KNOXVILLE, Tenn. (WATE) — A debate in Nashville could have a big impact on the future of a major development proposal in Knoxville. Lawmakers are considering a proposal that would offset public investment in a new baseball stadium downtown. In total, it requires $65 million from the city and county.
“This is one of the largest economic development projects in the county’s history. It’s not just a baseball stadium. If it was just a baseball stadium I would not support it. But with the entire package, I do support that. Also the way it’s structured, it’s not putting any additional burden on the Knox County taxpayer,” Knox County Mayor Glenn Jacobs said.
State Senator Becky Duncan Massey (R-District 6) is sponsoring a tax capture bill to help recoup the public investment. The Senate Finance, Ways, and Means Committee held a hearing on the measure Tuesday. Massey touted the idea as “critical” for making the proposed multi-sports and entertainment complex possible.
She also emphasized the site’s potential, aside from the 7,000-seat stadium, including new residential, dining, and retail spaces. The site developer plans to bring more than $100 million in private investment with the stadium.
Massey estimated more than 3,000 new jobs to come from the development and more than 200 additional events, from weddings to conventions, to come to Knoxville as a result of the investment. A group bringing professional soccer to Knoxville said the team could play at the multi-use stadium.
“This bill is critical to advancing this transformational economic development project that will result in an economic impact of over $1 billion over 30 years,” she said.
The state would still receive 1.5% of any sales tax generated, to go toward education. Any parcel within the zone earning more than $5,000 in state tax revenue currently will be exempt from the capture bill.
All revenue captured under the proposal is also required to go toward the initial stadium debt service. The capture is for 30 years; however, it ends if the debt is paid before. The capture bill also stipulates at least $100 million in investment take place within the zone.
State Senator Bo Watson (R-District 11) estimated the plan to impact parcels on about 125 acres of land in the Old City. It essentially includes establishments within a quarter-mile from the center of the stadium. Any new sales tax revenue generated within that zone would be used to offset the public investment.
Watson expressed concerns the develop would encourage local people, those who already shop and dine in the region, to go to the new site instead, and bring less revenue to the state.
“Minor league baseball is more regional. So people who are coming to the games now, they’re eating at restaurants that the state is now collecting sales tax on. You’re going to simply transfer them to one area to another area, so at the end of the day the state loses tax dollars because we’re collecting even less in this zone than we would be collecting if they were in the other part of the city,” Watson said.
Defending the proposal at the Tuesday hearing, Mayor Jacobs frequently pointed out what he sees as a win-win, and cited the lack of revenue generated at the site today.
“It’s one of the most prime locations in Knox County. It produces no money in sales tax. No money whatsoever. So whatever that it does produce will be an increase,” Mayor Jacobs said.
Massey also rebutted those concerns by pointing out the development includes new housing opportunities, which will bring new residents to the county. She also expressed her belief the development would encourage more people to travel downtown, venture to Market Square and the old city, spend money, and ultimately resulting in more revenue for the state.
Massey said following the hearing on her bill: “I’m confident the bill is in a good place and we’re going to be able to pass it.”