Plans advance for Tennessee Smokies stadium in Knoxville's Old City
The project to bring a new Tennessee Smokies baseball stadium to the Old City in Knoxville took two big steps forward.
Knoxvillle Mayor Indya Kincannon and Knox County Mayor Glenn Jacobs jointly announced the appointments of seven people to the newly formed Sports Authority that would oversee the repayment of debt incurred in the stadium's construction.
The announcement advances the partnership of the city and county in the venture, and comes on the heels of a compromise proposed by Tennessee Gov. Bill Lee, lawmakers and local leaders that would provide a $13.5 million state grant to avoid having to expand the sales tax district that will collect money to pay back construction debt.
The state's portion of sales taxes generated by the the stadium on items like tickets, concessions and merchandise will flow to the Sports Authority, which will be charged with paying off the project's debt.
Lee released a list of proposed budget amendments that included the $13.5 million grant for the Sports Authority.
The grant is significant because it would close an important hole in the process. Both city and county leaders had said it would be necessary to create an expanded sales tax district to raise the full amount of money needed for the project, which is projected to cost between $52 million to $65 million. Instead of relying on the expanded tax district, the grant provides upfront the same amount of money an expanded sales tax district was projected to generate over 30 years.
If the compromise proceeds, the city and county get the financing they need and the state avoids having to create a tax district that collects money from sales outside the stadium complex, a move state officials were leery of, said state Rep. Jason Zachary, R-Knoxville, and state Sen. Becky Duncan Massey, R-Knoxville.
Kincannon and Jacobs have been publicly supportive of the project and both said they support the new change.
In a statement, Randy Boyd, University of Tennessee president and owner of the Double-A minor league Smokies baseball club, said he supports the change and thanked Massey and Zachary's work.
When asked if his position at UT gave him special access or influence to secure state funds for a private project, Boyd said he had no discussions about the compromise with the governor.
Boyd has promised he will bring $142 million of private money to build 630,000 square feet of restaurants, retail shops and residences around the stadium if Knoxville, Knox County or both together build the stadium.
The big compromise
There had been legislation working its way through the General Assembly that would have expanded the sales tax district roughly a quarter-mile around the stadium to funnel state sales tax dollars to pay off the stadium debt over 30 years.
Lawmakers and some of Lee’s cabinet members had expressed serious reservations in recent committee meetings about that approach, and hammered out the grant compromise over the weekend.
The proposed legislation, Zachary said, now excludes an expanded sales tax district around the stadium but tweaks rules to allow for state sales tax to be collected from all events inside the stadium, not just baseball as originally proposed. Boyd has said the stadium would host all sorts of events beyond baseball.
The legislation requires the project to receive at least $100 million in private development. Boyd has promised his group of private financiers could provide well over that amount.
This new legislation, along with the state’s $13.5 million grant, would make the project feasible. Jacobs said everyone — both local and state — is on the same page.
Tennessee Gov. Bill Lee makes his remarks during a groundbreaking ceremony for Dogan-Gaither Flats, an affordable, supportive housing and workforce residency for ex-offenders, in Knoxville on Friday, March 5, 2021.
“The money is equivalent to what we expected in revenues from a sales tax district but the project will get it up front, so we don’t have to wait until it’s completed to recapture that money,” he said. “The amendment also shows the state’s commitment to the project and its commitment to helping our area create jobs and further build the community.”
Zachary has carried the legislation in the House and has been a part of the continued negotiations. He likes where plans stand, he said.
“It’s important for everyone to remember that it’s not a stadium, it’s an economic development project for East Knoxville,” he said. “It’s like West Town Mall or Turkey Creek. It’s East Knoxville’s turn. It will completely transform a community.”
Aerial drone photograph of demolition work at the site of the proposed new Smokies baseball stadium in Knoxville, Tenn. on Friday, February 3rd, 2021.
Lee’s budget still has to be approved and the legislation still has to make its way through the Senate and House before Lee can sign it, though the change in funding mechanism does not require the same approval the sports authority did from the city council and county commission.
Proposed Sports Authority members
The Sports Authority will be tasked with studying a proposed publicly-owned sports and entertainment stadium and will finance, build and manage the stadium if it is approved by the Knoxville City Council and Knox County Commission later this year.
Before that, though, the separate bodies will vote on the mayors' recommended appointees to the Sports Authority at their upcoming meetings: April 20 for the city and April 26 for the county.
The proposed appointees are:
Richard H. Bass, retired bank executive and UT graduate who served as trustee for the Maryland Sports Authority that issued bonds for construction of Orioles Park at Camden Yards, the Baltimore Ravens’ stadium, the Baltimore Convention Center and other facilities
Joan C. Cronan, UT women’s athletic director emeritus, speaker, author, consultant and community leader
Jeff Hagood, founding partner with the Hagood Moody Hodge law firm and longtime president of the Knoxville Quarterback Club
Tim Hill, co-founder and president of Hatcher-Hill Properties, which develops commercial and mixed-use properties in Knoxville; Hill serves as a Knoxville-Knox County Planning Commissioner, on the boards of Knox Heritage and CareCuts and as president of the Bearden Village Council
Alvin J. Nance, CEO of LHP Development, formerly the executive director and CEO of Knoxville’s Community Development Corp., and the former vice chairman of the Tennessee Housing Development Agency
Nikitia Thompson, owner/broker of Realty Executives – Nikitia Thompson Realty, a former chair of the Knoxville Utilities Board, secretary of the Knoxville Chamber Board and a community leader who actively works on diversity and equity issues.
Rosalyn Tillman, dean of Pellissippi State Community College’s Magnolia Avenue campus for 21 years
How we got here
The proposed ballpark has not come before either the city council or county commission, though both have begun having public meetings about the project and members generally appear accepting of the idea, though there has been some push back.
Randy Boyd, owner of the Tennessee Smokies, presents possible plans for the team's new baseball stadium in Old City in Knoxville, Tenn. on Wednesday, August 5, 2020. Boyd and company are finalizing their ballpark proposal on property he owns downtown.
As proposed, the ballpark would be the centerpiece of a massive development project near the Old City proposed by Boyd. He has promised he could bring $142 million of private money to build 630,000 square feet of restaurants, retail shops and residences around the stadium if Knoxville, Knox County or both together pay $52 million to $65 million for a publicly owned stadium.
If the city or county fail to pass a financing plan later this year and the deal falls through, Boyd has said he would just build something else on the property he purchased for $6 million in 2016.
If the stadium is not built, the state does not provide a $13.5 million grant, Massey said.
Source: Knoxville News Sentinel, by Tyler Whetstone
The East Tennessee Economic Development Agency markets and recruits business for the 15 counties in the greater Knoxville-Oak Ridge region of East Tennessee. Visit www.eteda.org
Published April 16, 2021