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Lawsuit argues Mercedes-Benz Stadium should pay $26m a year in taxes

A group of Atalanta residents has brought a lawsuit against AMB Sports and Entertainment (AMBSE), the owners of the Mercedes-Benz Stadium (MBS) in Atlanta, arguing that the operator should pay $26m in property tax every year. If successful, the suit would expose the owners of NFL team the Atlanta Falcons and MLS team Atlanta United, to $700m in taxes over the 30-year contract for the venue.

The lawsuit, led by lawyer Wayne Kendall who represents the group of Atlanta residents, was dismissed last year by Fulton County. But an appeal by the claimant against this ruling was approved by Georgia’s appeal court, forcing the county court to consider it once more.

As it stands, AMBSE is exempt from property tax owing to a pre-existing agreement regarding its previous venue the Georgia Dome.

Kendall’s suit argues that the Mercedes-Benz Stadium has twice as many matchdays as the old venue thanks to the addition of the MLS franchise and that it is now operated 365 days a year. This he argues, qualifies as a long-lease that should not be tax exempt.

The chances of the lawsuit succeeding are thought to be slim. But if it does, it would have an impact on sports stadium operators across the US.

The Mercedes-Benz Stadium, the host of this year’s Super Bowl is one of the most advanced sports venues in the world. It cost an estimated $1.6bn to build, although AMBSE offset most of this cost by securing nearly $1bn in contractually obligated revenue from sponsors in the year it opened – far exceeding revenue commitments from any other sports venue anywhere in the world. Forbes values the Atlanta Falcons at $2.6bn.

AMBSE received plaudits for introducing “fan-friendly” food pricing in the concessions at the new stadium. The stadium operators were happy to trade a 20% drop in concession revenues to secure the goodwill of their fans, but an unexpected increase in volume meant revenues fell by only 7%.