## Facts

- Cobb County and the Cobb–Marietta Coliseum and Exhibit Hall Authority (a state-created public authority) arranged financing for construction of a new Atlanta Braves stadium in Cobb County.
- The Authority approved a memorandum of understanding in 2013; in 2014 the parties executed project documents, including a Development Agreement and an intergovernmental agreement (IGA) between the County and the Authority.
- The Braves agreed to lease the stadium for at least 30 years, contribute at least $230 million toward development costs, and pay an annual fee to the Authority.
- The Authority planned to issue approximately $397 million in revenue bonds as limited obligations payable only from pledged revenues and security, including stadium-site assets and payments under the IGA.
- Under the IGA, the County agreed to make payments sufficient to cover bond payments not covered by Braves’ licensing fees.
- Taxpayers challenged the financing as unconstitutional and unlawful, arguing the County’s commitments were disguised long-term debt, an improper transfer of public value to private parties, and an improper pledge of public credit; they also disputed that the IGA reflected valid governmental “services.”
- The superior court conducted a bond-validation proceeding, heard objections, and validated the bonds and related arrangements; the challengers appealed.

## Issues

1. Whether the IGA was a valid intergovernmental contract supported by governmental services or functions performed by the Authority.
2. Whether the County’s payment obligations under the IGA created unconstitutional debt without voter approval under Georgia’s debt limitation clause.
3. Whether the financing arrangement violated Georgia’s gratuities clause by providing public resources to private parties without adequate consideration and public benefit.
4. Whether the arrangement violated Georgia’s lending clause by lending or pledging governmental credit to private entities.
5. Whether the bonds satisfied Georgia revenue bond statutes and whether the bond-validation process was procedurally sufficient.

## Decision

- The Supreme Court of Georgia affirmed the validation judgment.
- The court held the IGA was a valid intergovernmental contract and that bond issuance by the Authority constituted a sufficient governmental service consistent with its statutory mission.
- The court held the bonds and County payment structure did not violate the debt limitation clause, relying on the limited-obligation structure and annual-revenue/appropriation principles.
- The court held the arrangement did not violate the gratuities clause because the Authority would own the facility, the Braves provided substantial consideration, and the project served public purposes recognized by the County and Authority.
- The court held the arrangement did not violate the lending clause because the bonds were obligations of the Authority secured by pledged revenues and assets, and the County’s role arose through a permissible intergovernmental contract.
- The court held the bonds complied with revenue bond law and the validation proceeding was not deficient.

## Legal Principles

- An intergovernmental contract is valid when each governmental party undertakes permissible governmental services or functions; a public authority’s issuance of bonds for public facilities can satisfy that requirement when consistent with its statutory powers and purposes.
- For Georgia constitutional debt-limitation purposes, obligations structured as limited, fiscal-year commitments tied to current revenues and non-appropriation/annual appropriation mechanics may avoid characterization as prohibited long-term debt.
- A stadium financing arrangement does not violate the gratuities clause when supported by adequate consideration and reasonably determined public benefits, including public ownership and legitimate public purposes such as recreation and economic development.
- The lending clause is not violated where the legal structure does not constitute a prohibited pledge of governmental credit to a private entity and the financing is undertaken through authorized governmental instruments and pledged project revenues.
- Revenue bonds may be validated when issued under statutory authority, secured by permissible pledged revenues, and confirmed through a validation proceeding providing required notice, opportunity to object, and necessary judicial findings.

## Conclusion

The Georgia Supreme Court upheld the stadium project revenue bonds and related IGA, concluding the intergovernmental financing structure was authorized and that it did not violate Georgia’s debt limitation, gratuities, or lending provisions, and that statutory revenue bond and validation requirements were satisfied.


Savage v. State, 774 S.E.2d 624 (Ga. 2015)