S15A0277. SAVAGE v. STATE OF GEORGIA et al. S15A0278. PELLEGRINO v. STATE OF GEORGIA et al. S15A0279. HOBGOOD v. STATE OF GEORGIA et al.
S15A0277, S15A0278, S15A0279
Supreme Court of Georgia
JUNE 29, 2015
JULY 27, 2015
297 Ga. 627 | 774 SE2d 624
NAHMIAS, Justice.
Wall Ellison, James B. Wall, James W. Ellison, for appellees.
NAHMIAS, Justice.
Appellants Larry Savage, Richard Pellegrino, and Tucker Hobgood challenge the trial court‘s validation of revenue bonds that will be used to help finance a new stadium in Cobb County for the Atlanta Braves major league baseball team. The bonds for the stadium project are to be issued pursuant to an intergovernmental agreement between Cobb County and the Cobb-Marietta Coliseum and Exhibit Hall Authority, under which the Authority agrees to issue bonds to cover much of the cost of constructing the stadium and the County agrees to pay the Authority amounts sufficient to cover the bond payments not covered by the licensing fees paid by the Braves. In these consolidated appeals, we conclude that the intergovernmental contract is valid; that the issuance of the bonds will not violate the Georgia Constitution‘s debt limitation clause, gratuities clause, or lending clause or Georgia‘s revenue bond laws; and that the process used to validate the bonds was not deficient. We therefore affirm the trial court‘s judgment validating the stadium project bonds.
1. The Cobb-Marietta Coliseum and Exhibit Hall Authority was created in 1980 as “an instrumentality and a subordinate public corporation of the State of Georgia” for the purpose of “development and promotion in this state of the cultural growth, public welfare, education, and recreation of the people of this state.” Ga. L. 1980, p. 4093, § 2. Since its creation, the Authority has overseen the construction of the Cobb Galleria Centre, Galleria Specialty Mall, and Cobb Energy Performing Arts Centre, and it continues to oversee the management of those complexes. In 2013, representatives from the Authority, Cobb County, and the Atlanta National League Baseball Club, Inc. (the Club) began to discuss building a new 41,500-seat
(a) The Development Agreement: The Development Agreement provides that the Braves parties will oversee the construction of the stadium project with approval and oversight by the County. The Braves parties, who own the land on which the stadium will be built, will convey to the Authority the “stadium site,” which will consist of the footprint of the stadium and any Authority parking areas. The Authority will retain title to the stadium site, and the Authority will also own “all real property constructed, installed and placed on the site,” including the stadium, the public infrastructure, and “all items permanently affixed thereto and therein.” The Braves parties will retain ownership of “certain specific Improvements, fixtures, furnishings, equipment, other personal property to be placed in or upon the stadium and related property, and other tangible property,” including items such as seating, scoreboards, lockers, and carpet. The Braves parties will also own and manage a “private stadium parking area of not less than 6,000 spaces.” In addition, the Braves parties will own the land surrounding the stadium, where they intend to develop a mixed-use retail, entertainment, residential, hospitality, and office district.
The total cost of the stadium project is anticipated to be $622 million, with a maximum cost of $672 million. Revenue bonds issued by the Authority will pay for $368 million (about 55 to 60%) of the project. The Cumberland Community Improvement District will contribute $10 million to the project, and the County will contribute $14 million for transportation improvements.3 The remaining cost will be paid by the Braves parties, with a contribution of at least $230 million and the option to increase that amount by $50 million as necessary. The Development Agreement specifies that none of the money coming from the government entities will be used for the
(b) The Operating Agreement: The Operating Agreement grants the Braves parties a license for exclusive use of the stadium site, the stadium, and the Authority‘s parking areas from May 27, 2014 until December 31, 2046, with an option to extend the license through December 31, 2051.4 During this period, the Braves parties may lease or license use of these areas to third parties, and the County may hold three events per year at the stadium, totaling up to ten days per year. At the end of their license, the Braves parties must surrender the stadium site to the Authority or County but have the right to remove property owned by them unless such removal would result in the stadium “not being susceptible to use in its normal and customary manner as a multi-use sports facility.”
