Cottrell v. Atlanta Development Authority, D/B/A Invest Atlanta , 297 Ga. 1 ( 2015 )

In the Supreme Court of Georgia
Decided: March 16, 2015
S14A1874. COTTRELL et al. v. ATLANTA DEVELOPMENT
AUTHORITY d/b/a INVEST ATLANTA et al.
MELTON, Justice.
This case concerns the Superior Court of Fulton County’s validation of
roughly $200 million in municipal bonds (the “2014 NSP Bonds”) to be issued
by the Atlanta Development Authority d/b/a Invest Atlanta (“Invest Atlanta”).
Invest Atlanta and the Geo. L. Smith II Georgia World Congress Center
Authority (“Congress Center Authority”) (collectively, the “New Stadium
Entities”) propose to have the 2014 NSP Bonds issued for the purpose of
funding a portion of the cost of developing, constructing, and operating a new
stadium facility in downtown Atlanta (the “New Stadium Project” or “NSP”) for
the Atlanta Falcons professional football team. Additional funding for the NSP
will be provided by the Atlanta Falcons Stadium Company, LLC (“StadCo”), a
Georgia limited liability company associated with the Atlanta Falcons Football
Club, LLC (the “Club”), as well as through the sale of personal seat licenses.
The NSP is a successor facility to the over twenty-year-old Georgia Dome, and
it will be owned by the Congress Center Authority, which also owns the Georgia
Dome.
Procedurally, on February 4, 2014, the State of Georgia filed a Petition for
Bond Validation in the superior court to authorize the issuance of the 2014 NSP
Bonds. A notice to the public was filed on that same day, as well as a Rule Nisi
Order setting the bond validation hearing for February 17, 2014. Notice of the
proceeding was published in the Fulton County Daily Report on February 7,
2014 and February 14, 2014 as required by OCGA § 36-82-76. Rev. William L.
Cottrell, Sr., Mamie Lee Moore, Tracy Y. Bates, John H. Lewis, III, and Joe
Henry Beasley (hereinafter collectively “Cottrell”) moved to intervene in the
proceedings to file objections to the bond validation, and the trial court allowed
them to do so. Among other things, Cottrell contended that OCGA § 48-13-51
(a) (5) (B), which allows for an extended time period in which a county or
municipality may levy a Hotel/Motel tax for purposes of funding a “successor
facility” to an existing “multipurpose domed stadium facility,” was an
unconstitutional special law. See Georgia Constitution of 1983, Art. III, Sec. VI,
Par. IV (a). The bond hearing was continued until April 10, 2014, and the trial
2
court entered a Consolidated Pre-Trial Order on April 8, 2014. Following the
April 10, 2014 hearing, the trial court entered a May 8, 2014 Validation Order
and Final Judgment validating the 2014 NSP Bonds and overruling all
objections. Cottrell appeals from this ruling, and, for the reasons that follow, we
affirm.
By way of background, the Georgia Dome was, and the NSP is to be,
funded in part by a Hotel/Motel tax levied under OCGA § 48-13-51 (a) (5).1
1
The statute states in relevant part that
(i) . . . a county (within the territorial limits of the special district
located within the county) or municipality is authorized to levy a
tax under this Code section at a rate of 7 percent. A county or
municipality levying a tax pursuant to this paragraph shall expend
an amount equal to at least 51.4 percent of the total taxes collected
prior to July 1, 1990, at the rate of 7 percent and an amount equal
to at least 32.14 percent of the total taxes collected on or after July
1, 1990, at the rate of 7 percent for the purpose of [among other
things]: (I) promoting tourism, conventions, and trade shows.
(ii) In addition to the amounts required to be expended under
division (i) of this subparagraph, a county or municipality levying
a tax pursuant to this paragraph shall further expend (in each fiscal
year during which the tax is collected under this paragraph) an
amount equal to 14.3 percent of the total taxes collected prior to
July 1, 1990, at the rate of 7 percent and an amount equal to 39.3
percent of the total taxes collected on or after July 1, 1990, at the
rate of 7 percent toward funding a multipurpose domed stadium
3
Generally, Hotel/Motel taxes can only be levied at a rate of three percent or less.
