From the AJC this am
What you need to know about Forsyth’s Gathering and NHL talks
Proposed $390 million subsidy package contingent on developer landing an expansion hockey team.
By Zachary Hansen -
[email protected]
DEVELOPMENT
After months of silence on the issue of potential public subsidies, Forsyth County taxpayers now know a potential amount of public funds commissioners could devote to an ambitious plan to bring pro hockey and a huge mixed-use community to a site along Ga. 400.
The Gathering at South Forsyth team envisions a $700 million arena near Cumming surrounded by rows of apartments, retail, offices, hotels and parking decks. The project will likely cost more than $2 billion, including the arena. But that doesn’t include the substantial cost to the developer to establish a pro hockey franchise, assuming the NHL looks to expand.
Forsyth leaders have signaled they’re prepared to chip in $390 million of public funds to help finance the endeavor on one condition — landing an expansion franchise before getting any taxpayer money. I believe since the latest news is that the county has greenlit construction that the NHL has conveyed to the county/Krause that a team will be awarded and we are pending a formal announcement
Those negotiations are ongoing, with no binding paperwork in place. Here’s what you need to know as commissioners consider the proposal:
Who is the developer?
Car dealership magnate Vernon Krause. He’s the CEO of Krause Auto Group, which operates 18 car dealerships with more than 1,000 employees across the Southeast.
Who else is on the development team?
The Gathering team includes sports advisory Stafford Sports, law firms Greenberg Traurig and Dovin Ficken, planners from the firms of Nelson Worldwide and SCI Architects, and the U.S. Sports and Entertainment Development Advisory Practice of the real estate services giant JLL. Frank Ferrara, a former NFL finance director, was tapped last year as the Gathering’s senior project executive. Ferrara also led the effort to build Mullett Arena at Arizona State University, the temporary home of the NHL’s Arizona Coyotes.
Does Krause have an NHL franchise?
No. At least not yet. The Gathering developers have discussed seeking an NHL expansion team.
What would it take to land an NHL franchise?
Pro hockey leadership would need to pursue expanding beyond the league’s 32-team roster. NHL Commissioner Gary Bettman recently said, “We don’t have expansion on the agenda right now,” but Atlanta is on the shortlist of cities seen as contenders if the league chooses to add teams. Other top options include Houston, Salt Lake City and Quebec City, Canada. Lamar Wakefield, an executive with Nelson, said it would take more than $1 billion to set up an expansion franchise.
Could an existing hockey franchise relocate?
Potentially. The Coyotes are currently playing at Arizona State after voters in a Phoenix suburb rejected a proposal to use taxpayer funds to build a new arena last May. However, the Gathering team has said it’s unlikely the Coyotes would move east and have said they’re targeting expansion.
Does Krause have any other investors?
Krause’s team has declined to disclose any other potential project investors. Wakefield said the team would leverage the mixed-use aspects of the development to raise some of the needed funds.
Where is the project site?
Originally zoned for a mall that never came to fruition, the 84-acre property is along Union Hill Road near Ga. 400 in the southeastern Forsyth. Krause paid $52 million to buy the land in August 2022.
What would the project include?
The most recent plans consist of an 18,700-seat arena surrounded by roughly 1 million square feet of office space, 400,000 square feet of retail space, a community center, a fire station and a sheriff’s precinct. The site plan also includes 1,800 apartments, 150 single-family homes and multiple hotels with up to 500 rooms. Total on-site parking could be up to 8,780 spaces, most of it in decks.
What would Forsyth County provide?
Current negotiations start with the county funding half of the arena’s construction cost, a $350 million subsidy. The county could also provide $40 million to build one of the project’s parking decks. All public financing is contingent upon the NHL awarding an expansion team ahead of time, officials said.
How does this compare to other sports-related developments?
The Atlanta Braves received $300 million from Cobb County in 2013 when the team moved from downtown Atlanta to the Battery and Truist Park. State and local taxpayers contributed $200 million in bonds to Mercedes-Benz Stadium, backed by hotel-motel tax revenue. Hundreds of millions of additional dollars from the same tax will go toward the stadium over a total of 30 years. Atlanta also contributed $142.5 million to State Farm Arena’s renovation in 2016.
What would be built if the NHL does not pick the Gathering for expansion?
That remains unclear, but the Gathering team would be able to move forward with their plans — just without the substantial subsidies outlined in the agreement. The Gathering team has previously said an 18,000-plus seat arena would be viable even without an anchoring sports team, but it would have to compete with other large venues for concerts and events.
If the NHL comes, would Forsyth need to do anything else?
Yes, there are a few critical hurdles the county would need to clear with both the General Assembly and Forsyth voters. A majority of county voters would have to grant the county certain redevelopment powers through a referendum, allowing the county to create a Tax Allocation District. The state Legislature would also have to establish an arena authority and increase For-syth’s hotel-motel tax collections to 8% from 5%. Without those, the project “becomes extraordinarily challenging and essentially unfeasible,” County Attorney Ken Jarrard said.
What would be the economic impact?
The county commissioned an economic impact report from Ernst & Young, which found the entire Gathering project would generate $2.6 billion in economic impact, while the project would create nearly 8,750 permanent jobs. Office jobs in the speculative buildings make up the largest portion of that forecast job figure — 5,261. Corporate tenants would be the source of those workers, but there’s also no guarantee the buildings would fully lease or that those jobs would be net new ones to the region. Roughly 35% of the total forecast workers are expected to be Forsyth residents. Experts who analyze stadium and arena deals generally find they do not live up to the economic and job-creation promises made to win public funding.
Would the county get any revenue from arena events?
Yes, Forsyth would get $1 for every event ticket sold for the arena’s first five years. After that, the revenue would periodically increase until reaching $2.50 per ticket after 16 years. A NHL franchise would also have to pay $2 million a year to lease the arena and wouldn’t be able to leave or relocate until all arena-related debt is settled. Stadium-related revenue would first go to the county’s debt services, after which it could fund any county-related activity.
How long will it take to build the Gathering?
The proposal is to build the project across four phases, fully completing it in 2033.