During the period of the license, the Braves parties have a right to all revenues from the stadium, including from the Authority‘s parking areas and from advertising in the stadium and on any marquees built on the stadium site or on County land. The Braves parties also may sell the naming rights to the stadium and keep the resulting revenues. Beginning in 2017 and continuing as long as they retain the license, the Braves parties will pay the Authority a yearly license fee of $3 million, and during the 30-year term from the expected completion date in 2017 to the end of 2046, the Braves parties will pay an additional annual license fee of $3.1 million. When the Operating Agreement terminates, the Braves parties have the exclusive option to buy the stadium, stadium site, and/or Authority‘s parking areas for 50% of fair market value. The Operating Agreement states that the County and the Authority “believe that the development and construction of the Stadium will provide a significant and much needed catalyst for revitalization and continuing redevelopment of the property in the vicinity of the Stadium.”
(c) The Bond Resolution: The Bond Resolution, which was approved in nearly identical versions by the Authority and the County Commission, authorizes the Authority to issue revenue bonds for up to $397 million to finance the stadium project and cover the cost of issuing the bonds. The maximum principal and interest payment on the bonds shall not exceed $25 million per year, and the final maturity date of the bonds will be no later than 30 years after issuance, which coincides with the end of the Braves‘s initial license term.
(d) The Intergovernmental Agreement: To provide security for the bonds, the Authority and the County entered into the Intergovernmental Agreement (IGA). Under the IGA, the Authority agrees to issue the bonds, and the County in turn agrees to pay an amount sufficient to cover the principal and interest on the bonds as well as the administration costs and other reasonable fees incurred by the Authority in connection with the bonds and the stadium project. The County will do so using “any funds lawfully available to it,” and to the extent those funds do not cover the payments, the County agrees to levy ad valorem property taxes as necessary.5 The license fees the Authority receives from the Braves parties will also be put toward payment of the bonds.
In the IGA, the Authority appoints the County as its agent and representative for constructing the project on the Authority‘s behalf, and the County agrees to take responsibility for all project-related duties, including overseeing the Braves parties as outlined in the Development and Operating Agreements.6 The IGA recites that its
(e) The Trust Indenture: The Trust Indenture is an agreement between the Authority as the bond issuer and the U.S. Bank National Association establishing a trust. The trustee is assigned the right to receive the payments made by the County under the IGA and the license fees paid by the Braves parties, and also holds a security interest in the stadium project‘s property. The agreement defines the bonds as limited obligations of the Authority payable solely from the trust estate, and the trustee promises to pay the amount of the bonds only from the trust estate. If the Authority defaults on its obligations, the trustee is given the rights and remedies that the Authority has against the project under the IGA.
2. After all of these agreements were entered, the Authority notified the Cobb County district attorney that it proposed to issue the revenue bonds. A bond validation hearing was then scheduled in the Cobb County Superior Court, and after notice was published on June 27 and July 4, 2014 in the Marietta Daily Journal, the hearing was held on July 7. By the time of the hearing, the court had received 16 motions to intervene from Cobb County residents, including the three Appellants in this case; nine of the residents, including the three Appellants, appeared at the hearing and were permitted to intervene and present evidence and oral argument. At the hearing, the State proffered the relevant documents, and Hobgood called witnesses and proffered other evidence. Some of Hobgood‘s proffered evidence related to the negotiations between the County, Authority, and Braves parties, but the trial court sustained the Authority‘s objections that the negotiations were not relevant to the validity of the bonds. On July 25, 2014, the trial court issued a 38-page order confirming and validating the stadium project bonds. Each Appellant filed a timely notice of appeal, and the three appeals were consolidated for decision by this Court. The Court heard oral arguments on February 3, 2015.7
3. “[W]hether a proposal to issue bonds is sound, feasible, and reasonable is a question for the trial court, and its findings about soundness, feasibility, and reasonableness must be sustained on
There is no dispute that the bonds for the stadium project are adequately secured by the County‘s pledge under the Intergovernmental Agreement to cover all bond costs not covered by the license fees paid by the Braves parties. The challenges to the bond proposal instead rest on claims, made by the three Appellants in various combinations, that the IGA is not a valid intergovernmental contract under the Georgia Constitution, and that the issuance of the bonds violates the Constitution‘s debt limitation clause, gratuities clause, and lending clause, as well as Georgia‘s revenue bond laws. For the reasons discussed below, these arguments fail, and we therefore conclude that the trial court did not err in validating the bonds. Pellegrino and Hobgood also raise several challenges to the procedures used in validating the bonds, all of which we conclude are meritless.