See OCGA § 48-13-51 (a) (1) (D) (“Except as provided in paragraphs (2.1),
(2.2), (3), (3.1), (3.2), (3.3), (3.4), (3.5), (3.7), (4), (4.1), (4.2), (4.3), (4.4), (4.5),
(4.6), (4.7), (5), (5.1), (5.2), and (5.3) of this subsection, no tax levied pursuant
to this Code section shall be levied or collected at a rate exceeding 3 percent of
the charge to the public for the furnishings”). However, OCGA § 48-13-51 (a)
(5) (A) provides an exception to this three percent ceiling for Hotel/Motel taxes
by allowing counties and municipalities to levy a seven percent Hotel/Motel tax
as long as a designated portion of the collected tax proceeds is used to fund a
multipurpose domed stadium facility. Before 2010, taxes imposed under
Paragraph (a) (5) of OCGA § 48-13-51 were required to have a stated expiration
date “not later than December 31, 2020.” OCGA § 48-13-51 (a) (5) (A) (ii).
However, the General Assembly amended Paragraph (a) (5) in 2010 to add a
new subsection (B), which allowed those taxing jurisdictions that had previously
levied a tax under Paragraph (a) (5) to extend the stated expiration date to
facility. . . . Any tax levied pursuant to this paragraph shall
terminate not later than December 31, 2020.
OCGA § 48-13-51 (a) (5) (A) (i) and (ii).
4
December 31, 2050, so long as the same portion of the proceeds that had been
used to fund the original multipurpose domed facility was expended to fund a
“successor facility” during the extended period. Pursuant to OCGA § 48-13-51
(a) (5) (B):
Notwithstanding the [December 31, 2020] termination date
stated in division (ii) of subparagraph (A) of this paragraph
. . . a tax levied under this paragraph may be extended by
resolution of the levying county or municipality and continue
to be collected through December 31, 2050, if a state
authority certifies: (i) that the same portion of the proceeds
will be used to fund a successor facility to the multipurpose
domed facility as is currently required to fund the
multipurpose domed facility under division (ii) of
subparagraph (A) of this paragraph; (ii) that such successor
facility will be located on property owned by the state
authority; and (iii) that the state authority has entered into a
contract with a national football league team for use of the
successor facility by the national football league team through
the end of the new extended period of the tax collection.
In order to structure the deal and issue the 2014 NSP Bonds for the New
Stadium Project, the New Stadium Entities created various agreements and took
several steps:
• Based on the 2010 subsection (B) amendment to OCGA §
48-13-51 (a) (5) allowing for an extended period to collect a
Hotel/Motel tax as long as a certain percentage of the proceeds
5
collected during the extended period were expended to fund a
“successor facility,” in March 2013, the City passed City Resolution
13-R-0615, which authorized
the Mayor to execute (1) a Hotel/Motel Tax Funding
Agreement with [Invest Atlanta], as consideration for
Invest Atlanta agreeing to provide for the development,
construction, equipping, and funding of the publicly
financed portion of the cost of a multi-purpose operable
roof stadium through its issuance of revenue bonds
necessary to provide such services and facilities and the
[City] agreeing to make payments from certain
Hotel/Motel Taxes collected under such agreement to
be pledged as security for the [2014 NSP Bonds] (2) a
Hotel/Motel Tax Operation and Maintenance
Agreement [“O&M Agreement”] with [the] Congress
Center Authority for the use of funds in excess of the
amount necessary for payments due under the
Hotel/Motel Tax Funding Agreement to provide for
operation and maintenance services for the new
stadium, all in accordance with OCGA [§] 48-13-51 (a)
(5) [B]; and for other purposes.
The City prepared a Hotel/Motel Tax Funding Agreement with
Invest Atlanta and an O&M Agreement with the Congress Center
Authority consistent with City Resolution 13-R-0615. The City
currently levies a Hotel/Motel Tax, and 39.3 percent of the first
seven percent of the tax will be paid to fund the NSP (the “NSP Tax
6
Proceeds”).
• Invest Atlanta is to issue the 2014 NSP Bonds, which Bonds
will be secured by Invest Atlanta’s pledge and assignment of the
NSP Tax Proceeds to a bond Trustee. The City will collect the tax
and transfer the proceeds to Invest Atlanta, and Invest Atlanta will
use the NSP Tax Proceeds to pay the debt service on the 2014 NSP
Bonds.
