NASHVILLE — Mayor Ron Littlefield is seeking state legislation that would, if it becomes necessary, help the city's Sports Authority or possibly River City Co. purchase AT&T Field to ease the sale of the Chattanooga Lookouts to private buyers and keep the Class AA team playing downtown.
"We don't really want to be a player unless it's necessary to save the team for Chattanooga," Littlefield said in one of several interviews on Tuesday and Wednesday about the legislation.
Current Lookouts owner Frank Burke has been trying to sell the Class AA team since late December 2010 as he and family members settle the estate of their late father, another owner of the team.
Most cities in Tennessee and across the nation build stadiums to attract or retain professional sports teams, Littlefield noted.
But when Burke relocated his team from Engel Stadium to its current downtown site, he and other owners spent $10.2 million to build the new 6,362-seat ball field, which opened in 2000 -- a move officials say was highly unusual in this day and age.
The land beneath the stadium is owned by River City Co., a nonprofit that promotes downtown development through the creation of public spaces. With team owners footing the stadium's cost, River City leases the field -- prime city real estate with a commanding view of the city and Tennessee River -- for $1 a year.
Littlefield said that what he has "gleamed" from discussions with various parties is that "most teams don't own the facilities that they operate in. They operate out of a lease or a rental agreement or something of that nature."
The change in state law would allow the city to divert the state portion of sales taxes from tickets and baseball concessions to assist in paying off bonds used to purchase the facility.
Current state law allows cities or city-created entities to use state sales tax proceeds to pay off bonds they use to construct sports stadiums.
But the law doesn't provide for using sales tax proceeds to purchase an existing stadium. An amendment on a bill filed in the legislature allows city or a city-created entity to do just that.
It would generate an estimated $200,000 to $275,000 or higher revenue stream to pay off bonds, according to city and legislative estimates.
The Sports Authority or the nonprofit River City Co. could then lease the stadium to its new owner at a much higher cost to provide an additional revenue stream for the bonds.
"It's a deal in process and it's a deal that might never happen frankly because it might be sold with different terms," said Littlefield, describing the legislation as giving the city flexibility to act if necessary. "The new ownership might take ownership of it [stadium] themselves.
"This is a move that's a contingency in case we need to exercise the same abilities that other cities have used to build a stadium in this case we would buy it," the mayor said, noting there are "many moving parts."
He said if the city does move forward, the process would be public.
River City President Kim White agreed "it's kind of a convoluted process. ... There's a lot of moving parts there that we're trying to get shored up."
She said because the Burkes "were so willing to put their money up front, we decided to lease it to them at a really nominal cost."
If the team is sold, the lease would be re-examined depending on whether the new owners bought the stadium or not.
"It's really between the Burke family and the buyer how they set it up" regarding whether AT&T Field is sold to a new buyer, White said. She said officials "would love it" if the Burkes remained involved.
Burke has not publicly discussed the sale and no potential buyer has been identified.
Littlefield said the city's goal is to avoid affecting the city's total bonded indebtedness or jeopardizing Chattanooga's AA bond rating and efforts to achieve a AAA rating.
"As I say, this was not something we sought," Littlefield said. "We did not seek this. We just want to make sure we do whatever we can to keep the team intact and in Chattanooga."
The land back in 1999 was valued at $1.2 million. Latest estimates are its worth $9 million, White said. At issue, she said, "is how do we keep that momentum [downtown] going and keep baseball."
Rep. Vince Dean, R-East Ridge, is sponsoring the bill that would allow the city use state sales taxes from Lookouts tickets and concessions sales for the bonds. The bill was in the House Budget Subcommittee on Wednesday.
Because of its cost to the state, estimated by analysts at $275,000 annually, and the fact that the costs of the late-moving legislation was not included in Gov. Bill Haslam's recent budget revisions, the bill was placed "behind the budget."
That means the bill is being held in the subcommittee as final manuevering takes place on the state's $30.2 billion annual spending plan. It may or may not make the cut.
Dean referred questions to city officials. Officials say Senate Speaker Pro Tempore Bo Watson, R-Hixson, is expected to take over the Senate bill used to carry the amendment.
Staff writer Carey O'Neal contributed to this report.
Andy Sher is a Nashville-based staff writer covering Tennessee state government and politics for the Times Free Press. A Washington correspondent from 1999-2005 for the Times Free Press, Andy previously headed up state Capitol coverage for The Chattanooga Times, worked as a state Capitol reporter for The Nashville Banner and was a contributor to The Tennessee Journal, among other publications. Andy worked for 17 years at The Chattanooga Times covering police, health care, county government, ...