ATLANTA — Atlanta Mayor Kasim Reed has confirmed that he met this week with NBA all-star Grant Hill, one of the new owners of the Atlanta Hawks, about the team's future in Atlanta.
That future likely involves either a major renovation to Philips Arena or a brand-new arena at one of two potential sites.
Channel 2's Justin Gray has learned that road blocks for a new facility could come from the nation's capital and from one of the mayor's closest allies.
Cranes are going across metro Atlanta as construction continues on a new dome for the Atlanta Falcons downtown and a new home of the Atlanta Braves in Cobb County.
Now as the Hawks explore joining the arena building boom, possibly trading in 16-year-old Philips Arena, there could be trouble from an unlikely source: The White House and President Barack Obama.
You have to sort through hundreds of pages of the president's proposed 2016 budget to find it, but inside the budget is a plan to eliminate tax-free bonds for building stadiums.
"The president hit the nail right on the head trying to get rid of these tax-exempt bonds for stadiums," said David Williams with the Taxpayers Protection Alliance.
The tax-exempt bonds were a key part of funding construction of the new downtown Falcons stadium.
Treasury Department sources told Gray that eliminating the tax breaks for stadiums would raise $542 million for the federal government in the next 10 years.
"A tax-exempt bond is just as bad as an earmark or any other spending project because this is money not coming to the government," Williams said.
Georgia U.S. Sen. Johnny Isakson, a Republican, sits on the Finance Committee and says it's unlikely the president's stadium proposal goes anywhere without much larger tax code revisions.
“You just take one of these single issues out. You throw it on the wall and see if it sticks, but in the end, tax reform has to be comprehensive,” Isakson told Gray.
Reed said he hasn’t yet reviewed Obama’s proposal, but that “it’s highly unlikely that will pass in time to impact us.”
In a rare break from the president, Reed indicated that he disagrees with restricting the use of tax-exempt municipal bonds for sports stadiums.
“I don’t believe in removing the tools from cities because running a city is a very complicated and difficult matter,” Reed said. “And I think that we need all of the tools that are available to us as long as the voters authorize and support our behavior.”
Reed then repeated what he believes makes the Falcons deal a boon for the city. Atlanta is contributing $200 million in bonds backed by hotel-motel taxes to help build the $1.4 billion stadium, a project set to also receive potentially hundreds of millions more in additional tax revenue.
"No property taxes or taxes were raised to support that debt. The bond holders look solely to the hotel-motel tax and the City of Atlanta makes $8 million to $10 million a year,” Reed said. “Having the Hawks in the City of Atlanta is very important to me and so we’re going to work to make it happen."
Channel 2's Justin Gray and the Atlanta Journal-Constitution contributed to this article.
Cox Media Group