Kelly Says Don't Let Stadium Opportunity Pass; Wamp Cautious Due To Funding Change

Mayor Tim Kelly told a joint meeting of the City Council and County Commission on Thursday night to push forward with the Southside Stadium, while County Mayor Weston Wamp recommended caution, saying the funding had drastically changed.

Mayor Kelly said city officials had "worked our butts off" to get to this point on the project at the Wheland/U.S. Pipe site, that was touted as a catalyst for a development that might exceed $2 billion.

He said the project will bring over $100 million to the county schools. The school portion will not go into the TIF.

Mayor Kelly said, "It's about vision. It's about leadership, and it's about partnership."

The mayor said, "No one alive can remember an era of prosperity in Chattanooga. This is an opportunity we miss at our peril. We have never had a developer with such experience and such respect. If we let this slide, what does that say to the world? Let's not miss this moment."

County Mayor Wamp said the revelation that the project cost rose from $79.5 million to $120 million, with a private loan inserted that must be backed by tax proceeds from a Tax Increment Financing District (TIF), should bring close scrutiny by city and county officials.

He said the proposal from August 2022 was touted as only needing $350 million in development to cover the costs. He and County Finance Director Lee Brouner said under the new scenario there must be $1 billion in development.

Mr. Brouner said under the original proposal it was planned to issue $72 million in bonds, but the plan now is to issue a full $80 million, which he said would add substantially to interest costs. Debt service will be $5.5 million per year over a 30-year term.

The county had released figures Wednesday on concern about the spike in costs. During the joint meeting at the Chamber of Commerce, County Commissioner Chip Baker asked County Mayor Wamp to come forward to elaborate his concerns. He and Mr. Brouner did so.

Later in the meeting, County Commissioner David Sharpe said, "(County) Mayor, stop politicking. What specific about this do you not like?"

County Mayor Wamp and Mr. Brouner then spoke again about their reservations.

Near the end of the two and a half hour session, Mayor Kelly came forward to give a rousing endorsement of the venture.

County Commission Chairman Jeff Eversole, who called the meeting, said it is a decision "not for now, but for future decades."

Master Developer Jim Irwin outlined similar projects involving taking iconic rundown buildings and bringing them to life with millions in investment at Atlanta and Nashville.

He said the foundry site is a huge tract in a stunning setting with dramatic possibilities, and he said it would put "tens of thousands" of people to work.

Mr. Irwin said there are substantial contingencies built in to the bond issue, and he said initial pricing on stadium components has been less than projected.

Officials said on the $40 million gap that the Lookouts will secure a $25 million bank loan and the property owner, Perimeter Properties, will put up the remaining $15 million.

The Lookouts loan will involve five local banks led by First Bank, it was stated.

Officials said there would be no gain to the borrowers, but they would get back from TIF collections exactly the amount they put in, plus the exact interest they had to pay.

The City Council and County Commission must approve the new setup and it will go to the Sports Authority, which is to be the legal owner of the stadium.

Officials said the process of issuing the bonds might take 12 weeks.

Mr. Irwin, who presented many renditions of how the development and stadium will look, said, "We're on the five yard line" almost ready to start construction once all approvals are given.

City Councilman Chip Henderson recommended that the loan go through the Industrial Development Board rather than the Sports Authority so that the debt limit for the latter group will not have to be raised.

Officials said they did not believe the AAA bond ratings of the city and county would be affected by participating in the project - even though the county is planning a very large bond issue for schools soon.

County Commissioner Lee Helton asked if there would be more requests for help in case of brownfield or infrastructure issues or other unforeseen circumstances.

Mr. Irwin pledged, "We will not be coming back for any more money."

The meeting opened with Fort Wayne, Ind., Mayor Tom Henry on a Zoom call telling how his city was "very much part of the Rust Belt" with a blighted downtown. He said the city worked with Mr. Irwin and with Lookouts owners Hard Ball Capital in building a stadium downtown.

He said it has helped bring new life to Fort Wayne with $1.5 billion in development around the Minor League stadium.

"It was a phenomenal investment for us," he said.

Property owner Gary Chazen said his group acquired Wheland Foundry in 2001 and U.S. Pipe in 2006. He said the group searched many years for a developer like Jim Irwin.

He said this is "a once in a lifetime opportunity that will add billions of dollars to our economy" and clean up a long-blighted entryway into Chattanooga.

Mr. Chazen said his group is donating over 21 acres worth "north of $20 million" for the stadium project.

He said the city was being asked to provide $10 million in infrastructure around the stadium, then the development group would furnish up to $15 million in additional infrastructure.

Mr. Chazen said, "Guys, we've got skin in the game."