Cost overruns for Gwinnett Braves stadium

September 9th, 2008 FinanceBuzz Posted in Bert Nasuti, Entertainment and Sports, Gwinnett County Commission, Kevin Kenerly, Mike Beaudreau, Real Estate Development No Comments »

One of the topics that I highlighted during my recent hiatus from the Buzz was the announced cost overruns for the Gwinnett Braves stadium currently under construction in the Mall of Georgia area.  We first learned a week and a half ago that the cost for the new stadium would come in at $59 million, $19 million more than the original estimate of $40 million.  This represents an overrun of nearly 50%! The overrun itself does not make this inappropriate use of taxpayer dollars any more egregious than it already was, but it does highlight the cavalier attitude our elected officials take to using our money.  Once committed to a project, going back to the virtually bottomless well of the public funds is an easier political move than defending the full level of spending at the outset.  Politicians don’t have to carefully consider the business case for the additional costs since the funds can be taken by force from Gwinnett taxpayers.  They only have to calculate the political impact and count on the fact that many voters either fall in line like sheep and gleefully hand over their money or that they are too absorbed in trivial pursuits until a week or two before an election.

So what items are contributing to these overruns?  Surely, this is a case of unexpected increases in the cost of materials, labor, services and other costs associated with a building project, right?  As football commentator Lee Corso would say, “Not so fast, my friend!”

More than a third of the increased cost comes from upgrades from the original plans that include an addition to the concourse to make it completely circle the stadium, a canopy over parts of the stadium and upgraded finishes.

Another third results from additional site work to put stormwater detention underground, build beefier retaining walls necessary to maximize use of the site, increased sewer costs and unexpected rock removal costs, Tucker said.

The increase also includes $1.5 million to make the stadium more environmentally friendly, in part by using partially treated wastewater to irrigate the field and flush toilets.

These enhancements do not seem to fall into the category of unexpected hurdles found after construction began that had to be addressed.  Convenient that they did not get included in the initial design that was foisted upon taxpayers.  And “upgraded finishes?”  Much easier to splurge when the money is there for the taking.  Of the $19 million overrun, only $3.2 million or approximately 17%, can be attributed to the typical cause of higher than anticipated project costs.  However, if you consider this from the perspective of a politician, this all makes sense.

Had the enhancements been included at the time of the stadium proposal, the initial cost would have been over $50 million.  Much easier to commit to the cheaper base model then upgrade to the top-of-the-line model after you have begun  the project.  The Gwinnett Convention and Visitors Bureau admited that the “cost had escalated dramatically because of design decisions made since work at the site began.”  Consider the defenses of members of the County Commission.  District 2 Commissioner Bert Nasuti said, “We’ve got only one opportunity to build it right.”  He was also reported as calling this a wise investment that would produce more revenue than cost.  A large business or factory would bring significant revenue to Gwinnett County, but we don’t see the government building these type facilities for private companies - nor should they!  Perhaps a company locating to Gwinnett may get a preferential tax deal, but that falls far short of building a $59 million facility using $31 million of taxpayer dollars.  District 4 Commissioner Kevin Kenerly said, “I don’t want just to go to a high school field.  I want a first-class facility there.”  Easy to do when you can just take the money from others to realize your goal.  At least District 3 Commissioner Mike Beaudreau displayed some concern about this misuse of taxpayer dollars and implied that he had considered the various business cases available at this juncture.

But I’m not pleased about it, obviously, at all.  I’m very frustrated. But at this point, I looked at every other recourse possible, including plowing it under, and it would all end up being more expensive.

I also take exception to the fact that the board put this question among the “non-controversial” items in their recent meeting.  While I doubt that the comments of citizens would have changed the vote, Gwinnett taxpayers, the very people who are funding the dreams and aspirations of Nasuti and Kenerly, were denied by the board the chance to be heard on the record.  Again, this makes sense from the political point of view: you are about to pick someone’s pocket, so don’t give them a chance to call attention to your actions, especially when you have to go and ask these same people to keep your job when you are next up for reelection.

There is more to say on this issue, but I wanted to first summarize the issue and provide some first thoughts in this initial post before offering a broader framing in a subsequent post.

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Big week for the Gwinnett Braves

June 5th, 2008 FinanceBuzz Posted in Bert Nasuti, Entertainment and Sports, Gwinnett County Commission, Mike Beaudreau, Real Estate Development, Taxes No Comments »

Gwinnett Braves LogoI have to wonder why politicians so often get the spotlight at major community events.  We often see elected officials shoveling dirt at groundbreakings and cutting ribbons at building grand openings, even though,the politician often has little meaningful involvement or role in the activities that precipitated such events.  Yes, they may vote to allow a complex to be built or play mediator between developers and area residents, but the heavy lifting is usually done by others.  Politicians did not design the new building - an architect did.  Politicians did not work out the nitty gritty details of the financing - a banker did.  Politicians did not develop the construction plan - engineers did.  Politicians did not take the risk to establish the business that will occupy the new complex, an entrepreneur did.  So what did the politician do to be there, front and center, smiling for the assembled media?  They convinced a large group of people to choose them over someone else for an elected office.  Understand, I am not suggesting that politicians are not talented, smart, and capable individuals because many are.  However, politicians campaign, and even the most unqualified person can wind up with the job if he or she has excellent people skills and connections.  Once in office, these individuals wield the power to make decisions on the work of experts that they themselves could probably not get hired to do.   We have recently seen a perfect example of this in Mike Beaudreau’s denial of the T-Mobile cell tower in south Gwinnett. Gwinnett Braves stadium groundbreaking

So what does this have to do with the Gwinnett Braves?
 
As I look at the photos of the new stadium groundbreaking near Mall of Georgia, I realize that we may finally have a case where the politicians should be participating in the event.  After all, our Gwinnett County Commission was so nice to promise the private business that is the Atlanta Braves that Gwinnett taxpayers would gladly cover any revenue shortfalls to ensure that the stadium debt gets paid.  Because our commissioners were so actively involved in arranging the financing of the deal (again, I stress, with our money), Mike Beaudreau and Bert Nasuti should be there tossing a big shovelful of dirt as well participating in the team logo unveiling.

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