• Pursuant to a “Bond Proceeds Funding and Development
Agreement,” Invest Atlanta is to place the proceeds from the sale of
the 2014 NSP Bonds into a Project Fund and instruct the Trustee to
distribute money from the Project Fund to the Congress Center
Authority. The Congress Center Authority will use the money to
fund the New Stadium Project, and the Congress Center Authority
will own the New Stadium Project. The Congress Center Authority
will also raise money to fund a portion of the NSP by selling certain
personal seat licenses. StadCo will provide all additional funds
necessary for the NSP.
7
• After paying the necessary NSP Tax Proceeds to Invest
Atlanta to provide for the payment of the principal and interest on
the 2014 NSP Bonds, the City will allocate the remaining NSP Tax
Proceeds to the Congress Center Authority, consistent with the
extended levy provision of OCGA § 48-13-51 (a) (5) (B). The
Congress Center Authority, in turn, will use those proceeds to pay
a portion of the NSP’s future capital upkeep, maintenance and
operating expenses.
• StadCo and the Club are required to play Atlanta Falcons’
regular-season and post-season home games at the New Stadium
Project for at least 30 years.
1. Cottrell contends that the 2010 subsection (B) amendment to OCGA §
48-13-51 (a) (5) is an unconstitutional “special law” that violates the
Uniformity Clause of the Georgia Constitution. See Ga. Const. of 1983
Art. III, Sec. VI, Par. IV (a). We disagree.
Pursuant to the Uniformity Clause, “[l]aws of a general nature shall have
uniform operation throughout this state and no local or special law shall
8
be enacted in any case for which provision has been made by an existing
general law.” Id. In this regard, a statute would run afoul of the
Constitution if it were “a general law which lack[ed] uniform operation
throughout the state or a special law for which provision ha[d] been made
by existing general law.” Lasseter v. Georgia Public Service Com’n., 253
Ga. 227, 229 (2) (319 SE2d 824) (1984). However,
“‘[o]ur State Constitution only requires a law to have uniform
operation; and that means that it shall apply to all persons, matters,
or things which it is intended to affect. If it operates alike on all
who come within the scope of its provisions, constitutional
uniformity is secured. Uniformity does not mean universality. This
constitutional provision is complied with when the law operates
uniformly upon all persons who are brought within the relations and
circumstances provided by it.' (Cits.) A law which operates
uniformly upon all persons of a designated class is a general law
within the meaning of the Constitution, provided that the
classification thus made is not arbitrary or unreasonable.” [Cit.]
(Emphasis supplied.) State v. Martin, 266 Ga. 244, 246 (4) (466 SE2d 216)
(1996). Indeed, “[t]he General Assembly may [properly] exclude certain
persons or things from the application of a general law.” McAllister v.
American National Red Cross, 240 Ga. 246 (2) (240 SE2d 247) (1977).
As explained more fully below, OCGA § 48-13-51 (a) (5) (B) is a proper
exception to the general law of OCGA § 48-13-51 (a) (1) (D), which
9
imposes a three percent cap on Hotel/Motel taxes, in that the statute
applies uniformly on all taxing authorities which come within the scope
of its provisions, and because the classification made by the statute is not
arbitrary or unreasonable.