4. We begin by addressing whether the Intergovernmental Agreement between the County and the Authority is a constitutionally valid intergovernmental contract. See
(a) We first consider the Intergovernmental Agreement‘s subject matter. Unlike the local authorities in cases like Frazer v. City of Albany, 245 Ga. 399 (265 SE2d 581) (1980), and Nations v. Downtown Dev. Auth. of the City of Atlanta, 256 Ga. 158 (345 SE2d 581) (1986) (Nations II), the Authority here will not be leasing the stadium to the County for its own primary use; instead, the facility is being licensed exclusively to the Braves parties for at least the first 30 years after completion. Thus, the IGA is not for the joint or separate use of facilities by the government parties. However, the IGA does qualify as a contract for services. The Authority agrees to issue the bonds, to acquire and hold title to the real property involved in the stadium project, and to license the property to the Braves parties. And the County agrees to appoint construction and project managers and to oversee the design and construction of the stadium that the Authority will own for at least as long as the bonds are outstanding.
Savage and Hobgood argue that the services provided by the Authority are insufficient. It is true that the IGA differs from the contracts considered in previous cases in which the local authority provided more extensive services, such as managing the construction or operation of the project. See, e.g., Avery v. State of Ga., 295 Ga. 630, 630 (761 SE2d 56) (2014) (“The IGA obligates the Airport Authority to operate, maintain, and provide the facilities necessary to use the improved taxiway.“); Frazer, 245 Ga. at 399-400 (explaining that the Albany-Dougherty Inner-City Authority would acquire the land for a civic hall, lease it to the city, and hire a manager to oversee construction).
This difference, however, does not render the IGA invalid. The Authority is providing services that it is authorized to provide, as discussed below, and those services are proper subjects for an intergovernmental contract. See Nations I, 255 Ga. at 328 (indicating that a contract “for the issuance of the bonds” would be a contract for services within the meaning of the intergovernmental contracts clause); Frazer, 245 Ga. at 400 (discussing a contract under which a local authority provided the “service of issuing revenue bonds“). See also
(b) We next consider whether the Intergovernmental Agreement “deal[s] with activities, services, or facilities which the contracting parties are authorized by law to undertake or provide.” The laws creating and governing the Cobb Coliseum and Exhibit Hall Authority authorize it to undertake “projects,” which are defined to include
the acquisition, construction, equipping, maintenance, and operation of multiuse coliseum and civic center type facilities to be used for athletic contests, games, meetings, trade fairs, expositions, political conventions, agricultural events, theatrical and musical performances, conventions, and other public entertainments, and the usual facilities related thereto, including, without limitation, refreshment stands and restaurants, and facilities for the purveying of foods, beverages, publications, souvenirs, novelties, and goods of all kinds, whether operated or purveyed directly, or indirectly through concessions, licenses, leases, or otherwise, parking facilities or parking areas in connection therewith, recreational centers and areas including, but not limited to, gymnasium and athletic facilities and related buildings, and the usual and convenient facilities appertaining to such undertakings and the extension and improvements of such facilities, acquiring the necessary property therefor, both real and personal, and the lease, sale and licensing of any part or all of such facilities, including real and personal property, to any persons, firms, or corporations whether public or private so as to assure the efficient and proper development, maintenance, and operation of such facilities and areas, deemed by the authority to be necessary, convenient, or desirable . . .
