'Negative recommendation' slapped on proposed state funding for new Chattanooga Lookouts' stadium

Mar. 16—NASHVILLE — A proposed new baseball stadium for the Chattanooga Lookouts with accompanying development was thrown a curveball in a key state Senate panel Tuesday.

Members approved a motion from Sen. Todd Gardenhire, R-Chattanooga, that slaps a "negative" recommendation on his own bill to allow local officials to keep a portion of state sales taxes to help pay off anticipated bonds for the stadium.

"I would recommend we would do this in order to have further discussion on whether or not to have a baseball stadium financed partially by the state in Hamilton County," Gardenhire told Senate Finance Revenue Subcommittee members as he made the motion on the bill he sponsored that deals with the sales tax issue. "I would recommend a negative recommendation."

All five panel members, including Senate Finance Committee chair Bo Watson, R-Hixson, voted for the negative recommendation.

That doesn't mean the bill is dead — it can be changed to a positive recommendation later. But it would require the support of Hamilton County legislators with at least some of them remaining skeptical of aspects of the project.

The lawmakers note the project has already received a $35 million assist from the state in the form of a new interstate interchange in the South Broad District where the stadium, commercial and residential development are expected to go.

Besides the sales tax revenue, projected to provide local officials $110,000 in annual revenue to pay off bonds needed to do the project, Chattanooga Mayor Tim Kelly is seeking another $20.8 million in state money for the new multi-use stadium that the Chattanooga Lookouts minor league baseball team would primarily use.

In a previous letter to Gov. Bill Lee, Kelly said he is seeking $13.5 million for the new stadium with another $7.3 million of the funds for environmental cleanup for the proposed site, which sits within the former U.S. Pipe/Wheland Foundry tract in the city's South Broad District.

Some local legislators have been questioning aspects of the project all along.

Gardenhire later told the Times Free Press his motion allows the bill to stay alive for a while.

"Technically, I don't know where it stands because I keep asking for — just put a complete plan on the table," he said. "Who's going to do what?

Ellis Smith, director of special projects for Kelly, said the mayor remains optimistic about the proposed sales tax legislation.

"The process is moving forward," Smith said. "We're confident working with the local delegation that we'll be able to get this done."

Smith said the mayor's office has and will share any information the delegation needs. He said the stadium isn't just about the Chattanooga Lookouts. The facility could serve as a catalyst for more than $1 billion in development, he said.

Kelly has said the Lookouts are in need of a new facility to replace AT&T Field and remain in compliance with Major League Baseball standards. The Lookouts avoided contraction when the number of minor league teams were reduced at the start of the 2021 season.

Efforts to reach Hamilton County Mayor Jim Coppinger were unsuccessful. So were attempts to reach Watson.

Gardenhire said he has asked both mayors how much money the city and county are putting into the stadium project. It also has a separate aspect in which a Nashville developer has said he is willing to put up $150 million. The total site is 141 acres.

"When I asked the mayors in the past who really wants this, and by the way I want a stadium, I think it's great, I'm not against a stadium," Gardenhire said. "I make that point very strong. But when I asked the two mayors in the past how much money you're going to put into it, I can't get an answer. Everybody wants us to put money into it."

Last month, city and county officials did say they were each putting $4.2 million into the project.

House Finance Committee chair Patsy Hazlewood, R-Signal Mountain, said in a Tuesday evening phone interview there are some aspects of the project that most members of the delegation would be agreeable to, such as the use of sales tax revenues within the new multi-use stadium to pay off bonds.

"But again, I still think we're just gathering information and thinking about what we could possibly do," Hazlewood said. "I don't think the large $13.5 million package, I don't see that being on the table for this session. But things can change, as you know. There are a lot of moving parts around here."

Hazlewood said she, too, has questions, among them the city and county's stated $8.4 million commitment to the project.

"Again, that's been a point of conversation as to whether those were hard cash dollars or some kind of tax rebates, what form that would take," Hazlewood said. "I think there are maybe some questions in some people's minds about some of that. Again, at this point, discussions are ongoing. But again, I think the outlook isn't too rosy for the full package that's been requested at this point."

Gardenhire's bill and other proposed spending bills are expected to come up when the full Senate Finance Committee meets. Hazlewood is carrying the House companion bill.

Rep. Greg Vital, R-Georgetown, said he and other delegation members are still trying to understand all the components involved in the effort.

"It's come in pieces, it's been reported in pieces," he said. "I'm not quite sure what we're being asked to fund, who owns what, who's going to own what. And so we're trying to work that out, trying to understand that and how it fits into the other priorities."

Vital said there's a lot of development in the South Broad area that's already occurring on its own.

"I just think we have to decide on top of what the state and the feds have spent on the new exit — a lot of that's federal money — but the state could have allocated that somewhere else," he said.

Rep. Esther Helton, R-East Ridge, agreed more information is needed and like others cited the cost of the interchange. Helton noted the project isn't in her district, and she's more focused on getting a $13 million state grant for the Chattanooga Red Wolves Soccer Club, whose owner is investing $125 million in an East Ridge stadium and mixed-use development.

Staff Writer Mike Pare contributed to this story.

Contact Andy Sher at asher@timesfreepress.com or 615-255-0550. Follow him on Twitter @AndySher1.