A recent study commissioned by the Chattanooga Area Chamber of Commerce estimates that a planned new "community" stadium on the Southside would generate $30.3 million in county and state sales tax revenues over the life of the 30-year bonds.
County Commissioner Tim Boyd, who has been studying the stadium proposal and asking a number of questions, said, "A cumulative 30-year total of $30 million net present value in sales taxes generated by the stadium per the report is not going to pay for the stadium.
"Again I ask, what is the debt service on an $80 million+ stadium, and what guarantees do we have from the Lookouts owners and developers that they will step up to help pay any shortfalls in debt service so the citizens of Hamilton County, and especially the citizens of the city (who would be paying twice), don't have to pay."
Commissioner Boyd noted that the report by Conventions, Sports & Leisure International "interestingly refers to a 'secondary tenant' (a soccer team) as generating one-third of the ticket sales revenue (over $1 million) with one-sixth the attendance. What soccer team are they referring? My guess it is not the Red Wolves." CFC currently plays at Finley Stadium.
The report says of total sales tax revenues estimated to be generated from ticket sales, concessions, and merchandise at the proposed stadium for all events that in year one there is estimated to be $13.4 million of taxable sales (i.e., ticket sales, concessions, merchandise), which generates approximately $302,000 in county sales tax revenues and $738,000 in state sales tax revenues. Overall, over a 30-year period, between county and state sales tax revenues, it is estimated that $49.4 million of cumulative sales tax revenues would be generated."
The report says the current Lookouts stadium on Hawk Hill was poorly built and is not up to the standards of Major League Baseball, which has been trimming the number of minor league affiliates.
It says, "Currently, the ballpark, due to facility age and lack of many modern amenities, as the facility was poorly designed and cheaply built, has been deemed unsuitable for future professional play by Major League Baseball, prompting team ownership and other community stakeholders to explore the potential for the development of a new stadium for the Lookouts . Currently, plans for the new stadium have it being located at the former U.S. Pipe/Wheland Foundry site within the wider South Broad District.
"Following a public study of the entire South Broad District, in addition to the new stadium, it is envisioned that the area will eventually be redeveloped as a live-work-play community asset with over $1 billion in new development, including residential, retail, food and beverage, office, hotel, and parking space .
"Phase I for the larger development project includes the stadium and approximately $150 million in development."
Conventions, Sports & Leisure International said the report "is intended to assist project stakeholders in making informed decisions regarding the new stadium and associated development. The information contained in this report is based on estimates, assumptions, and other information developed from research of the market, knowledge of the sports, entertainment and real estate industries and other factors, including certain information provided by you and others. All information provided to us was not audited or verified and was assumed to be correct. Because procedures were limited, we express no opinion or assurances of any kind on the achievability of any projected information contained herein and this report should not be relied upon for that purpose. Furthermore, there will be differences between projected and actual results. This is because events and circumstances frequently do not occur as expected, and those differences may be material. We have no responsibility to update this report for events and circumstances occurring after the date of this report."
The report says:
• Local constituents noted there is a niche for a mid-size outdoor venue in the greater Chattanooga market. Currently, there is a gap between the University of Chattanooga's Finley Stadium (20,412 capacity), McKenzie Arena (10,995), and Tivoli Theatre (1,762).
• Concert promoters indicated that there is currently little activity in the Chattanooga market due to the lack of a dedicated concert venue, such as an outdoor amphitheater. Without an outdoor amphitheater, there is little competition for a new downtown Stadium to host concerts, however concerts are generally expensive to host in ballparks and promoters are reluctant to do so because of the small profits.
• With over 1,800 non-profit organizations, the Chattanooga market hosts an extensive amount community events. According to local representatives there is great opportunity to host a wide variety of events at the proposed Stadium ranging from fundraisers, gala’s, festivals, picnics, and more.
• In terms of youth sports, Chattanooga is one of the largest markets for softball in the country. Tournaments of over 500 teams are held in the Chattanooga market, and local representatives are attempting to start a professional softball team in the city. Currently, opening ceremonies and large exhibition games are held at Frost Stadium but the venue will soon become too small for opening ceremonies giving a new stadium great potential to host opening ceremonies, championship games, and exhibition games for large tournaments.
• The city of Chattanooga indicated that a new stadium would present a great opportunity to host NCAA postseason baseball conference tournaments. The city has hosted the Gulf South tournament in the past but did not have a large enough facility to accommodate an event such as the SEC tournament.
• All local representatives expressed the importance of the venue to be flexible in nature in order to host a wide variety of events. Key components in flexibility could include a turf field (depending on tenant preferences), ample ancillary space, extra visiting locker rooms, direct access to the field for loading trucks through a gate in the outfield, and additional support structure under a stage. • Softball representatives indicated that the baseball field will need to be able to be sized down in order to host softball exhibition and championship games. Sizing down the baseball field will require the removal of the pitcher’s mound and the installation of a temporary outfield fence.
• Concert promoters indicated that a ballpark would need to have a capacity for concerts of at least 12,000 in order to be a viable venue. In order to reach a concert capacity promoters indicated the ballpark capacity can typically double by utilizing the field for seating.
The 55-page study is dated May 3, 2022.
Commissioner Boyd said a similar stadium in Knoxville "is on hold due to continuous price increases. The original cost estimate was $65 million when the Knoxville City Council and Knox County Commissioners voted to back the project. Now the cost is estimated to be somewhere north of $90 million."
He said, "The commissioners were not made aware of this (Chamber) study during our private meeting about the stadium a few weeks ago." He said he first was able to get a copy of the study on Sunday.
He said of the project, "There are too many questions and too few answers.
"For example, who receives the revenue off advertisements at the stadium and naming of the stadium...city and county or Jason Freier (Lookouts managing owner)?
"It must be assumed those pushing this ball stadium don't want the public to know 'the whole truth and nothing but the truth.'
"As a fiduciary of the public's tax dollars, I will keep digging into the numbers in order to help get all of the factual information about the ball stadium out to the public."