $35,000 a year in taxes – the rest would have gone to county and state governments.
Marietta was also being considered for the Hawks to locate a new practice facility, Ernst said, and there was also the chance the Hawks could have gone with Decide DeKalb, a county development authority. If the Hawks had gone with either of those, the city of Brookhaven would have gotten nothing, Ernst said.
What happens if, for some reason, the Hawks default on the $36 million bond? Ernst promises the city will not be caught holding the ball. The Development Authority only has the title of the building, not the land because Emory owns the land, he explained. Should the Hawks default the authority would transfer the building back to the Hawks and the city would recoup all back taxes, he said.
How to spend the $302,900 coming into the city’s coffers over the next 15 years is something City Council members will be considering. Ernst said he hopes it can be used in the area where the development is taking place, for improvements to traffic, for example.
Ernst plans to host a town hall on Thurs., April 28, at 6:30 p.m. at Montclair Elementary School, 1680 Clairmont Place NE, to address citizen questions about the facility and its impact on Brookhaven.
How the deal began
The first meeting between city officials and the Hawks and Emory took place in early February.
Council member Joe Gebbia, who represents the district where Executive Park is located, said he put together the meet ing at City Hall with Emory’s top management to fulfill part of the vetting process necessary for both sides to candidly discuss what a potential purchase of Executive Park would mean.
There were two key takeaways from this meeting, he said.
“First, they informed us they would not seek tax-free status. This condition was essential because our long-term validation for the original annexation was always predicated on full and taxable redevelopment of Executive Park,” Gebbia said.
“We planned for a seven-year period before we would reach that phase, and now with this … purchase we would minimally be on target but most likely well ahead of schedule,” he said.
Second, Gebbia said he presented the positive developments occurring in Brookhaven and particularly along the Buford Highway corridor, including: the advent of the Peachtree Creek Greenway; the announcement that Children’s Health Care of Atlanta is building a new corporate headquarters across the street; and the redevelopment of Regency Plaza.
“The Emory management team was also doing their vetting and trying to decide if the purchase of Executive Park in our city was conducive to their growth plans — and I can tell you they walked away very happy,” Gebbia said.
“The combination of Emory buying Executive Park and the Hawks aligning with them to create a world-class sports medical facility puts Brookhaven in an unbelievable position,” he said.
The effect on Buford Highway will be unavoidable, Gebbia said, but still very positive. He said he is already getting inquiries from hotels interested in moving into this part of town and that he expects to hear from many more entities in the near future.
“What I am most proud of is having put the original deal together that enabled Brookhaven to annex the east side of I-85,” Gebbia said.
Come on, more corporate welfare? We’ve had enough of big highly profitable companies paying no taxes while the city around us decomposes and the rest of us pay more and more.