Ga. L. 1980, p. 4096, § 5 (2). The Authority is also empowered to issue revenue bonds to pay the costs of “the acquisition, construction, reconstruction, improvement, addition to, or extension of such project.” Id., p. 4100, § 6 (7). Accord Cobb County Ord. § 2-187 (7). Thus, the Authority is plainly authorized to acquire and license the stadium site, including the stadium, infrastructure, and other improvements
As for the County, the Constitution authorizes it to provide “[p]arks, recreational areas, programs, and facilities.”
In Anderson, this Court rejected a constitutional vagueness challenge to the term “recreational purposes” as used in the Recreational Property Act,
Under the ordinary meaning of “recreational,” a stadium and surrounding area designed for people to gather together to watch and enjoy baseball games — our traditional “national pastime” — and other athletic and entertainment performances certainly qualifies as a “recreational area” and a “recreational facility.” See Youngblood v. State, 259 Ga. 864, 867 (388 SE2d 671) (1990) (describing the proposed Georgia Dome as a “facility for recreational use and benefit of the citizens“). See also New Jersey Sports & Exposition Auth. v. McCrane, 292 A2d 580, 595 (N.J. 1971) (“A sports stadium is for the recreation of the public and is hence for a public purpose . . .” (citation omitted)). The County is therefore authorized to provide such a stadium, directly or through contracts with public or private entities. See Mesteller v. Gwinnett County, 292 Ga. 675, 676-677 (740 SE2d 605) (2013) (explaining that a county may choose to provide a constitutionally authorized service through a contract with a private company). And the County may use any revenue at its disposal to provide the funding for that permissible project, including its general tax revenue. See Clayton County Airport Auth. v. State, 265 Ga. 24, 26 (453 SE2d 8) (1995) (“The pledge of the County‘s ‘taxing power is
(c) Finally, Savage and Hobgood argue that even if the Authority and the County are authorized to provide a stadium, they are not authorized to provide this stadium, because it will not benefit the public. They point to the laws governing the Authority, which require that its projects “shall be for the development and promotion in this state of the cultural growth, public welfare, education, and recreation of the people of this state.” Ga. L. 1980, p. 4099, § 6 (5); Cobb County Ord. § 2-187 (5). Similarly, the Constitution says that the County “may expend public funds to perform any public service or public function as authorized by this Constitution or by law or to perform any other service or function as authorized by this Constitution or by general law.”
Savage and Hobgood maintain that the stadium project is not for public benefit because it will be used exclusively by the Braves parties for at least the first 30 years after completion.10 As reflected in the Operating Agreement, however, the Authority and the County made a specific determination that this project will benefit the public by providing “a significant and much needed catalyst for revitalization and continuing redevelopment of the property in the vicinity of the stadium.” Further, in approving the Bond Resolution, the Authority determined that “the financing, acquisition, construction, and equipping of the Project will be in furtherance of the Authority‘s public purpose,” and the County determined that the project will provide its citizens “continuing recreational benefit and other benefits” and “will promote tourism, promote the economy, and bring other benefits to the County and the State.”
Savage and Hobgood do not dispute that the stadium project will provide these anticipated benefits to the public. Instead, they assert that the private benefits conferred on the Braves parties somehow eliminate any public benefits. The public benefits anticipated here are similar to the benefits anticipated by Paulding County and the Paulding County Airport Authority in deciding to fund and issue
Nor does it matter that some of the benefits to the public will be directly provided by the Braves parties rather than by the government parties, since it is well-established in Georgia law that government entities may contract with private entities to provide public services. See Mesteller, 292 Ga. at 676 (upholding contract between a county and a private company to provide garbage collection services); Strykr v. Long County Bd. of Commrs., 277 Ga. 624, 626 (593 SE2d 348) (2004) (same). See also Smith v. Board of Commrs. of Roads & Revenues of Hall County, 244 Ga. 133, 141 (259 SE2d 74) (1979) (“The fact that the private contractor is paid for its services and may make a profit under such a contract does not invalidate the contract provided the county or its residents receive the services required.“). Likewise, the fact that admission fees will be charged does not prevent the stadium from providing public benefits. Indeed, the admission fees may help fund the jobs and other economic benefits that the County and Authority expect the project to create. See Nations II, 256 Ga. at 159-161 (approving an intergovernmental contract and bonds to develop Underground Atlanta, with plans to lease the buildings to private businesses); Youngblood, 259 Ga. at 866-867 (upholding an intergovernmental agreement between a city, county, and local authority, and approving bonds for construction and operation of the Georgia Dome).
