City, county disagree on impact of South Broad price increase

CHATTANOOGA, Tenn. (WDEF) – First pitch at the new South Broad Stadium is supposed to be in April of next year.

However, that and the price of the South Broad Project, is changing to the disagreement between Chattanooga city and Hamilton County officials.

The master developer of the South Broad project for New City Properties, Jim Irwin said, “We are in the midst of probably the greatest construction cost escalation environment in my lifetime.”

Irwin says the price of the South Broad project from $80 million to $120 million.

A rendering of the new South Broad Stadium. (Courtesy: South Broad Project)

However, he says that burden won’t be felt by the taxpayers.

Irwin said, “The private sector is stepping up to cover 100 percent of that escalation. So, there will be zero additional dollars asked from the city or the county for the completion of the stadium.”

Irwin and fellow developers issued the following reasons on why the cost is going up:

• “Inflation has caused the estimated cost of the South Broad mixed-use stadium to rise from $80M to $120M. To ensure the City and County do not need to come up with an extra $40M, the landowners and the Lookouts will assume this extra burden and will be repaid only after the City and County have paid off their $80M bond.”

• “From the public/taxpayer standpoint, the deal has not significantly changed since it was overwhelmingly approved by the City Council and County Commission in August of 2022 because the private sector is shouldering the burden and risk of the increased construction cost.”

• “If anything, the deal has gotten sweeter for the City and County since 2022 because the landowner and the Lookouts now have 40 million reasons to get the public’s $80M bond repaid quickly and completely.”

City officials say this rise in cost was not surprising as other cities such as Knoxville have experienced a similar price increase for current stadium projects.

The Chief of Staff for Chattanooga Mayor Tim Kelly’s office, Jermaine Freeman said, “They saw an initial approval of bonds for a stadium that they priced to be $65 million, and they got to a final price of $115 million.”

However, the proposition that the project has not changed is not agreed upon by all leaders.

Hamilton County Mayor Weston Wamp sent us a statement saying:

“To say the stadium deal has not changed for taxpayers is inaccurate.

For starters, repayment of a $40 million loan from the developers will require an additional $100 million of tax dollars towards the project over the next 30 years at current interest rates. Furthermore, faulty financial models used in the summer of 2022 and higher interest rates have led to a projected $15 million debt service shortfall that city and county taxpayers will be on the hook for in the coming years.

In order to move forward as partners in the weeks ahead, the developers and team owners need to be honest with taxpayers. The initial assumptions and projections that led to the approval of the project were off by many months and $50 million.

The deal has certainly changed, the stadium is dramatically more expensive, and infrastructure costs on the Wheland site are largely unknown.”

As for projected Opening Day of the South Broad Stadium of April 2025, Freeman says that will likely be delayed.

Freeman said, “Right now we are looking at the ballpark being ready right around June of 2025 so right now there’s roughly about a two, two and a half month delay.”

Freeman also said despite the various issues with this project, the city is still optimistic about its impact on Chattanooga and ability to be profitable.

The Chattanooga Chamber of Commerce will be holding a public meeting with an update on this project on Thursday in which Freeman told us to expect to see the final master plan.

Irwin and developers are shared that the public can expect:

• “The results of an independent economic impact analysis (performed by Younger & Associates, the same firm that did the EIA for The Bend project) will also be shared later this week. This report is a way for an independent, third-party team of experts to weigh in on the magnitude of the return the public is likely to see on its investment in the stadium.”
• “The Younger study will also conservatively forecast the amount of new tax revenue that will be generated for City and County schools, roads, and other public services.”
• “Construction is ready to begin immediately once the City Council and County Commission vote later this month (exact dates TBD) to accept the private sector’s help in financing the project.”