New Lookouts Stadium could break ground soon, if approved

CHATTANOOGA, Tenn. (WDEF) – The final piece of the South Broad Stadium puzzle appears to be heading for a vote. If all goes as planned, Chattanooga could soon see a groundbreaking for the project. 

The new financial agreement of the South Broad Stadium, or new future Lookouts stadium, has been in development for months.

Commissioners, however, voiced one key concern before giving their final approval.

“What is Hamilton County’s greatest exposure to loss?” asked Commissioner Warren Mackey.

They now wonder how much the county would be responsible for if the project did not deliver its projected revenue.

“My best recollection is that it started at a million dollars and was down to $50,000 by the seventh year,” said bond lawyer Mark Mamantov, who represents developers through this process. 

“Just a million dollars?” Commissioner Lee Helton then clarified.

Mamantov responded, “In my professional judgment, that’s the worst-case scenario.”

New renderings of the South Broad District.

The plan presented Wednesday to commissioners is also the same presented Tuesday evening to the Chattanooga City Council.

If passed, the project would operate on a $115 million budget, up from the initial $79.5 million dollar budget in 2022. Developers then cited inflation as the cause of the price increase.

Here is a list of those funding the project, according to developers:

• $80 million from bonds issued from the Sports Authority.
• $26 million from tax notes and revenues from the city’s portion of South Broad District tax revenue.
• $1 million from interest of bonds until disbursed.
• $3 million from Lookouts.
• $5 million in additional debt from Sports Authority.

Additionally, here’s how developers say this $115 million budget will be paid off:

• Special sales tax (6.1125%) for all stadium transactions.
• Rent of $1 million for the Lookouts.
• Tax revenue allocated to the Industrial Development Board and Sports Authority based on existing interlocal agreements.
• City of Chattanooga property taxes for debt service and Hamilton County property taxes for debt service; schools not eligible to be used on the bonds.

In terms of what has changed, two key points emerged.

First, county tax revenues would pay half of the $80 million dollar bond agreed to back in 2022. (City tax revenues are responsible for the other half.) They would not pay the additional cost incurred since. 

Second, the Sports Authority accrued an additional $5 million in debt. That must be paid off by city tax revenues and hotel/motel taxes. It also would not come from county tax revenues. 

Several commissioners seemed satisfied with this arrangement.

“If there is a shortfall … we have an opportunity to cover that shortfall and not use their money, taxpayer’s money,” said Commissioner Joe Graham. “We can actually use a hotel-motel tax paid for by the tourists.”

Furthermore, here are additional obligations for developers:

• Requires New City Properties (main developer) to purchase land adjacent to stadium and establish a schedule.
• Perimeter Properties (site owner) has to pay for all infrastructure development needed, except for some city projects adjacent to the property.
• Perimeter Properties has to meet targets within five to eight years to meet certain requirements for the amount of square footage built.
• If development targets are missed, a portion to all tax revenues may be withheld until they are met.
• If the development targets are never met, the Industrial Development Board may repurchase the property at a reduced rate.

The County Commission and the Chattanooga City Council plan to vote on this plan next week.

If they approve it, we could see groundbreaking of the South Broad Stadium within a month, pending further approval by the Sports Authority.