As an initial matter, this Court has previously determined that OCGA §
48-13-51 (a) (5) (A), the statute most closely related to OCGA § 48-13-51
(a) (5) (B), is a proper general law. See Youngblood v. State, 259 Ga. 864,
866 (2) (388 SE2d 671) (1990) (upholding constitutionality of § 48-13-51
(a) (5) (A) under the similar Tax Uniformity Clause). In this connection,
OCGA § 48-13-51 (a) (5) (A) provides a proper general law exception to
OCGA § 48-13-51 (a) (1). More specifically, as mentioned previously,
OCGA § 48-13-51 (a) (1) allows for the levy of a Hotel/Motel tax that
may not “exceed[] 3 percent.” OCGA § 48-13-51 (a) (1) (D). There are
several exceptions to this three percent cap on Hotel/Motel taxes, one of
which, OCGA § 48-13-51 (a) (5) (A), allows for the levy of a seven
percent Hotel/Motel tax for purposes of funding a multipurpose domed
stadium facility through December 31, 2020. See OCGA § 48-13-51 (a)
(5) (A) (ii). This exception to the three percent cap on Hotel/Motel taxes
10
is proper, in that it applies uniformly to any “county (within the territorial
limits of the special district located within the county) or municipality” (
OCGA § 48-13-51 (a) (5) (A) (i)) that has decided to levy such an
increased tax, and in that it is reasonable, because allowing this class of
taxing entities to collect an increased tax on “the provision of public
accommodations. . . is not arbitrary[,] as the[] businesses [subject to the
tax] will directly benefit from an increase in tourism and the provision of
local government services within the district” in which the multipurpose
domed stadium facility is being built. Youngblood, supra, 259 Ga. 864,
866 (2) (388 SE2d 671) (1990).
Like subsection (A) before it, OCGA § 48-13-51 (a) (5) (B) is also a
constitutional general law exception to the three percent cap on
Hotel/Motel taxes contained in OCGA § 48-13-51 (a) (1). It is of no
consequence that subsection (B) happens to only impact the New Stadium
Project at this time, as the other counties and municipalities covered under
subsection (A) that could have collected a seven percent Hotel/Motel tax
for purposes of funding their own multipurpose domed stadium facilities
at the time that subsection (A) was passed had every opportunity to do so.
11
We reject the idea that the Legislature is now forbidden from enacting
legislation that affects the class of taxing entities covered under
subsection (A) simply because only one taxing entity chose to take
advantage of implementing a seven percent Hotel/Motel tax for purposes
of funding a multipurpose domed stadium facility over twenty years ago.
To determine otherwise would mean that this class would be forever off
limits for further legislation by the General Assembly simply because only
one jurisdiction stepped into the previously open class. Indeed, even if the
window has now closed for additional entities to begin funding their own
multipurpose domed stadium facilities pursuant to subsection (A), that
would not change the fact that the law itself is a general law that provided
a proper class with reasonable taxing authority for funding a stadium
facility if those class members chose to do so during the time frame in
which they had an opportunity to do so. In this regard, like subsection (A),
subsection (B) applies uniformly to all taxing authorities affected by it.
Likewise, the classification of the taxing authorities affected by
subsection (B) is reasonable, in that (1) there is nothing arbitrary or
unreasonable about allowing the same taxing entities that already have
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experience paying for a multipurpose domed stadium facility through the
collection of a seven percent Hotel/Motel tax under OCGA § 48-13-51 (a)
(5) (A) to collect such a tax in the future to fund a different stadium after
the first tax has expired, and (2) the collection of a seven percent tax by
these authorized entities on “the provision of public accommodations . .
. is not arbitrary[,] as the[] businesses [subject to the tax] will directly
benefit from an increase in tourism and the provision of local government
services within the district” in which the new stadium facility is being
built. Youngblood, supra, 259 Ga. at 866 (2).
Accordingly, we find that OCGA § 48-13-51 (a) (5) (B) is constitutional.
2. Cottrell argues that the Hotel/Motel Tax Funding Agreement
between the City and Invest Atlanta is illegal, and, by extension,
unconstitutional,2 because OCGA § 48-13-51 (a) (5) (B) requires that tax
proceeds collected to fund the successor stadium facility “shall be
expended only through a contract with the certifying state authority,” and
2
Cottrell contends that the contract violates the Intergovernmental
Contracts Clause of the Georgia Constitution. See Ga. Const. of 1983 Art. IX,
Sec. III, Par. 1 (a).
13
the City’s contract with Invest Atlanta is not a contract with “the
certifying state authority.”3 However, Cottrell ignores the fact that more
than one contractual agreement exists to control the manner in which the
NSP Tax Proceeds are ultimately expended by the Congress Center
Authority to fund the NSP. Indeed, as explained more fully below, the
Hotel/Motel Tax Funding Agreement works in conjunction with the Bond
Proceeds Funding and Development Agreement to ensure that the NSP
Tax Proceeds are expended in a manner consistent with the requirements
of OCGA § 48-13-51 (a) (5) (B).
