Safe at Home

Safe at Home

On a split vote, City Council gives the final approval needed to move the publicly financed multi-use stadium forward.

by scott barker • November 17, 2021
Tennessee Smokies owner Randy Boyd (left) and Boyd Sports CEO Doug Kirchhofer congratulate each other after Tuesday's vote.

City Council took nearly three hours on Tuesday to debate and pass an interlocal agreement that commits Knoxville and Knox County, through their joint Sports Authority, to build a multi-use stadium east of the Old City.

The Sports Authority will be able to issue bonds to pay for construction once financing agreements are in place.

The agreement, previously approved by the Knox County Commission and the Sports Authority, directs the Sports Authority to issue $65 million in revenue bonds to pay the local share of funding for the $80.1 million stadium. It will be the future home of the Tennessee Smokies baseball team and One Knoxville Soccer Club, as well as host to concerts and other events. 

“This is a big hurdle,” Knoxville Mayor Indya Kincannon said after the vote. “I’m excited. I’m really pleased we’re moving forward.”

The final vote was 5-1, with two abstentions. Council members Tommy Smith, Janet Testerman, Andrew Roberto, Lauren Rider and Gwen McKenzie voted to greenlight the project. Amelia Parker voted no, with Charles Thomas and Seema Singh abstaining. Lynne Fugate, who has publicly supported the project, is traveling to Italy on a long-planned visit to her son and wasn’t present for the vote.

The agreement survived a move to postpone the vote for two weeks to allow local labor groups an opportunity to reach a separate workforce agreement with Randy Boyd, owner of the Tennessee Smokies and RR Land LLC, which is going to build the stadium.

Ten of the 13 people who addressed Council on the issue, including several labor leaders, asked for a delay. Singh and Parker had long made it known that they wanted a community benefits agreement of some sort to hold Boyd’s development team accountable for the stadium’s impact. But it was Thomas who made the motion to postpone the vote.

“I’m inclined to approve it in the end, but I don’t feel comfortable going forward tonight,” he said.

Thomas likened the situation to other zoning and land use matters, which often get delayed so developers and community opponents can reach a compromise. 

“If we don’t resolve this now, this issue will linger around,” Thomas said.

“I think we’re going to regret this.”

A community benefits agreement is made between a developer and one or more community organizations to formally obligate the developer to provide broader benefits in exchange for support. The only groups to come forward with a proposal were the unions, who are focused on worker safety, wages, and using local contractors.

Boyd said using a local workforce is a priority. “We’ve been very hyperlocal in our focus,” he said. “Our definition of local is East Knoxville.”

Smith said Boyd and his development team are already working with the Knoxville Area Urban League, the Beck Cultural Exchange Center and others in the East Knoxville community to make sure the project benefits the area. The Urban League, for example, is working with minority-, woman- and veteran-owned businesses to get them ready to participate in the project, as well as setting up job training for individuals.

“When we talk about community benefits agreements, sometimes the agreement becomes more important than the community benefits,” Smith said, explaining that he didn’t think Boyd needed a formal agreement.

Boyd, who has met with labor leaders and said he welcomes their involvement in workforce development, said a postponement wouldn’t result in a formal deal. 

“It’s not a negotiation,” Boyd said, arguing against a delay. “It’s a partnership for what’s good for the community. Nothing’s going to change in the next two weeks.”

Thomas’ motion to postpone action failed 5-3, with only Singh and Parker joining him.

Parker’s concerns were broader than a benefits agreement. The interlocal agreement, she said, committed the city and county, but other important documents, including a stadium development and team lease agreements, haven’t been finalized.

“I don’t want the city to be a hostage to the stadium. Tonight it seems we are entering into a relationship where we will essentially be a hostage,” Parker said. “We really need time to be able to do our due diligence.”

Stephanie Welch, the city’s chief economic and community development officer and one of the lead negotiators on the stadium project, said the commitment had to come first but the financing wouldn’t proceed without the agreements still being negotiated.

The draft lease agreement with Boyd Sports, the Smokies’ parent company, calls for the team to pay $1 million a year toward financing the debt. Sales tax revenues generated in the stadium and a payment-in-lieu-of-tax (PILOT) agreement would cover most of the rest of the annual debt service.

“The Sports Authority would have the authority to issue bonds, but it would not be feasible for the Sports Authority to issue bonds without having revenue sources in place to pay for the debt service,” Welch said.

Welch and bond counsel Mark Mamantov emphasized that the development agreement would make Boyd accountable for any cost overruns over the $80.1 million budget. A contingency fund of about $7 million is in place to take care of change orders and other cost fluctuations typical in a large project.

The agreement gives Boyd more flexibility — the project otherwise wouldn’t be able to give a preference to local contractors, for example — in exchange for taxpayer protection.

“We’ve crafted a fianichal plan to limit the risk to the city,” Welch said.

Smith and Testerman expressed strong support for the project. Rider noted that the Smokies’ former owners didn’t want to stay in East Knoxville when they decided to move to Sevierville in 2001, but leaders such as the late Councilman Danny Mayfield and historian Robert Booker passionately fought for the team to stay.

“This is our opportunity to make it right and make up for letting it slip away the first time,” she said.

Vice Mayor Gwen McKenzie, who represents East Knoxville and downtown, said the stadium could help restore generational wealth in the Black community destroyed during urban renewal projects of the stadium area in the 1960s and early 1970s.

“The stadium project will be one of the largest economic development projects in East Knoxville I’ll see in my lifetime,” she said. “It is bigger than any of us in this room. It’s about the restoration of the Black community.”

After the vote, Boyd said that with the commitment, the real work on the stadium project can begin. “This would be considered spring training,” he said of the initial approval process. “Now we play ball.”