Chattanooga Mayor Tim Kelly is seeking $20.8 million in state money for a new multi-use stadium that the Chattanooga Lookouts minor league baseball team would primarily use.
The mayor, in a letter this month to Gov. Bill Lee, said $7.3 million of the funds would go to environmentally clean up the proposed site on the former U.S. Pipe/Wheland Foundry tract in the city's South Broad District.
"Chattanooga has the opportunity for a transformational community project," he said, adding the stadium could help redevelop the 141-acre site and bring in $1.5 billion in private development.
Also, Kelly in the letter asked the governor's support for legislation related to the use of sales taxes generated at the new stadium. The idea is to use proceeds from the sales tax to pay off bonds, which could be issued to support the project, officials said.
"The city and the county are negotiating to fund a new stadium that will be used by the Lookouts and for many other events throughout the year," the mayor said.
State legislators from Hamilton County said in interviews the funding isn't assured, with one noting support for the stadium project is "a hard sell."
State Sen. Todd Gardenhire, R-Chattanooga, said the state already is putting in $35 million to rebuild Interstate-24 exit ramps near the foundry site.
"How much is enough to move the Lookouts down there?" asked Gardenhire.
The Lookouts play at an aging AT&T Field in downtown's riverfront.
State Sen. Bo Watson, R-Hixson, said there was "really no discussion about the stadium" over the summer or the fall, and then the mayor's letter popped up this month.
While there was discussion during last year's legislative session as Knoxville pursued and ultimately landed state funds for a stadium project, "we'll look at it just like we did last year, but we haven't seen a formal proposal that I'm aware of," Watson said.
Jason Freier, the Lookouts managing owner, said he's hopeful Chattanooga is treated the same as Knoxville, where an estimated $74.5 million facility downtown is to go up for its minor league team. Knoxville received $13.5 million in state money, an amount Kelly requested along with the remediation funds.
Freier said the existing South Broad foundry property, which sits adjacent to the entrance to the city along I-24, is an eyesore.
The stadium coupled with other development "is about creating an attractive and welcome gateway," he said.
Kelly said in a statement that visitors from across the nation approach the city from the southwest and are "blown away" by the natural beauty of Lookout Mountain and the Tennessee River with the exception of the foundry tract.
"For decades now, the former U.S. Pipe and Wheland Foundry sites have been an eyesore and an economic wasteland right at the gateway to our community," he said. "It's like having a great smile, but missing your front teeth."
The stadium project would attract local investment, provide a new home for the Cincinnati Reds affiliate and animate the South Broad neighborhood, the mayor said.
Kelly said the Lookouts are in need of a new facility to replace AT&T Field to stay in compliance with Major League Baseball standards. The Lookouts avoided MLB contraction when the number of minor league teams were reduced to start of the 2021 season.
"The Lookouts expect a significant increase in attendance and tax revenues, nearly 25% of which comes from out-of-state attendees," he said about a new facility.
Helen Burns Sharp, founder of the citizens group Accountability for Taxpayer Money, said it's hoped that the Lookouts and the city will be honest and transparent with taxpayers.
"Typically, the economic impact of sports stadiums on the community is exaggerated," she said in an email. "Much of the new spending is shuffled from somewhere else in town, and the stadium itself has no meaningful impact on permanent job creation.
"If this train stays on the public funding track, I hope there will be a well-crafted community benefits agreement that addresses how the public will benefit, both in the employee and contractor hiring process and in meeting needs in surrounding neighborhoods that are impacted," she said.
Freier said he has built a couple of other stadiums in Columbia, South Carolina, and in Fort Wayne, Indiana, and the facilities have helped spur hundreds of millions of dollars of new development at each site.
"We look at that and say we absolutely can do the same sort of thing in Chattanooga in partnership with the city and county," he said. "We're not first-timers on this."
Freier had no cost estimate for a new facility but said stadiums today are built with a lot of flexibility, social areas and focused on multi-use. The stadiums in South Carolina and Indiana, for example, typically hold about 7,000 people for baseball games but can fit in 9,500 including social gathering areas, he said.
AT&T Field, which the Lookouts lease, holds 6,500 for baseball but has few social areas, Freier said. Also, AT&T Field has a number of issues that would take tens of millions of dollars to comply with MLB requirements, he said.
Freier said architects haven't been hired to start designing a ballpark, but he expects the aesthetics would fit the foundry site and proposed nearby development.
"A place like that has incredible history," he said. "We'd want the ballpark to be very much of the place it would sit."
In Knoxville, a sports authority was formed to issue bonds, the Lookouts official said. If Chattanooga and Hamilton County partnered on such a project, an authority could be the owner of the stadium and issue bonds, he said.
Freier said the Lookouts would pay for "a significant portion" of the project, though there are many ways to structure such a deal.
"We'll be a meaningful partner," he said.
Gardenhire said he believed that, under a sports authority, the Lookouts wouldn't pay property taxes except for schools.
"I don't see the need to continue to give them a lot of tax breaks when they're going to do this anyway," he said. "So it's going to be a pretty steep hurdle to convince me not to give away tax money just to have the baseball stadium move down there."
Watson said that, even if it's in his hometown, he's not going to pay for stuff when there's not a plan.
"The idea that you're just going to come up and ask for money because we have it, that's just not how this conservative legislature does business," he said. "I'll get torn apart by my members on that."
Watson is the Senate Finance Committee chair. He said he hasn't discussed the issue with the governor, to whom the mayor's Jan. 5 letter was addressed.
"Again, let me say, Mayor Kelly's in the first year of his term and whoever is helping him in his relationship with the legislature may not have the experience of how you actually deal with the legislative side and figure that if you immediately go to the executive branch, that's where you get your answers," he said. "And that's not where you get your answers. Am I speaking between the lines clearly?"
Late last year, the Lookouts named 11 new members to its ownership group, all local investors and many of them well known in the city. The new members of the ownership group came as the interest of former minority investor John J. Woods of Marietta, Georgia, was purchased by the Lookouts after accusations by federal regulators last summer that he ran a Ponzi scheme amounting to $110 million.
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