OCGA § 48-13-51 (a) (5) (B) states in relevant part that
[d]uring the extended period of [Hotel/Motel Tax] collection [through
December 31, 2050], the county or municipality shall further expend (in
each fiscal year during which the tax is collected during the extended
period of collection) an amount equal to 39.3 percent of the total taxes
collected at the rate of 7 percent toward funding the successor facility
certified by the state authority. Amounts so expended shall be expended
only through a contract with the certifying state authority.
Pursuant to the Hotel/Motel Tax Funding Agreement, after Invest Atlanta
issues the 2014 NSP Bonds, the City will pay the NSP Tax Proceeds to a
3
The Congress Center Authority is the certifying state authority.
14
bond trustee to whom the proceeds have been assigned by Invest Atlanta.
The funds are used to pay the debt service on the bonds and are
distributed from the bond trustee to the Congress Center Authority
pursuant to a Bond Proceeds Funding and Development Agreement,
which allows the Congress Center Authority, as the certifying state
authority here, to expend the money to fund the New Stadium Project. In
this manner, the City will meet its obligation to ensure that it “expend[s]
[the NSP Tax Proceeds] toward the funding of a successor facility” while
also making sure that the “[a]mounts so expended [to fund the New
Stadium Project] shall be expended only through a contract with the
certifying state authority.” This arrangement complies with the
requirements of OCGA § 48-13-51 (a) (5) (B), and Cottrell’s argument to
the contrary is without merit.
3. Cottrell asserts that the proposed bond transaction violates Art. IX, Sec.
VI, Par. I of the Georgia Constitution and OCGA § 36-82-66 of the
Revenue Bond Law because Invest Atlanta will not own or operate the
NSP. Specifically, Cottrell contends that, because Invest Atlanta would
not “own or operate” the New Stadium Project, the “revenue” to be paid
15
to Invest Atlanta by the City would not actually be revenue “derived from
the project.” See Georgia Constitution of 1983 Art. IX, Sec. VI, Par. I
(“The obligation represented by revenue bonds shall be repayable only out
of the revenue derived from the project”). See also OCGA § 36-82-66
(“Revenue bonds . . . shall not be payable from or charged upon any funds
other than the revenue pledged to the payment thereof”); OCGA § 36-82-
61 (3) (“‘Revenue’ or ‘revenue of the undertaking’ means all revenues,
income, and earnings arising out of or in connection with the operation or
ownership of the undertaking”). We disagree.
There is no requirement that Invest Atlanta own the New Stadium Project
in order for it to issue revenue bonds to fund the project or for the tax
proceeds paid to Invest Atlanta to be considered as part of the “revenue”
to pay for the bonds.4 Indeed, pursuant to OCGA § 36-82-61 (3) of the
Revenue Bond Law, “revenue” consists of “all revenues, income, and
earnings arising out of or in connection with the operation or ownership
4
Cottrell does not dispute whether tax funds may properly be included as
part of the “revenue” to repay a bond issue. He contends only that, because
Invest Atlanta will not “own or operate” the NSP, the tax funds collected here
will not constitute “lawful” revenue.
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of the undertaking.” (Emphasis supplied.) Here, Invest Atlanta need not
be the owner of the NSP, as the Hotel/Motel NSP Tax Proceeds are being
collected “in connection with the [Congress Center Authority’s] operation
or ownership of the [NSP].” In this manner, the NSP Tax Proceeds qualify
as lawful revenue, and Invest Atlanta need not actually own the NSP for
this to be the case.
4. Cottrell further contends that the bond transaction here violates the
Intergovernmental Contracts Clause (see Ga. Const. of 1983 Art. IX, Sec.
III, Par. 1 (a)), in that the NSP is not an authorized “project” of Invest
Atlanta. More specifically, Cottrell argues that, because the NSP is really
a “project” of the Congress Center Authority, and not a project actually
being developed by Invest Atlanta, the NSP is not eligible for bond
financing under the Developmental Authorities Law. See OCGA §
36-62-2 (6) (H) (i) (“Project’ includes . . . [t]he acquisition, construction,
improvement, or modification of any property, real or personal, which
shall be suitable for or used as or in connection with . . . [s]ports
facilities”). Cottrell is incorrect.
