Inflation taketh away, but it also can giveth.
The first part of the phrase summed up the reasoning of Hamilton County Mayor Weston Wamp on the news last week that the construction of the Tennessee Smokies' minor league baseball park in Knoxville has increased significantly in price, but the second part seemed to be the intimation of other officials on the potential development around the planned Lookouts' minor league park on the former U.S. Pipe/Wheland Foundry site here.
At least, that's the way we see it.
On the one hand, it seems almost impossible to imagine that the local stadium with a 2022 estimated price tag of $79.5 million wouldn't increase in price once construction starts. The cost of Knoxville's park, already underway, is up $14 million from a year ago.
It's a point mayoral candidate Wamp made in July 2022.
"Rising interest rates and unpredictable costs of construction continue to pose challenges for their stadium," he said of Knoxville, "and we will encounter the same issues."
Undaunted, then-city of Chattanooga chief financial officer Brent Goldberg said at a September meeting of the city-county Sports Authority, "We're not coming back for $82 million or $84 million."
Still fearing inflation, the now-Mayor Wamp said in December, "I think you're probably going to see a massive change in the scope of the project."
On Tuesday, he said, "all signs point to a stadium here going tens of millions of dollars over budget just like the one in Knoxville is, and we don't have a champion like [Smokies owner] Randy Boyd who will cover the overages."
Where the Smokies were able to count on significant money from the state and an owner who has pledged to cover construction cost increases, the Lookouts don't have either. And there has been no public discussion about money coming from the state this year, an idea that then-county and city officials thought was plausible a year ago.
Chattanooga Mayor Tim Kelly, though, looked at the down-the-road payoff of development around the stadium and how inflation might be friend rather than foe.
Property tax revenue from private development around the stadium is slated to pay off 58% of the debt for the project, but the city mayor believes revenue could soar above amounts once hoped for.
"There was some anxiety about how much development can we count on," Kelly told this newspaper. "Well, I think it's safe to say we're going to blow the doors off the early estimates anyway. The percentage of that that we dedicate to the stadium, we want that to be as little as possible for the taxpayer's interest. But if it weren't for the stadium, there wouldn't be the development."
While inflation will increase the cost of construction of the park and the development around it, it also is likely to increase the taxable value of the property.
That's because the little talked about problem with inflation -- especially by members of the Biden administration -- is that inflation itself may come down (and has a little), but prices don't fall commensurately.
But don't take our word for it.
"When people say inflation is easing," a 2022 CNN Business article concluded, "they don't mean that groceries are getting cheaper. They mean that they're not going up as much each month. It's very rare to enter a deflationary period, and the government likes to avoid it if possible as it usually indicates that the economy is cooling way too rapidly."
"Consumers won't feel immediate relief even as the inflation rate slows because many of those elevated prices are likely here to stay," Michael Ashton, managing principal at Enduring Investments in Morristown, New Jersey, said in a 2022 USA Today article. "The price level has permanently changed."
"When those problems get resolved," Marketplace wrote in 2022 of supply chain, shipping or pandemic problems, which have been said to have been some of the causes of inflation, "will prices come back down? The answer is ... no. For most things -- like meals at restaurants, clothes, or a new washer and dryer -- prices are not going to come back down."
Given that reality, and what it will mean for the private development surrounding the stadium, Kelly said this:
"We are feeling increasingly comfortable that the project as a whole will comfortably foot the bill for the stadium," he said. "That being said, we are also trying to be as good of stewards of taxpayer dollars as possible and stick to our original commitment."
If we're to look ahead in our crystal ball, then, we are likely to see that Wamp was justified in warning the original stadium price would increase -- as he warned against the project in the first place -- but that the surrounding development down the road not only can pay for the stadium but also help fill local coffers for the government services people already have come to count on.
At least that seems to be the lay of the land in the month before groundbreaking for a new Lookouts stadium is scheduled (though may not happen until a little later).