Stadium Goes 2 for 2
The Sports Authority OKs moving forward with the $80.1 million project while the Planning Commission signs off on the development plan.
The proposed future home of the Tennessee Smokies swept a regulatory double-header on Wednesday, with plans gaining approval from the city-county Sports Authority and the Knoxville-Knox County Planning Commission.
The stadium's site plan is in place if the funding gets approved.
The Sports Authority accepted the responsibility to build the 7,000-seat multi-purpose stadium and issue $65 million in revenue bonds to pay for the bulk of the construction. Later in the day, the Planning Commission signed off on street closures for the stadium site and the $80.1 million project’s final development plan. All the votes were unanimous.
The Sports Authority’s vote on an interlocal agreement was the first of three needed to move the project forward. County Commission will vote on the interlocal agreement next Monday and City Council will follow on Tuesday.
“It provides some assurance to all parties that this is something we’re committing to do,” Stephanie Welch, the city’s chief economic and community development officer, told Sports Authority board members at their morning meeting at the Knoxville Museum of Art.
Though the interlocal agreement would allow the Sports Authority to issue revenue bonds, as a practical matter that won’t happen until other agreements are in place to guarantee the revenue streams that would go toward servicing the debt.
“You’re not committing at this juncture to do anything,” bond counsel Mark Mamantov told board members.
The annual debt payment on the bonds is estimated to be about $3.2 million. The Smokies, as the primary tenant, would pay $1 million a year in rent under a lease agreement that will have to be finalized and approved at a later date. Also needed for approval are payment-in-lieu-of-tax (PILOT) and tax increment finance (TIF) agreements for the $100 million-plus private development surrounding the stadium, which would provide more money for debt payments. The rest of the payments would come from sales tax revenues generated at the stadium, with city and county tax revenues used as a “last dollar” bridge.
“It will not be feasible for you to issue bonds until (the revenue streams) are in place,” Mamantov said.
A $13.5 million state grant and nearly $6 million in funding from Smokies owner Randy Boyd would complete the financing.
Welch, Mamantov and Knox County Chief Financial Officer Chris Caldwell have been the lead negotiators for the agreements on behalf of the Sports Authority, which doesn’t have its own staff.
Sports Authority board member Richard Bass, a retired bank executive who served as trustee of the Maryland Sports Authority during the construction of professional baseball and football stadiums in Baltimore, said authorizing a bond issue but securing funding sources before issuing them is common.
“What we're doing is the normal course of what you do in my 30 years of municipal financing,” Bass said.
The Sports Authority also discussed the lease agreement with Boyd Sports, the parent company of the Smokies, and the development agreement with RR Land LLC to build the stadium. Boyd owns both companies, and the Sports Authority is tasked with approving the pacts.
The lease and development agreements are close to being finalized, but some issues remain unresolved.
Board member Nikitia Thompson said she would like to see the goal of hiring disadvantaged business enterprises — minority-, woman- and veteran-owned businesses — to fill 15 percent of the contracting opportunities increased to 20 percent. She also said she wants to see that figure made a requirement and not just a goal.
“I would like to see a commitment because it’s going to be the people’s park,” she said.
Culver Schmid, the Sports Authority’s legal counsel, cautioned that the board would need to tread lightly about mandatory contracting targets.
“There are legal and constitutional issues about hard commitments,” he said.
At its meeting during the afternoon, the Planning Commission approved a handful of stadium-related measures. (The Planning Commission meeting was rescheduled for Wednesday because it originally fell on Veterans Day.)
Without discussion, planning commissioners signed off on the final development plan for the 21.5-acre site at the edge of the Old City, which is a required step for the property’s Planned Development designation. Planned Development allows for greater flexibility in designing projects than otherwise permitted under the property’s zoning.
Planning staff had recommended approval because the final plan essentially complied with the preliminary plan planning commissioners approved in September.
The site plan consists of the stadium, including retail space facing Jackson Avenue, and three mixed-use buildings that make up the private development. There would be a public plaza on the western edge of the site and space for future buildings that would be part of the private development.
The overall plan includes landscaping, lighting and utilities plans, plus a parking study and a traffic impact analysis.
The plan application noted that each year the stadium would host 70 baseball games, 20 soccer matches, small monthly concerts, three to four large concerts, and numerous smaller events.
The parking study found that the stadium would need 1,750 parking spaces during major events. There are 12,508 publicly owned parking spaces on lots, on streets and in garages within a one-mile radius of the site. The study’s analysis of usage found that there is plenty of unused capacity in the area, and the development group is working with Knoxville Area Transit on game-day trolley and transit solutions.
Planning commissioners also approved a series of street closures needed to consolidate the disparate parcels owned by RR Land LLC into the project’s site. The closures involve portions of Campbell Avenue, Patton Street and Willow Avenue, plus a city right-of-way adjacent to First Creek at Willow Avenue. City Council will need to sign off on the closures for them to become final.