Just as there is no requirement that Invest Atlanta own the NSP, there is
17
also no requirement that Invest Atlanta actually construct the NSP in order
to properly issue revenue bonds for the purpose of financing the project.
Pursuant to the Developmental Authorities Law, Invest Atlanta has the
power to “issue [ ] revenue bonds . . . and to use the proceeds thereof for
the purpose of paying all or part of the cost of any project” (OCGA §
36-62-6 (a) (13) (emphasis supplied)), not only those projects
“constructed” or “developed” by the authority issuing the bonds. Nor is
there any language in the Developmental Authorities Law that would
otherwise prohibit Invest Atlanta from using bond proceeds to pay the
costs of another government entity’s project that “promote[s] trade,
commerce, industry, and employment opportunities for the public good
and the general welfare.” OCGA § 36-62-9. See also Youngblood, supra,
259 Ga. at 866 (2) (multipurpose stadium facility would benefit
businesses subject to Hotel/Motel tax in that the facility would bring
about “an increase in tourism”). This enumeration is without merit.
5. Cottrell argues that the trial court erred in failing to hold that City
Resolution 13-R-0615, which extends Atlanta’s existing Hotel/Motel tax
to fund a portion of the construction and maintenance costs of the NSP,
18
is illegal. He contends, primarily, that City Resolution 13-R-0615 is void
because the City enacted it in March 2013, over a year before the
Congress Center Authority provided the City with a tax certification
required by OCGA § 48-13-51(a) (5) (B) to allow for the City to pass
such a resolution.5 Cottrell is mistaken.
In this regard, OCGA § 48-13-51(a) (5) (B) provides in relevant part that
a tax levied under this paragraph may be extended [past the
December 31, 2020 termination date stated in OCGA §
48-13-51(a) (5) (A) (ii)] by resolution of the levying county
or municipality and continue to be collected through
December 31, 2050, if a state authority certifies [among other
things]: (i) that the same portion of the proceeds will be used
to fund a successor facility to the multipurpose domed facility
as is currently required to fund the multipurpose domed
facility under division (ii) of subparagraph (A) of this
paragraph.
By its plain terms, OCGA § 48-13-51 (a) (5) (B) dictates that a seven
percent Hotel/Motel tax may be “levied . . . and continue to be collected
through December 31, 2050” to fund a successor facility if the appropriate
certification is given by the state authority involved (in this case, the
5
It is undisputed that the Congress Center Authority provided the
certification prior to the final bond validation hearing.
19
Congress Center Authority). (Emphasis supplied.) It does not say that a
city resolution cannot be written or passed in anticipation of the required
certification. Nor does it say that a resolution passed before the city
receives the certification would be rendered void. To the contrary, the
statute requires that both the certification be given and the resolution
passed before the City continues to levy and collect the seven percent
Hotel/Motel tax beyond the December 31, 2020 termination date of the
tax being collected to fund an initial multipurpose domed stadium facility
pursuant to OCGA § 48-13-51 (a) (5) (A). In other words, while
subsection (B) can be fairly read to imply that the certification must be
given before a resolution is passed, there is nothing in the statute to imply
that strict adherence to this chronological order of events is necessary in
order for a city to pass a valid resolution or that the failure to adhere to
this chronological order would have the extreme result of rendering prior
authorizing actions void. In any event, here, both requirements have been
met, as the City has passed a proper resolution and it has received the
20
proper certification from the Congress Center Authority.6 Accordingly,
City Resolution 13-R-0615 is not “void,” as Cottrell argues.
6. Cottrell asserts that the trial court erred in adjudicating the validity of
the O&M Agreement7 in this case, because the Agreement did not act as
“security” for the 2014 NSP Bonds. In this regard, he contends that, by
answering any question regarding the validity of the O&M Agreement,
the trial court violated its own self imposed limits on its “subject matter”
jurisdiction. In its final validation order, the trial court stated that “[t]he
purpose of this proceeding is to determine whether as a matter of law the
proceedings for the issuance of the [2014 NSP] Bonds were lawfully
6
To the extent that Cottrell argues that City Resolution 13-R-0615 is void
because OCGA § 48-13-51 (a) (5) (B) is an unconstitutional special law, that
argument fails in light of our holding in Division 1 that the statute is
constitutional. In addition, we find no merit to Cottrell’s argument that the tax
certification given by the Congress Authority in 2014 is allegedly defective, as
the certification itself contains all of the information required by OCGA §
48-13-51 (a) (5) (B) and tracks all of the necessary components of the ongoing
deal between the New Stadium Entities and the relevant parties who will bring
the entire deal to fruition.
