ADVERTISEMENT
ADVERTISEMENT
Staff file photo / The rundown Wheland Foundry/U.S. Pipe site is seen looking north from Lookout Mountain into the South Broad District in 2018.

Note: This story was updated on Feb. 28 to remove one incorrect description of how sales tax revenue from the project could be used. Two accurate descriptions remain.

A new stadium with the Chattanooga Lookouts as the primary user is pegged at costing $86.5 million, including a donation of some land at the proposed Wheland Foundry/U.S. Pipe site, figures show.

Also, a Nashville developer is planning $150 million in new residential and commercial projects around the proposed stadium if the multiuse facility receives the go sign from officials, according to a document sent to state legislators.

However, some legislators said last week they're hesitant to support a one-time request for $20.8 million from the state or a bill permitting the use of sales tax revenue to help pay off an estimated $63 million in 30-year bonds for construction.

State Sen. Todd Gardenhire, R-Chattanooga, said he still wants to see more information he believes is pertinent to the requests.

"And I'm not moving forward on this bill or this project until I'm satisfied this is in the taxpayers' benefit," he said during a Senate Finance Subcommittee meeting.

House Finance Committee Chairwoman Patsy Hazlewood, R-Signal Mountain, said the state already has invested $35 million in work now underway to remake the Interstate 24 interchanges near the foundry site in the South Broad District.

"I think we were told 'Give us the interchange and the development is going to follow.' So we already gave at the office in my perspective in that regard," she said in an interview. "I think it's a difficult sell for additional stadium dollars, to me."

But state Rep. Yusuf Hakeem, D-Chattanooga, said in a telephone interview he supports the stadium effort.

"I would like to see the project completed, but the reality is, we are going to have to look at the numbers, see what is being asked of the state and if that's doable," he said. "I think it would be a real asset to the community if we can go forward with it."

(READ MORE: Chattanooga mayor seeks $20.8 million in state money for new Lookouts stadium)

STADIUM COST

A proposal from Chattanooga and Hamilton County leaders shows a breakdown of costs and ways to finance the facility.

Public money and tax revenues would pay for nearly two-thirds of the proposed project — not including $7.3 million from the state for environmental cleanup of the area.

The proposal calls for a $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.

With a total estimate for the project of $86.5 million, private sources would pay 35% of the total, city and county estimates show.

City and county officials said the stadium project is transformational to the 141-acre foundry site, which now sits mostly vacant and rundown, and the South Broad District as a whole.

Chattanooga Mayor Tim Kelly and county Mayor Jim Coppinger said in a letter to the legislators the initiative would "revitalize a gateway to our community."

They said that if the site were to hold just a ballpark, they wouldn't have approached the delegation.

"Rather, we believe that as similar projects have done in other communities around the country and as has been projected by an independent economic impact study, a new, multi-use venue on this site will result in tremendous development, create new jobs, attract over a billion dollars in new investments and strengthen the tax base of the city, county and state," they wrote.

Coppinger said in a phone interview that they're "extremely optimistic" about the project.

"It's not just a ballpark," he said. "That excites me the most."

some text
Contributed rendering by city and county / A rendering shows how a new multi-use stadium and nearby development could look in the South Broad District.

Coppinger cited waves of new development around new ballparks where Lookouts owners have interests in Columbia, South Carolina, and Fort Wayne, Indiana.

He said the city council and county commission, which would be expected to vote on parts of the financing plan, are slated to take a bus tour to the Columbia location in March.

"I think we have a better site and more potential to do better than there," the mayor said.

Ellis Smith, director of special projects for Kelly's office, said a long-term return on investment for local workers, small businesses and taxpayers will far surpass the temporary costs of any tax abatements or incentives.

"Chattanooga owes much to public-private partnerships like the Tennessee Aquarium that helped breathe new life into our city decades ago, and this new public-private proposal will transform a blighted site at Chattanooga's western gateway into an economic catalyst that will improve the lives and livelihoods of our residents," he said in an email.

SITE REMEDIATION

As part of the city and county request for $20.8 million in state money, $7.3 million is for environmental remediation of the site.

The Tennessee Department of Environment and Conservation in a Feb. 17 letter to the city and county said it suspects primarily foundry sand and metals, volatile organic compounds and other contaminants exist on the site.

The letter said the department routinely works with parties to successfully redevelop such sites.

"For example, Finley Stadium was constructed on a substantially similar site," the letter said about the University of Tennessee at Chattanooga's home football field in the nearby Southside.

The Nashville developer said in a document to legislators that its $150 million in development is planned on 11 acres of the foundry site, on which its work could start this year and take place over five to seven years.

The development company, which wasn't named and which officials wouldn't identify, said its confidence in South Broad is founded on the interchange work and the stadium.