We will defer to the express findings of the Authority and the County that the stadium project will provide public benefits, particularly where those findings do not appear unreasonable and Appellants have presented no actual evidence to the contrary.
Whether the contract now in question is one which will benefit the taxpayers . . . is a question properly for determination in the first instance by the County Commission and finally by actual experience. We are bound by the appellate decisions holding that unless there is an abuse of discretion courts should not substitute their judgment or
interfere with governing authorities in the proper exercise of their judgment concerning such matters.
Smith, 244 Ga. at 141 (emphasis omitted).
For these reasons, the Intergovernmental Agreement is valid under the intergovernmental contracts clause of the Constitution.
5. Savage and Hobgood next contend that even if the Intergovernmental Agreement meets the requirements of the intergovernmental contracts clause, the issuance of the stadium project bonds violates the Constitution‘s debt limitation clause, which says in relevant part:
The debt incurred by any county, municipality, or other political subdivision of this state, including debt incurred on behalf of any special district, shall never exceed 10 percent of the assessed value of all taxable property within such county, municipality, or political subdivision; and no such county, municipality, or other political subdivision shall incur any new debt without the assent of a majority of the qualified voters of such county, municipality, or political subdivision voting in an election held for that purpose as provided by law.
(a) We consider first whether the Authority would violate the debt limitation clause by issuing these revenue bonds.11 The revenue bond provision of the Constitution says unequivocally: “The obligation represented by revenue bonds shall be repayable only out of the revenue derived from the project and shall not be deemed to be a debt of the issuing political subdivision.”
[n]o holder or holders of any such bonds shall ever have the right to compel any exercise of the taxing power of the
In line with the revenue bond laws, the Bond Resolution specifically recites that the stadium project bonds are limited obligations of the Authority, payable only from the pledged security, and the Trust Indenture similarly provides that the bonds are to be paid only with funds pledged to the trust estate. If the Authority defaults on the bonds, the bondholders’ only recourse is to step into the shoes of the Authority as to the stadium project; only the project property and the revenues from the IGA and the Braves parties’ license fees are pledged as security for the bonds. In sum, the Authority clearly will not violate the debt limitation clause by issuing the bonds.
(b) Our conclusion that the County is also not violating the debt limitation clause requires more extensive explanation. The County has no direct liability for the stadium project bonds; indeed, the Bond Resolution expressly declares that the bonds “shall not constitute . . . an obligation, debt, or a pledge of the faith and credit of the County or the State of Georgia, nor shall the County or the State be subject to any pecuniary liability thereon.” Thus, a bondholder could not sue the County directly for payment on the bonds or directly compel any exercise of the County‘s taxing power.
Unlike the Authority, however, the County is not avoiding debt entirely, because under the terms of the Intergovernmental Agreement, the County agrees to pay the Authority up to $25 million per year for the next 30 years to cover the principal, interest, and other costs of the bonds not covered by the Braves parties’ license fees. By contractually pledging its funds to pay for the bonds, the County is incurring a new liability. But this debt is not controlled by the debt limitation clause, because the County‘s pledge is made through a valid intergovernmental contract. And this Court has squarely held in multiple decisions, under each of the last three Georgia Constitutions and in each of the last seven decades, that debt incurred under a valid intergovernmental contract is not subject to the debt limitation clause.