7
Pursuant to this Agreement, the City will provide the Congress Center
Authority with any portion of the NSP Tax Proceeds not required to pay the debt
service (and related expenses) on the 2014 NSP Bonds, and the Congress Center
Authority will apply any NSP Tax Proceeds it receives to operate and maintain
the New Stadium Project.
21
conducted and the procedures were complied with, and whether as a
matter of fact there is adequate security for the payment of the bonds.”
Validation Order at 5 n.6. However, the trial court’s statement has nothing
to do with and no control over a superior court’s jurisdiction “to hear and
determine all questions of law and of fact in the [bond validation] case
and [] render judgment” on those issues. (Emphasis supplied.) OCGA §
36-82-77. See also Berry, supra, 277 Ga. App. at 650 (1) (627 SE2d 391)
(2006) (“In a bond validation hearing, the role of the trial court is to
determine whether the bond proposal is sound, feasible, and reasonable”
[Cit.]) (footnote and punctuation omitted). The validity of the O&M
agreement was indeed placed in issue at the April 10, 2014 bond
validation hearing, and the trial court committed no error in rendering a
judgment on this issue. See OCGA § 36-82-77.
7. Finally, Cottrell urges that the trial court erred in failing to find that the
O&M Agreement violates the Intergovernmental Contracts Clause of the
State Constitution, in that this Agreement between the City and the
Congress Center Authority requires the City to reimburse StadCo, a
private company, for certain expenses incurred from events and other
22
activities at the New Stadium Project. Again, we disagree.
Pursuant to the Intergovernmental Contracts Clause:
[t]he state, or any institution, department, or other agency
thereof, and any county, municipality, school district, or other
political subdivision of the state may contract for any period
not exceeding 50 years with each other or with any other
public agency, public corporation, or public authority for
joint services, for the provision of services, or for the joint or
separate use of facilities or equipment; but such contracts
must deal with activities, services, or facilities which the
contracting parties are authorized by law to undertake or
provide.
Ga. Const. of 1983 Art. IX, Sec. III, Par. I (a). Here, consistent with the
Intergovernmental Contracts Clause, the O&M Agreement is solely
between two governmental entities, the City and the Congress Center
Authority; the period of the Agreement does not exceed fifty years; the
Agreement “involve[s] the provision of services, or . . . the joint or
separate use of facilities or equipment;” and it “deal[s] with activities,
services, or facilities which the contracting parties are authorized by law
to undertake or provide.” The fact that StadCo pays some of the
operating expenses for the NSP and is then reimbursed by the Congress
Authority from funds that are specifically earmarked for covering “costs
23
relating to the operation, maintenance and improvements for the New
Stadium Project” does not somehow make the O&M Agreement invalid.
The Congress Center Authority is simply using the necessary funds to pay
for the NSP as it is required to do in a manner consistent with its
ownership of the NSP.8
Judgment affirmed. All the Justices concur.
8
Nor would Cottrell’s challenge to the individual clause of the O&M
Agreement allowing for StadCo to approve any changes to the Agreement
render the entire O&M Agreement invalid. See O&M Agreement § 7.4 (“This
O&M Agreement may not be effectively amended, changed, modified, altered
or terminated by the parties hereto without the concurring prior written consent
of StadCo; provided StadCo shall not unreasonably withhold its consent”).
Indeed, despite the existence of this clause, again, StadCo is not an actual party
to the O&M Agreement, and the Agreement itself contains a severability clause
that would leave the remainder of the Agreement intact even if this particular
provision failed. See O&M Agreement § 7.3. Thus, even if we assume without
deciding that the clause in question were invalid, our analysis regarding the
overall validity and constitutionality of the O&M Agreement would remain
unchanged.
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