KNOXVILLE, Tenn. — The downtown stadium will cost nearly $114 million, $14 million more than previously expected, and entrepreneur and baseball team owner Randy Boyd is covering the difference in cost, Boyd, the city and county announced Monday morning.
The announcement had been widely expected and precedes the city-county sports authority's meeting Tuesday morning, the first in months.
The financial obligations of the city of Knoxville and Knox County will remain the same with no increase for either side, Tuesday's announcement states. Their governing bodies already have blessed the project, with minor opposition.
The 7,000-seat stadium is envisioned to house Boyd's Tennessee Smokies, soccer, concerts and many other public events. It's expected to open in 2025.
Site work is underway east of the James White Parkway in the Old City near Jackson Avenue.
Word about a groundbreaking is expected this spring, according to Monday's announcement.
Cost of the project has grown ever since it was announced several years ago, driven in part by rising construction material expenses.
A target budget of about $65 million steadily grew until last year, when authorities projected a $100 million tab with Boyd agreeing to front perhaps another $20 million in possible overruns in the form of a loan that he'd recover through an expanded tax increment financing district around the structure.
As of 2022, estimates were that the city and the county would spend no more than $800,000 apiece per year. That could change because of rising interest rates.
Both have pledged not to use property tax revenue to cover their share.
So, for example, Knox County will use tax money raised through the hotel-motel tax to cover its share.
With Monday's announcement, Boyd, the city and county say they feel confident they're looking at a "guaranteed maximum price" of nearly $114 million. They or their representatives have been talking intently in recent days to prepare for Monday's announcement.
The city and county have from the beginning supported a $65 million bond issue for the project. That dollar figure remains the same, Jacobs and Kincannon said Monday.
The sports authority will issue the debt. It'll be recovered in part through sales tax collections inside the stadium and in part from team lease payments of $1 million a year.
The state of Tennessee has also thrown in $13.5 million to help.
“Every proposed construction project from homes to commercial development is more expensive now than last year because of construction costs, interest and inflation; that doesn’t change anything for us, even though the stadium project has also felt those impacts,” Jacobs is quoted as saying in Monday's news release.
Kincannon has been steadfast in saying she supports a downtown stadium but that the city won't go any higher in its support than previously agreed upon and that property taxes won't be used to support it.
The stadium and a companion private development involving Boyd already are heating up surrounding property prices and generating expectations of further private development.
Boyd bought land to build the stadium, including the old Lays plant. The area is largely industrial and has been for the most part overlooked on the Knoxville landscape.
Boyd is committed to ultimately turning the stadium land over to the public. He's building the stadium in what's called a turnkey arrangement, and site work is already underway.
“The public stadium will be the catalyst for hundreds of millions of dollars in new private investment, which will in turn grow our local economy and create jobs,” Kincannon is quoted as saying in the release. “Specifically, this will create new opportunities for wealth-building in East Knoxville. And while the stadium will be a great new public amenity in a part of the city where disinvestment has occurred for far too long, the many new events – professional baseball, soccer, outdoor concerts and much more – will also enhance our quality of life for all of Knoxville.”
Some critics have objected to the project as a waste of money when there are greater needs such as public housing and dollars to help the poor.
In all, Boyd, an entrepreneur who also is president of the University of Tennessee System, is committing more than $30 million to the stadium.
If the guaranteed maximum price goes over $114 million, he'll cover those overruns as well.
The sports authority was created specifically to oversee the stadium project. The panel is set to meet 9 a.m. Tuesday at the city's public works center.
Members will hear about the latest funding plan Tuesday.
Boyd said it won't be long until his team gets to play in a new home. They're currently at Smokies Stadium in Sevier County.
"This is a very exciting time for our community, and we are happy to be collaborating with the leaders of our city and county to make this important project a reality,” Boyd is quoted as saying in the prepared release.
"We are looking forward to 2025 when we will be playing Smokies baseball and hosting many other amazing events at the beautiful new stadium.”