We first held this when construing the 1945 Constitution in Sheffield v. State School Building Auth., 208 Ga. 575 (68 SE2d 590) (1952). The Court harmonized the intergovernmental contracts clause with the debt limitation clause by concluding that debts incurred pursuant to intergovernmental contracts are governed by the clause
Shortly after our current Constitution took effect in 1983, this Court again adhered to our holding reconciling the intergovernmental contracts and debt limitation clauses, explaining that the intergovernmental contracts clause “carves out exceptions” to the debt limitation clause. Nations I, 255 Ga. at 327. See also Nations II, 256 Ga. at 160 (“It is clear a municipality may enter into a contract authorized by the intergovernmental contracts clause for the future expenditure of funds without violating the debt clause of Art. IX, Sec. V, Par. I (a) [of the 1983 Constitution].“). We have confirmed this holding under the 1983 Constitution on numerous occasions, including just a year ago. See Avery, 295 Ga. at 631-632; City of Decatur v. DeKalb County, 289 Ga. 612, 614 (713 SE2d 846) (2011); Reed, 265 Ga. at 459; Clayton County Airport Auth., 265 Ga. at 24-25; Ambac Indem. Corp. v. Akridge, 262 Ga. 773, 775 (425 SE2d 637) (1993); Youngblood, 259 Ga. at 867.
Savage alone argues that we should ignore all of this precedent and instead follow DeJarnette v. Hospital Auth. of Albany, 195 Ga. 189 (23 SE2d 716) (1942), which held that intergovernmental contracts were subject to the requirements of the debt limitation clause. See id. at 204-205. That holding in DeJarnette, however, was expressly distinguished in Sheffield and has not been followed since, because its reasoning is no longer applicable. DeJarnette relied on the fact that the provision for intergovernmental contracts that was added to the Constitution of 1877 in 1941 was an amendment to the section of the Constitution relating to the powers of counties to levy taxes; thus, the Court reasoned, the provision was not meant to “relax or affect the existing constitutional provisions and limitations as to the incurring of debts by political subdivisions.” DeJarnette, 195 Ga. at 190. When a similar issue was raised under the 1945 Constitution in Sheffield, however, the Court rejected DeJarnette, holding that because the intergovernmental contracts clause and the debt limitation clause were now both original portions of the Constitution, they were
Savage‘s argument that we should return to DeJarnette notes a change to the language of the debt limitation clause that occurred with the enactment of the 1983 Constitution. The 1945 and 1976 versions of the clause applied to any “debt hereafter incurred by any county, municipal corporation or political division of this State except as in this Constitution provided for.” Ga. Const. of 1945, Art. VII, Sec. VII, Par. I; Ga. Const. of 1976, Art. IX, Sec. VII, Par. I. The italicized phrase was removed in the 1983 Constitution, but the substance of the clause was not modified in any way relevant here, and this Court‘s interpretation of the clause in relation to the intergovernmental contracts clause — which remained a full-fledged portion of the Constitution — was not changed.
While the Sheffield Court noted the removed phrase in support of its holding, we have found — and Savage has identified — nothing in the drafting history of the 1983 Constitution or the public debate over its ratification that indicates that the understanding of the interaction between the debt limitation clause and the intergovernmental contracts clause established in Sheffield and followed in subsequent cases was meant to be altered. Indeed, the evidence we have found indicates the opposite — that no substantive change of this nature was intended. See Select Committee on Constitutional Revision, 1977-1981, Legislative Overview Committee, Vol. I, Transcript of Meeting of June 30, 1981, p. 61 (describing changes to the debt limitation clause as “principally an editorial revision” and characterizing the relevant paragraph in the new Constitution as “a restatement of the present constitutional provision“).
Moreover, the doctrine of stare decisis strongly counsels adherence to our longstanding, consistent, and workable precedents on this issue. See Ga. Dept. of Natural Resources v. Center for a Sustainable Coast, Inc., 294 Ga. 593, 601 (755 SE2d 184) (2014) (discussing stare decisis considerations). While the doctrine is less compelling with regard to our constitutional decisions, which are harder for the democratic process to correct than our interpretations of statutes, see id., stare decisis is especially important where judicial decisions create substantial reliance interests, as is most common with rulings involving contract and property rights. See State v. Hudson, 293 Ga. 656, 661 (748 SE2d 910) (2013); Rogers v. Carmichael, 184 Ga. 496, 511 (192 SE 39) (1937) (“[T]he rule of stare decisis is usually considered as one more appropriately applied to vested property rights.“); Robinson v. Colonial Discount Co., Inc., 106 Ga. App. 274, 276 (126 SE2d 824) (1962) (“‘The court has found adherence to the settled rule especially desirable in cases involving the security of contracts, property interests, wills and trusts and commercial transactions in general.‘” (citation omitted)).
