Why does Augusta need a new arena and a sales tax to pay for it? Coliseum authority explains

The Bell Auditorium is closed for renovations, leaving the James Brown Arena as the Augusta Entertainment Complex’s sole venue. But the arena is looking at an even bigger facelift as the Augusta-Richmond County Coliseum Authority works to get a new arena off the ground.

To do that, they need Augustans to approve a special sales tax.

This project has been in the works for several years, and with millions of dollars on the line, there are a lot of questions and uncertainty. The Augusta Chronicle recently sat down with members of the AEC and the coliseum authority to help provide clarity and context.

What is wrong with the James Brown Arena?

After more than 40 years of events, the arena has seen some wear-and-tear. About a decade ago, the Augusta Entertainment Complex had to put a $5 million Band-Aid on some of the mechanical equipment, but it was just a short-term fix and did nothing for the arena's aesthetics. That's all before you get to the issues below the surface.

"The pumps down there run 24/7 and have been running for 40+ years, pumping water out of that basement," said the coliseum authority's vice chairman Brad Usry. "It creates a maintenance nightmare."

In addition, AEC's general manager, Chris Bird, said in 2015 that once an event reaches over 4,000 patrons, there is a real inefficiency from the lack of restrooms and premium assets to concession lines. These and other issues are only exacerbated as time goes on.

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Must the James Brown Arena be replaced or can it be upgraded?

With a price tag exceeding $200 million, building an entirely new arena would be the largest project Augusta has ever seen. But according to project manager HB Brantley, the amount of work that would go into making the necessary fixes and upgrades to the existing structure would cost in the ballpark of $190 million to $210 million. That would also not address some of the big changes they want to make.

"What we're also trying to do is increase the capacity, so we would have to re-work the structure and the geometry of the existing James Brown Arena to accommodate 10,500 seats ... and also to have a suite level," Brantley said.

They also intend to beef up the new arena's structure. Several artists require sufficient rigging for their shows so they can do things like perform on a stage that's suspended from the air. Currently, the James Brown Arena cannot support that kind of rigging so they been unable to host multiple acts.

What are the details of the proposed sales tax?

In April, Georgia Gov. Brian Kemp signed HB 230 which allows for a special 0.5% sales tax in Richmond County, if approved by the county's voters. The bill requires that funds from this tax be used exclusively for the coliseum authority's project. It stops once the project is fully financed and it expressly prohibits the tax from being increased or renewed.

If approved, the bill would allow for a bond of up to $250 million which would allow for the new arena's construction including some wiggle room. However, because a bond acts like a loan, there is interest over time. As such, Augusta Commissioners approved a referendum last month allowing the tax to collect a maximum of $433,196,500. The coliseum authority's attorney Jim Plunkett explained that this is an estimate based on the absolute highest amount the bond allows for and up to a 6% interest rate over time, which is double what their current rate is. Although the project will likely not need all $250 million to get off the ground and Plunkett does not believe the rate will rise to 6%, the model was crafted in such a way to leave room for changes in the economy, labor and other attributes.

The total collected from the tax will also be reduced as AEC secures additional revenue sources like naming rights for the arena's various amenities.

Augustans will vote 'YES' or 'NO' to the tax on Nov. 7. If more than half the votes are in favor, the tax will start at the beginning of the next quarter. The model estimates semi-annual interest payments on the bond up to 2043.

How is the proposed sales tax different from the failed property tax?

The coliseum authority's initial attempt to fund the project was through a new property tax that would have added about $100 per $100,000 of assessed value to Richmond County property owners' bills. In 2021 it failed with 60% of voters rejecting it.

"Part of the issue was that there are users outside of the community that are going to be benefiting, so shouldn't they pay part of that?" Plunkett asked.

As more business is conducted in Augusta, the faster the debt will be paid off, especially during major events like the Masters Tournament and Ironman 70.3 Augusta.

"The beautiful thing is 40% of it is paid for by people outside this community and a lot of the benefits will be realized within Richmond County," Usry said.

Would the authority sell the James Brown Arena's naming rights?

From Mercedes-Benz Stadium in Atlanta to the local SRP Park, several venues make money off the naming rights. While there will be plenty of opportunities in and around the arena for licensing, there have been no discussions about selling the big name above the door.

"We will always honor James Brown," Usry said. "His legacy will always be taken care of in this complex.

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What would happen if the sales tax fails?

Plunkett said the sales tax is the most practical solution for the arena. Augusta does not have a major sports team or other facilities to draw on as is the case for larger metropolitans like Atlanta. Also, even though naming rights and ticket fees help offset costs, they would need an extraordinary amount to cover the project. Additionally, naming rights are often paid over a span of time, but AEC would need money up front to build.

It's hard to predict the future, but if the sales tax fails, Usry believes it would delay the project by at least another five years. However, they are fully committed to this plan and to educating the public on its benefits over the next few months.

This article originally appeared on Augusta Chronicle: New James Brown Arena in Augusta's issues, funding, plans, solutions