‘More Than Just Baseball’
City and county officials discuss and answer questions about the proposed publicly-funded baseball stadium in Knoxville.
Knox County Mayor Glenn Jacobs delivered a vigorous pitch for the proposed publicly funded baseball stadium for Knoxville during a public informational meeting on Thursday.
City and county officials say the project is affordable and would benefit the community.Once a skeptic of the project, the libertarian-leaning county mayor said the stadium is about more than baseball.
“This is a multi-use, multi-purpose facility with an anchor tenant that will form the foundation of one of the largest economic development projects in county history,” he said. “In fact, I believe that the financing package we have assembled, one that includes $140 million in private development and most importantly, no additional tax burden on our taxpayers, will be the model for municipal stadiums and arenas going forward.”
Knoxville Mayor Indya Kincannon was a little more restrained but no less supportive of the proposed stadium, which would become the new home of the Tennessee Smokies if officials decide to move forward.
“This project is about so much more than just baseball, and I will be excited, hopefully, along with so many others, to see baseball back in Knoxville, very close to its original roots,” she said. “But this project is really about investing in our community. It's an opportunity to revitalize and bring new life to a blighted area that has sat vacant for 20 years, it's about jobs, and a location connected with protected, affordable, and mixed-income housing.”
The meeting, held virtually and broadcast by Community Television of Knoxville, was one of many promised by city and county officials as the months-long vetting process plays out.
City and county officials, plus a representative from Boyd Sports, the company owned by businessman and University of Tennessee President Randy Boyd, gave a presentation of the proposal and took questions from the public submitted in advance.
Boyd has proposed a publicly financed stadium, which could cost up to $65 million, as the centerpiece of a project that would represent a more than $200 million investment in the blighted warehouse district east of the Old City. Boyd’s GEM Development Group would build a $140 million mixed-use development surrounding the stadium.
Knox County Chief Financial Officer Chris Caldwell, Knoxville Chief Economic and Community Development Officer Stephanie Welch and Mark Mamantov, bond counsel to both governments, reviewed the preliminary financing plan that relies on multiple revenue streams.
The city and county have formed a sports authority that would build and own the stadium, and would issue revenue bonds to pay for construction. The revenues that would cover the debt service payments would, for the most part, be generated by the new development.
“The resources that we're talking about here do not currently exist,” Jacobs said. “So when folks are talking about diverting resources, they ain't there to begin with at all, and the only way that they are there is if this project moves forward.”
The revenue streams include a lease the team would pay for the use of the stadium, sales taxes generated by the stadium, payments in lieu of taxes from the private development and sales taxes from an area surrounding the project, pending the creation of a special sales-tax district by the state Legislature. The city and county would have to make up any difference between the new revenues and the debt service payment totals.
Though the exact figures haven’t been worked out, Mamantov said the city and county could easily meet that obligation without a tax increase.
Caldwell said the county plans to use revenue from its hotel/motel tax to cover its portion of any shortfall. Welch said the city can easily afford it as well.
“We're proposing $500,000 this year for a master planning process for Western Heights,” she said. “We're estimating that the city's portion of the debt service would be in that range. We're talking about less than a million dollars a year in debt service payment for the city, and the county we've been looking at the same.”
Mamantov said the lease agreement would be crafted in a way that protects taxpayers from unforeseen problems.
“The lease with the Smokies would be the same term as the length of the financing, and if they defaulted or tried to terminate prior to the bonds being paid,there would be financial penalties that would make sure that the bonds were paid off,” he said.
Caldwell emphasized that the stadium would be a multi-use venue used for sports other than baseball, plus concerts, festivals and other events.
“We think that's very important and is a big draw to this piece of civic furniture for Knoxville and Knox County,” he said.
In response to questions raised by the public on community engagement, Boyd Sports CEO Doug Kirchhofer rattled off a list of the project’s efforts.
The initiatives include a partnership with the Knoxville Area Urban League to recruit disadvantaged businesses as contractors during construction and retail outlets afterwards, plus job training and placement; the formation of an advisory board headed by Beck Cultural Exchange Center Executive Director Renee Kesler to ensure the project honors the history of the area; and support for youth baseball in East Knoxville.
City Councilwoman Amelia Parker and others have called for a more formal community benefits agreement, which is a legally enforceable deal struck between a developer and one or more community organizations to guarantee a project has a positive impact on the surrounding area.
During a public meeting last month, Boyd was cool to the idea of a formal community benefits agreement, however, and no group has publicly announced it would seek one.
“Boyd Sports over the past 12 months or so has been very proactively reaching out to the community, particularly stakeholders and leaders in the East Knoxville community, to share information and gather information about expectations and plans,” Kirchhofer said Thursday.
Welch said the investment in the stadium would not affect the city’s other funding priorities.
“Our capability as governments is to do multiple things, whether it's investing in parks or investing in schools, investing in addressing really challenging issues such as homelessness and gun violence,” she said.
Officials emphasized that the decision-making process is still in its early stages. City Council and County Commission should vote on a slate of candidates for the sports authority board of directors next month, and multiple public meetings are going to be scheduled before any vote is taken to move forward. That process should go deep into the summer.
“Very, very ambitiously, we are all looking toward a fall ’21 through spring ’23 construction schedule, and the stadium opening in the spring of 2023,” Welch said.