That is the situation here. A ruling that intergovernmental contracts are no longer an exception to the debt limitation clause would affect every intergovernmental agreement in which any political subdivision of this State agrees to pay any amount of money for a facility or service, not just the relatively few contracts like the IGA here that involve payments used to defray revenue bonds issued by the counter-party. Because no intergovernmental contract would be valid without the approval of a majority of the voters in the political subdivision, overruling our precedents would cast into doubt countless existing contracts entered without a referendum, as well as plans for future contracts, for a wide variety of facilities and services ranging from hospitals, roads, and recreation facilities to police, fire, animal control, and other public safety services. See, e.g.,
For all of these reasons, we adhere to the holding of Sheffield and its many progeny and conclude that the County‘s promise to pay for the stadium project bonds is not a debt regulated by the Constitution‘s debt limitation clause because the promise was made as part of a constitutionally valid intergovernmental contract.
6. Under the Intergovernmental Agreement, it is clear that the services the Authority will provide constitute contractual consideration to the County, meaning that, contrary to another claim by Savage and Hobgood, the IGA does not violate the Constitution‘s gratuities clause. See
7. The Intergovernmental Agreement also does not violate the Constitution‘s lending clause, which says that a county is prohibited “through taxation, contribution, or otherwise, to appropriate money for or to lend its credit to any person or to any nonpublic corporation or association except for purely charitable purposes.”
8. Savage and Pellegrino argue that the bonds should not be validated because they do not comply with the requirements set forth in the constitutional provision and statutes governing revenue bonds. The Constitution provides that a “political subdivision of this state may issue revenue bonds as provided by general law.”
Revenue bonds must be funded solely from “the revenue pledged to the payment thereof,”
Although the County promises to levy ad valorem taxes if necessary to satisfy its commitments under the IGA, that promise does not make the bonds general obligation rather than revenue bonds. See
Although the bonds are obligations of the Authority and the County cannot pledge its full faith and credit to pay them, the County does have the “authority under [the intergovernmental clause of] the Constitution, to enter into contracts with the Authority and to pledge [its] full faith and credit and levy taxes to meet [its] contractual obligations pursuant to the law of contracts.”
265 Ga. at 26 (citations omitted).
9. Finally, Pellegrino, joined by Hobgood on one point, presents several challenges to the validity of the bond validation proceeding, none of which are persuasive.
(a) Pellegrino argues first that there was not sufficient notice of the validation hearing. The hearing was held on Monday, July 7, 2014. As required by the revenue bond law, notice of the hearing was provided in the Marietta Daily Journal the preceding two weeks, on June 27 and July 4. See
Shortly after the first notice was published, the judge of the Cobb County Superior Court to whom the case was originally assigned, and who was listed in the June 27 notice as the judge who would be presiding, recused himself. The case was then assigned to another judge of the same court, whose name and courtroom number were included in the July 4 notice, which also expressly noted the change in courtroom. On the day of the hearing, the new judge ensured that signs were mounted throughout the courthouse complex, including on the original judge‘s courtroom door, directing people to the correct courtroom for the hearing. Thus, any potential confusion about the location of the hearing caused by the change in the presiding judge was sufficiently addressed, and indeed all three Appellants made it to the right courtroom at the right time for the hearing. Moreover,
That is surely an unusual scheme, but the fact that the issuing entity does not argue against validation does not render the proceeding invalid. See Lilly v. Crisp County School System, 117 Ga. App. 868, 869-870 (162 SE2d 456) (1968) (explaining that a bond validation proceeding “was not advisory, collusive or non-justiciable merely because the defendant [issuing government entity] in its answer admitted the allegations of the petition and offered no showing of cause why the bonds should not be confirmed“). The more significant and realistic protection against improper validation of revenue bonds is provided by the statutory right of any resident of the affected jurisdiction to intervene in the proceedings to present objections and then to appeal the trial court‘s validation decision. See
