Chattanooga Lookouts baseball stadium sales-tax funding provision moving in Tennessee House

NASHVILLE - A bill began moving Tuesday in the Tennessee legislature to allow Chattanooga to keep a portion of state sales tax revenues generated within a proposed new Lookouts stadium to help fund bonds for constructing the minor league baseball park.

But legislators from Hamilton County said they remain opposed to providing another $13.5 million in cash to construct the new stadium, which Chattanooga Mayor Tim Kelly and owners of the Class AA team have sought for the overall project, which has been pegged at $86.5 million, including a donation of some land at the proposed Wheland Foundry/U.S. Pipe site.

House Finance Committee Chairwoman Patsy Hazlewood, R-Signal Mountain, moved the bill through the panel's subcommittee on Tuesday. A fiscal note states it is expected to raise more than $110,000 annually, although a Hazlewood amendment attached to the bill appears to decrease that amount with some sales tax revenue continuing to go to Hamilton County for K-12 education.

"This bill would basically do for the Chattanooga Lookouts similar to what we did for the Knoxville Smokies last year," Hazlewood told subcommittee members. "If and when the Lookouts stadium is built, then this would allow the Lookouts to keep the sales tax from within the stadium.

"This allows the county to keep that education portion which we probably should have done in Knoxville but didn't," she said.

Keeping the funding for education makes the legislation better, the chairwoman said. The bill was approved on a House vote.

Ellis Smith, director of special projects for Chattanooga Mayor Tim Kelly, said in a statement to the Times Free Press Press that "we continue to monitor several economic development priorities under consideration by our delegation."

Earlier, Sen. Todd Gardenhire, R-Chattanooga, the bill's Senate sponsor, said during an interview in his legislative office the bill will pass.

While the bill earlier received a "negative recommendation" from the Senate Finance subcommittee, Gardenhire said anything dealing with taxes that costs the state has to have an initial negative recommendation, which can change to a positive recommendation in full committee.

"The burden is on the city mayor and county mayor because, remember, this is for a sports authority that the Lookouts just happen to be leasing from the city and the county partnership," Gardenhire said. "So now, it's up to the city and the county to step up to the plate - no pun intended - and see how much money they're going to put into the sports authority.

So far, Gardenhire said, neither mayor has done that.

"I was surprised to read in the Times Free Press the story on the county mayor's debate and the commission chairwoman [Sabrena Smedley, a mayoral candidate] said she didn't have enough information about the stadium," Gardenhire said. "And if she doesn't have enough information, I question whether or not this project will be funded."

Public money and tax revenues would pay for nearly two-thirds of the proposed project - not including another $7.3 million from the state for environmental cleanup of the area, according to a Kelly administration outline of funding.

The proposal calls for the $13.5 million state contribution toward the stadium project itself. In addition, the proposal calls for the use of state and local sales tax revenue totaling $15.6 million, incremental property tax revenue of $19.4 million from anticipated adjoining development and non-property tax revenue from the city and county of $8.4 million in a 50/50 split, figures show.

Meanwhile, private money includes lease payments by the minor league baseball team of $19.6 million and $10 million in contributed foundry land.

Contact Andy Sher at [email protected] or 615-255-0550. Follow him on Twitter @AndySher1.