Public’s Financial Risk for Chattanooga Lookouts Stadium Evaluated
On June 5, discussions were held to estimate the public’s financial risk should the funding to construct the proposed new Chattanooga Lookouts stadium fall short. This proposed Chattanooga Lookouts Stadium is primed to replace the current AT&T Field and is included in the broader development project dubbed the Foundries District.
Attorney Mark Mamantov, who is currently advising the city-county sports authority, presented details regarding the development agreement for the ballpark project. He informed that the county’s risk is half of the debt service on the $80 million in bonds expected to be sold to help finance the stadium. The $80 million constitutes the majority of the funding for the $115 million stadium, to be paid back mostly by new city and county tax revenue generated by stadium development.
Impact on Public Funding
Concerned about the potential monetary implications for the public, Commissioner Lee Helton sought a specific figure on the financial risk. According to Mamantov, the worst-case scenario is estimated to be $1 million for the first year, decreasing to $50,000 by the seventh year. This information is derived from an in-depth study conducted to estimate potential shortfalls.
County Chief Financial Officer Lee Brouner noted that the county could employ various funding sources — excluding property taxes — to cover its share of a potential shortfall. The option to use county hotel-motel tax revenue to mitigate a potential monetary gap was also considered.
Additional Revenue and Investments
Moreover, the Chattanooga Lookouts are projected to pay a yearly rent of $1 million, and a special sales tax allocation on sales at the stadium is also expected to contribute to debt servicing.
The encompassed Foundries District project includes the development of more than a 100 acres of land at the former U.S. Pipe/Wheland Foundry site in the South Broad District. The agreement between the sports authority and the foundry site owner dictates that new mixed-use buildings be first in the line of construction, followed by apartments and offices developed by Atlanta-based New City Properties.
As per the agreement, the owner of the foundry site must initiate construction, redevelopment, or renovation of 690,000 square feet of space within five years of the stadium’s completion. Alternatively, at least 25% of the foundry site should be sold to unrelated developers or allocated for public roads or parks within a year of the purchase.
Great Expectations for the future
Expectations are high for this monumental construction project, with a groundbreaking event anticipated in late June or early July. Despite tentative plans for the Lookouts to commence play in the new stadium by 2025, it appears more likely that 2026 will see the first pitch.
In addition to the sale of bonds to fund the stadium, a $26 million private loan will be obtained by the team and landowner, to be paid back with new city property tax revenue. Hamilton County officials remain optimistic, expecting that about $1 billion of housing, office, and other commercial development could be attracted on the foundry property and several hundred acres nearby.