Unsurprisingly, the Authority asserts that it did not present any reasons why the bonds should not be issued because it did not have any good reasons. Pellegrino makes no colorable claim that this decision was the result of improper professional conduct by the government‘s attorneys. Indeed, all of the arguments that he — and the other intervenors — offered against validation of the bonds were considered by the trial court and were held to lack merit, and we have affirmed the rulings challenged on appeal. In sum, the failure of the
(c) Pellegrino and Hobgood both argue that the trial court erred during the hearing by refusing to admit into evidence documents and testimony they offered regarding the negotiations between the Braves parties, the County, and the Authority. But the court did not abuse its discretion by excluding this evidence. In a bond validation proceeding, “a trial court must consider whether the proposal to issue those bonds is ‘sound, feasible, and reasonable.‘” Greene County Dev. Auth., 296 Ga. at 726 (citation omitted). Appellants have not shown how the proffered evidence about the negotiations between the government parties and the Braves parties would be relevant to those questions, because the unambiguous financing documents discussed in Division 1 above are controlling, not the discussions that led up to them. Nor have Appellants shown how the exclusion of this evidence was harmful. See
(d) Last, Pellegrino complains that after the hearing, the trial court erred by failing to make specific written findings, even though Hobgood filed a pretrial motion for findings of fact and conclusions of law and reiterated that request at the hearing. Pellegrino, however, did not join in those requests or make a post-judgment motion for such findings, see
In any event, Pellegrino‘s complaint is meritless. He takes issue with the statement in the court‘s order overruling “any and all other objections.” Beyond that blanket statement, however, the order said: “The Intervenors presented various objections which the Court has consolidated into the following twelve (12) issues addressed in this Section III. The Court fully considered the evidence and testimony the Intervenors presented at the bond hearing.” The order then addressed each of those 12 issues, which include all of the substantive objections raised by the three Appellants at the hearing and on appeal here. The trial court‘s approach was appropriate and sufficient, and Pellegrino fails to identify any objection that got short shrift.
10. In conclusion, after considering as a whole the documents described in Division 1 above, it is evident that the lawyers and
In so holding, we do not discount the concerns Appellants have raised about the wisdom of the stadium project and the commitments Cobb County has made to entice the Braves to move there. But those concerns lie predominantly in the realm of public policy entrusted to the County‘s elected officials for decision, not in the realm of constitutional or statutory law. And to the extent the concerns affect whether the bond proposal is sound, feasible, and reasonable, we defer to the trial court‘s findings on those factors, which were supported by evidence in the record. Compare Greene County Dev. Auth., 296 Ga. at 727-728 (affirming the trial court‘s refusal to validate bonds, where evidence presented at the validation hearing permitted the court to find that the proposal was not sound, feasible, and reasonable). If the stadium deal does not fulfill the high expectations that have been set for it, there may be a significant political price to pay for those who negotiated and signed onto it. But under the law of Georgia as construed in the precedents of this Court, we cannot say that the trial court erred in validating the bonds or that the validation process was deficient. Accordingly, we affirm the trial court‘s judgment.
Judgment affirmed. All the Justices concur.
DECIDED JUNE 29, 2015
Revenue bonds. Cobb Superior Court. Before Judge Leonard.
Larry Savage, pro se.
Pelphrey & Pelphrey, Gary R. Pelphrey, for Pellegrino.
Hobgood & Rutherford, T. Tucker Hobgood, David A. Rutherford, for T. Tucker Hobgood.
D. Victor Reynolds, District Attorney, for State of Georgia.
Sutherland, Asbill & Brennan, Thomas W. Curvin, Matthew W. Nichols; Deborah L. Dance, Linda W. Brunt; Moore, Ingram, Johnson
Schiff Hardin, Ronald B. Gaither, Leah Ward Sears, Nicholas F. McDaniel; Loren C. Collins, amici curiae.