Taxpayers are in strong position to demand a better deal from the Chattanooga Lookouts and landowners as the team eyes a new multiuse baseball stadium in the South Broad District, Hamilton County Mayor Weston Wamp told more than 100 people during an event Thursday night.
"We believe taxpayers at this juncture have all the leverage," Wamp said during a forum at Calvary Chapel. "The Lookouts aren't going anywhere, but it's a really good negotiating point for them to act like they are. ... It would be an absolute pain and would set the team back years to consider going somewhere else."
With the cost of the new stadium rising from $79.5 million to $129 million, according to county figures, Wamp has been questioning the integrity of the deal and calling for more buy-in from the Lookouts and the landowners, Perimeter Properties. On Thursday, he and his team outlined their concerns about the project and took questions and comments from the audience.
Perimeter Properties and Hardball Capital, the owner of the Lookouts, have offered to take out a $40 million loan to bridge the funding gap, which they would borrow from a consortium of banks. The Hamilton County Commission and the Chattanooga City Council will vote on this proposal in the coming weeks. The city and county would pay back that loan using new property tax revenue generated from development in a 470-acre special tax district around the stadium. No existing property tax revenue would fund construction of the stadium.
"Unfortunately for our community, no one involved in the project or most familiar with its details was invited to answer questions at this event," Perimeter Properties and Hardball Capital said in an emailed statement.
County government is more dependent on property tax revenue than the city, Wamp said, and would feel a more detrimental impact from the tax district. In any given year, the county projects a 2% growth in the property tax base, which is about $4 million. To avoid a tax increase, particularly in county government, officials have to be conservative with that revenue.
"By capturing the growth in property tax revenue in one of our hottest areas — one of the areas most primed for growth — you do put yourself inevitably in a position where a tax increase could happen," Wamp told the crowd.
Commissioner Joe Graham, R-Lookout Valley, represents the area where the stadium would go.
"This is an opportunity, if we can work out the details, to do something very good — not just for Hamilton County, but ladies and gentleman, our side of town," he said about the project. "This part of town is in desperate need of uptick, and it's starting to happen. This is a good catalyst that can do more for us. We just have to, as the mayor said, do it the right way."
If there's a shortfall in revenue for the project, Graham said, he's in favor of using hotel-motel taxes to cover the gap, which are most commonly paid by tourists from out of town.
The county mayor's office also invited former Commissioner Tim Boyd to speak. He was the only member of the Hamilton County Commission and the Chattanooga City Council to vote against the project in August 2022. County leaders have never had greater leverage to develop a better agreement with the Lookouts and Perimeter Properties, he said.
"I'm not here to kill the deal," Boyd said. "I don't want to kill the deal. I just want the best deal for all of us."
The $40 million loan won't be repaid until the tax district is creating enough revenue to fund debt service on an $80 million bond backed by the public. Supporters argue that will incentivize the deal's private partners to spur as much development as possible within the tax district. The land and team owners would charge interest rates identical to what they receive from the banks, they've said, meaning they wouldn't make money on the loan.
Officials intend to cover the majority of the $80 million loan with revenue from the special tax district. The Lookouts will also pay $1 million annually for a 30-year lease on the new building, which would help cover that loan. That rent would increase 1.5% each year until the stadium is repaid, according to the website southbroad.info. In addition to lease payments, the Lookouts will also cover maintenance and operations for 30 years at a cost of $45 million.
Perimeter Properties has previously donated 12 acres of land to extend the Riverwalk and will donate another 9 acres for the stadium. Perimeter is also contributing $15 million of infrastructure for the project.
Boyd said the Lookouts' lease payments need to be higher to match the increased cost of the stadium.
(READ MORE: Hamilton County, Chattanooga leaders more optimistic about Lookouts stadium price jump)
"The price went up 40-50%, your rent just went up 40-50%," Boyd said. "That's business, right? ... If my costs on an estimate went up 50%, you think I'm going to hold my rent like it was? No. Nobody does that."
Boyd also raised issues with the transparency of the process. In March 2022, Boyd said, the commission held a legal meeting, which are typically closed to the public.
"Guess what," Boyd said. "It wasn't a legal meeting. It was a presentation of the ballfield. To me, that was a violation of the Sunshine Law right there straight up."
Ron Linfonte, who lives in East Brainerd, was among the attendees Thursday. He was the trainer for the Lookouts in 1980.
"I know a little bit about working in subpar facilities like we had at Engel Stadium," he said in an interview before the meeting, referring to the facility the Lookouts had before moving to AT&T Field approximately 20 years ago.
"I'm all for us getting a new stadium here in town," Linfonte said.
However, he had questions about how the deal would be financed and the implications if Major League Baseball insists on another facility upgrade.
"I think the biggest problem that the public has is you hear one version of how the stadium will be paid for from the city and the developers and the Lookout owners," he said. "And then you hear another complete different opposite view by the county mayor."
Another attendee, Chip O'Dell, said before the meeting he doesn't mind a new stadium, but he does mind how officials pay for it. The former Wheland Foundry/U.S. Pipe site where the stadium will go has been an eyesore for years. He doesn't like the existing location of the Lookouts stadium because there's not enough free parking.
Ideally, the private sector would pay for the project, he said.
"Chattanooga has been big on doing things with private money," he said. "They can do this, too, if they want it."
Geoffrey Meldahl, the co-chair of the economic mobility task force for the nonprofit CALEB, told attendees the organization is still working hard on developing a community benefits agreement for the project.
Chattanooga Mayor Tim Kelly's office said in a statement none of the Southside project's developers and proponents, nor the city mayor's office, were offered an opportunity to present at the town hall Thursday. They contrasted it with a joint meeting between the City Council and County Commission on Jan. 11, where all parties were present to discuss the project in public.
"This is a one-sided presentation and a missed opportunity to fully inform the public with a presentation of benefits and risks," the statement said in part.
Contact David Floyd at dfloyd@timesfreepress.com or 423-757-6249.