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Inflation, Building Costs Come Into Play for New Chattanooga Lookouts Ballpark

Wed December 28, 2022 - Southeast Edition #1
Chattanooga Times Free Press


The new Lookouts' stadium will be a 'multi-use stadium' meaning it could be used for concerts, community events, and a number of other things during the minor league baseball off season. (Rendering courtesy of South Broad Chattanooga)
The new Lookouts' stadium will be a 'multi-use stadium' meaning it could be used for concerts, community events, and a number of other things during the minor league baseball off season. (Rendering courtesy of South Broad Chattanooga)

With bids for a replacement of the Tyner Academy, a magnet high school in Chattanooga, soaring over early estimates, some city officials are wondering what high inflation and construction costs may mean for the planned Chattanooga Lookouts baseball stadium.

The Chattanooga Times Free Press reported Dec. 17 that planners for the new Lookouts ballpark in the South Broad District of the city said they will engineer the stadium to fit the budget and manage costs, potentially leaving some non-essential parts for later as they eye work to start in the first half of 2023.

Ellis Smith, director of special projects for Chattanooga Mayor Tim Kelly, said in an email to the newspaper that even though the stadium is still in the early planning stages, there is a commitment to do "value engineering" as needed to meet the budget.

"Stadiums can be constructed in an extremely modular manner, and if costs increase beyond what is anticipated, engineers will be able to hold back on completing certain potential components, such as a beer garden or [a] kid zone, until new revenues come in to support those plans," he explained.

Also, the city has indicated that if private developers interested in building projects around the stadium want to contribute money for construction, they can do so, according to the Chattanooga news source.

While the number of seats has not yet been set, a similar stadium operated by Lookouts' ownership in Columbia, S.C., can hold 9,000 people. When it opened in 2016, that ballpark offered upgrades to fans in terms of seating with locations in the outfield, as well as food service and a team store, according to the Lookouts.

Stadium's Scope Could Undergo ‘Massive' Change

Hamilton County Mayor Weston Wamp said in early December that he does not think the planned stadium in Chattanooga can be built for the estimated construction budget of $72 million.

"I think you're probably going to see a massive change in the scope of the project," Wamp told the Times Free Press. "But a stadium is not a school, and you can value engineer this project in a way that we are not willing to do at a public school."

In November 2021, the Tyner Academy project was estimated to cost $68 million. Once the breadth of that construction was decided and market conditions were reassessed in February 2022, the building costs had increased to nearly $78 million.

But the lowest bid recently came in at $96 million from Christman Co. in Knoxville. School board members have attributed the increase to inflation and the rising costs of construction materials.

The Times Free Press reported that Wamp promised to fully fund the proposed bid for Tyner, noting the county can re-prioritize other projects to cover the extra costs.

Concerning the multiuse stadium, Wamp said he is working with Kelly and others to move the stadium project forward even though he was a skeptic of the facility, noting that he is wary about the merits of governmental subsidies or tax breaks for ballparks. In addition, Wamp worries inflationary construction costs would increase the price of building the stadium and force either more government costs or a reduced plan for the facility.

Old Foundry Site Chosen as New Site for Ballpark

Earlier this fall, Chattanooga's then-chief financial officer Brent Goldberg said plans were formed to issue no more than $80 million in bonds for the stadium on the old U.S. Pipe/Wheland Foundry tract even if costs rise due to interest rates or other expenses. That figure includes construction along with $7.5 million for capitalized interest plus the cost of issuing the bonds, the Chattanooga news source reported.

"We're not coming back for $82 million or $84 million," said Goldberg at a meeting of the city-county Sports Authority panel in September (He has since left as CFO to take a similar post at the University of Tennessee at Chattanooga).

Smith said the foundry site is larger, flatter and more flexible than the current landlocked AT&T Field in downtown Chattanooga where the Lookouts now play. That will allow capital expansions and improvements far into the future to support anticipated growth and demand for enhanced amenities, he said.

Jim Irwin, the president of Atlanta-based New City Properties, hired as the foundry site's primary developer, said planners will have a process of early pricing on whatever ideas they have about the stadium.

"We're going to do everything to manage the budgets given," he said.

Stadium's Site Undergoing Adjustment

Meanwhile, Perimeter Properties, the company that owns the 120-acre foundry site, may buy back some land it earlier sold to the state for a new Interstate 24 exit ramp to find the best footprint for the facility, the Times Free Press learned.

"We're just now in the very inception of trying to site the ballpark," Irwin explained. "With a few more feet, it could open up opportunities for the stadium we're interested in exploring."

He said there are many ways planners can fit the stadium on the foundry property. Most concepts do not require Perimeter Properties to buy back any of the 2½ acres of the six acres it had sold and was left unused by the Tennessee Department of Transportation (TDOT).

But, Irwin added, it is worth asking the question if buying some of that land could allow the use of more of the existing foundry buildings in the stadium's final design.

Currently, Perimeter Properties is not sure if it will buy back any or all the acreage, but he noted, "We're pretty sure it's something in the middle."

Rae-Anne Bradley, a spokesperson of TDOT, said her agency has been contacted about the idea, while noting the landowners will have to apply to the state to repurchase the property.

"That request will have to work its way through our excess land office and process," she said in an email.

New Tax District Created to Finance Ballpark

The city of Chattanooga and Hamilton County in 2022 approved the creation of a special tax district around the planned stadium to help finance it. Most of the new property tax revenue from the special district, Lookouts' lease payments, sales taxes, parking revenues, and $1.4 million each from the city and county, will pay for debt service on 30-year bonds to be issued for the project.

Revenues from the tax district's 470 acres around the stadium would pay for 58 percent of the project. The district includes not just the 120 acres of developable foundry property, but the South Broad area around it. Also included are several tracts south of Chattanooga Creek, including a site for a proposed greenway connecting to Alton Park.

City and county officials have said they initially expect $350

Stadium Designed to Host Multiple Events

A groundbreaking for the proposed Chattanooga Lookouts stadium could take place in April, Goldberg said in September. That timeframe would allow for a planned April 2025 opening of the ballpark, coinciding with the start of the team's minor league baseball season.

Officials said that in addition to baseball, other events at the new stadium will include high school sports, soccer, concerts, and charity events. Lookouts' officials said their existing AT&T Field was built in 2000 for minor league baseball only and is obsolete in terms of meeting current needs.

Also, the Lookouts are facing new guidelines by Major League Baseball for minor league stadiums, and Chattanooga could lose the franchise if those requirements are not, team officials told the Times Free Press.




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