KNOXVILLE, Tenn. — A proposed downtown sports stadium would get a $13.5 million financial boost from the state that negates the need for special legislation to collect sales taxes from a zone around the site.
If the project gets that money, it'll represent about a 20 percent cut in the amount of money that likely will be borrowed to cover stadium construction costs.
Gov. Bill Lee lists the money as a miscellaneous appropriation in his amended budget, released Tuesday. It would go to the Knoxville-Knox County sports authority which will oversee construction of an estimated $65 million stadium east of the Old City and below the James White Parkway.
"This is good news," Knoxville Mayor Indya Kincannon said in a statement to 10News, "It reflects the state's commitment to helping local governments build their communities and create jobs. Upfront cash from the state represents reduced risk and adds more certainty to the project's financing."
Said Knox County Mayor Glenn Jacobs: "At this point we have a good package put together and things should be hopefully rolling forward now."
The Legislature still must pass Lee's overall $42 billion budget. It's usually one of the last things lawmakers do before they adjourn for the spring. It's also mandatory that they adopt the state budget so that it can take effect starting July 1.
The money gives the sports authority an unexpected lift.
City and county staff originally sought special legislation that called for letting the sports authority keep the state's share of sales taxes collected in a quarter-mile area around the project.
State Sen. Becky Duncan Massey, R-Knoxville, and state Rep. Jason Zachary, R-Knoxville, carried the legislation at the start of the session that would have provided for the special sales tax collection zone.
It's just one component of how the project would be paid for. Other elements, for example, include team rent paid by the Tennessee Smokies, which would move from Sevier County to play games downtown.
Entrepreneur and education leader Randy Boyd wants his team to play baseball at the stadium as soon as spring 2023. Much has to be done to achieve that goal, however, including approving development plans and confirming and arranging the funding.
Bonds would be issued to cover the costs, with revenue collections in the future going to pay off the debt over perhaps 30 years.
The special legislation first pitched by Massey and Zachary has been making its way through committees. Last week it was up for discussion before the Senate Finance Committee.
Chair Bo Watson and state Commissioner of Finance and Administration Butch Eley both raised questions about the funding tool as proposed.
What's emerged over the last week or so, after behind-the-scenes talks, is a fresh approach that looks at how all such projects could be built in the future following policy guidelines, Massey said. Also, Lee is now making a $13.5 million contribution.
The senator said she worked much of April 9-10 on defining the policy agreement that other groups can follow in the future involving projects with a public sales tax element. She credited Zachary, Knoxville Mayor Indya Kincannon, Jacobs and Watson among others with contributing to the discussion.
"I think we’ve gotten to a good policy. And, as I said, we had as far as the agreement -- the city, the county and the House and the Senate have all come to an agreement on that," she said. "It took a lot of back and forth."
There's still a bill in play that would allow the stadium project to capture the state's share of sales tax on goods and food sold within the confines of the building. Lawmakers will have to adopt that, and it's also a key component in covering construction and financing costs.
The downtown stadium project still has many hurdles itself.
For example, Knox County Commission and the Knoxville City Council have blessed the creation of a sports authority for the project. But people still must be formally appointed to the seven-member group.
The governing bodies also must approve any development plan for the area.
While the sports authority would build the multi-use stadium, Boyd has assembled a group of investors with plans for some $140 million in private development around it.
That would include housing, which Boyd wants to go up simultaneous to the stadium construction.
Besides baseball games, the stadium is envisioned to host concerts, other athletic events, even private group events such as meetings and reunions.
Boyd also wants to see citizens using the space for leisure and recreation. He's also pledged to help boost those who live in the neighborhoods bordering the site as a economic development tool.