The developer said that last December it entered into a purchase and sale agreement and an option at the Wheland Foundry Trailhead on the Riverwalk, which passes through the property. The company said it understands the costs of environmental remediation, which are "typical in more urban conditions and are a function of the retail market and not insurmountable."

"Our plan calls for us to bear the costs of remediation as part of our development costs," the developer said.

(READ MORE: Hamilton County mayor 'shocked and disappointed' over reaction to Chattanooga Lookouts stadium funding proposal)

"KILT-RAISING PARTY"

Still, Gardenhire declined to move the bill supporting the stadium request in a committee earlier this month. Gardenhire announced he was not proceeding with the bill until the Lookouts and the city provided him with more information.

"I learned that the lobbying company that represents the city of Chattanooga and the Chattanooga Lookouts Professional Baseball LLC are represented by the same lobbying firm," he said. "And last night I found out that the owner of the [foundry site], Perimeter Properties LLC, is also represented by the same firm."

The Lookouts, Perimeter Properties and the city of Chattanooga are all represented by Bridge Public Affairs. The group was created by Todd Womack, former U.S. Sen. Bob Corker's one-time chief of staff.

"On my mother's side of the family we have a lot of Scottish blood, and I'd like to say I think it's time that everybody involved in this process have an old-fashioned kilt-raising party, and let's just see what everybody's got," Gardenhire said. "And let the information be given to us before we move any further on this situation."

Gardenhire later said officials have told him the developer's name. The senator said that although he is satisfied the developer is credible, he's still is not on board with putting state dollars into the South Broad project.

HARD PRESS

Lookouts investors last year had put a hard press on some members of the delegation in hopes of hitching their wagon to an ultimately successful effort by University of Tennessee president and multimillionaire Randy Boyd to get state support for his proposed relocation of his Sevierville-based Smokies minor league baseball team to Knoxville.

That project also combined a new stadium with a retail and residential development project.

While Boyd didn't get everything he wanted, he ultimately succeeded in receiving approval for legislation that enabled him to use state sales taxes generated within the new stadium for the project. Boyd also won an agreement from Gov. Bill Lee, who defeated Boyd in the 2018 GOP gubernatorial primary, to provide $13.5 million in state funds.

During last year's lobbying effort by the Lookouts, at least one co-owner at the time, John L. Woods of Marietta, Georgia, could be seen outside the Senate Finance Committee meeting where the bill was being heard.

He could be heard aggressively pushing Gardenhire, a panel member, to include the local team's proposed new stadium in the deal.

That didn't happen. Months later, Woods, an East Ridge native, and the Chattanooga-based Southport Capital investment firm he headed were accused in a civil action by the Securities and Exchange Commission of fraud in a massive alleged Ponzi scheme. Woods, who has maintained his innocence, last year sold his minority stake in the Lookouts.

Senate Finance Committee Chairman Bo Watson, R-Hixson, said of the Lookouts stadium effort that he's still doing due diligence in studying the proposal.

"We know what they've given us, we don't know whether that's the right number or not," he said. "And then we have to take into account all the other requests we're getting from Hamilton County as well on what people would like to see funding for."

Some delegation members are open to a request by the East Ridge City Council seeking $13 million in state funds to help Chattanooga Red Wolves soccer club owner Bob Martino with public infrastructure in his planned $200 million development.

(READ MORE: Chattanooga Lookouts expect 'widely different feeling' at AT&T Field for 2022)

"We haven't had a meeting over all these things yet to see what we as a delegation are for or against," Gardenhire said. "Obviously, I'm open for helping the Red Wolves and I know [Rep.] Esther [Helton] is. But we have yet to sit down, and we'll probably do it next week, and all of us present our little wish list and try to consolidate behind a request that we make."

Gardenhire said Martino has already put a lot of funding into his project, something lacking in the Chattanooga proposal.

"Both are entryways into Chattanooga. That's common between them, but the difference is that the Red Wolves guy has already put down a lot of his own money," Gardenhire said. "And the people promoting the stadium haven't put anything in it."

Hazlewood said she's open to allowing the collection of sales tax and not remitting that to the state.

"And I think we're fine with doing that," she said, speaking for herself.

State Rep. Robin Smith, R-Hixson, said the proposal and request brought this year by the Lookouts and Kelly's office has been "a little more in-depth with what specifically the requested funds would be going toward" compared to what was pitched in 2021.

"But overall, based on the presentation that we saw last year, the questions that were asked, and comparing that to the presentation this year and the answers that we've received to the questions that were asked, I can see more vividly how this will be an opportunity for a gateway property into the western edge of the city."

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318. Follow him on Twitter @MikePareTFP.

ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT