by Jon Styf
Starting in 2025, the Tennessee Smokies Minor League Baseball Team will have a new $114 million home in East Knoxville.
After a $65 million publicly backed bond sale in late May, the team held a ceremonial groundbreaking at the site last week to discuss the 7,000-seat stadium, touting numbers from Convention, Sports and Leisure International, which claim the stadium will have a positive economic impact for Knoxville residents.
CSL, a marketing company co-owned by the New York Yankees and Dallas Cowboys, produces numbers for stadium projects across the country as they look for public funding, including the Tennessee Titans, Nashville Fairgrounds Speedway, the proposed Arizona Coyotes’ complex in Tempe, Arizona, that failed a public referendum and the new proposed Las Vegas stadium for the Oakland Athletics.
J.C. Bradbury, an economist who has studied stadium projects across the country, had strong words about the Knoxville stadium and the Las Vegas estimates.
“It’s time to stop merely disputing what paid economic consultants are presenting as being incorrect,” Bradbury wrote. “This conduct should be called out as completely unethical and morally reprehensible.”
The Knoxville stadium will be officially owned by the new Knoxville Sports Authority, a joint venture of the city and Knox County. But Smokies owner Randy Boyd, president of University of Tennessee-Knoxville and a 2018 candidate for governor, will own the surrounding development. Boyd bought the Chicago Cubs affiliate in 2013.
The Smokies moved to Kodak, Tennessee, in 2000, and will return to Knoxville in 2025.
In 2021, the state of Tennessee approved the creation of a tax capture that will allow sales tax revenue from the stadium and the area within a quarter-mile radius to remain at the stadium to pay off the public bonds.
The estimated $142 million mixed-use development surrounding the stadium will include 630,000 square feet of residential space, restaurants and retail in the ballpark vicinity. When the state bill was passed, a $100 million private investment in the project was a requirement for the tax capture to be created.
While CSL and project leaders have touted the new spending and impact of the project, economists such as Bradbury have shown that professional sports stadiums do not produce the promised economic impact and instead rely on diverted spending in a region.
That means that a person who previously spent money at a restaurant or other Knoxville entertainment options – paying sales tax that goes to the state, city and county – would now instead spend money in the new district, where the sales tax goes back to pay for stadium construction at a cost to taxpayers overall.
Sales tax is Tennessee’s largest funding source, with $1.16 billion of the $1.6 billion collected overall in May coming from sales tax.
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Jon Styf is an award-winning editor and reporter of The Center Square who has worked in Illinois, Texas, Wisconsin, Florida and Michigan in local newsrooms over the past 20 years, working for Shaw Media, Hearst and several other companies.
Photo “Baseball Stadium” by Tim Gouw.
Conservative republicans an oxymoron
A very good article. I think that it is fair to say that the special taxation legislation which the State of Tennessee (the actions of both the Governor and the General Assembly) has bestowed in favor of the Knoxville Smokies Minor League Baseball Team will make University of Tennessee President, Randy Boyd, rich—significantly richer than he already is. The State of Tennessee does not usually confer such financial largesse upon its ordinary citizens, even its rich ones. I myself fully expect Boyd to run for Governor again. And if Boyd is elected our Governor, after the conclusion of his first term—if he is like every other Governor which Tennessee has elected in the last approximately one hundred years (except for Ray Blanton in 1978 who had his own troubles)—Boyd will probably want to seek a second term as Governor of our State. When does it all become enough, and how much is too much? In my mind, this is just another illustration of a recurring problem that needs to be stopped. And stopped asap. As I have argued previously on this website, Tennessee’s Governors should be limited to one term of office for the life of that person—ONE and DONE!
Incidentally, I am a MiLB fan. Since I have been retired I have travelled to many minor league baseball stadiums throughout The South with friends (my baseball buddies) to see MiLB games. I have been to Boyd’s Knoxville Smokies ballpark in Kodak on more than one occasion. It is a VERY nice ballpark! I really do not know why Boyd thought it necessary to move his baseball team from Kodak to Knoxville. His decision to do so could not have been based upon a need to replace an old, worn-out ballpark with a new one somewhere else. As I said, the Kodak ballpark is a VERY NICE BALLPARK. It all seems extravagantly excessive and expensive to me. In my opinion, the State of Tennessee should have had NOTHING to do with Boyd’s financial wants and vanity in this regard.
Once again, sucking the taxpayer dry, for minimal to no benefit.
This was a risky investment at best. Before the stadium bond is paid the team will be asking for upgrades or possibly a new stadium. These builds do not generate new revenue. To the contrary, they only divert existing local monies. Throughout all this, the city has to hope MLB does not again “right size” where they eliminate minor league franchises. Port Charlotte had their team (Stone Crabs) dropped, this was after the city built the team a new stadium. Fresno, after building a new stadium for the Grizzles, was disenfranchised from the Giants organization. Their AAA team was eliminated. They were able to secure a low level single A team playing the likes of Lake Elsinore and High Desert. Quite a drop in talent, quite a drop in fan interest and game attendance. Notwithstanding the bond to build the stadium which was designed to somewhat replicate the Giants home stadium yet needs to be serviced.
Local elected officials demonstrated a complete lack of fiscal responsibility in this matter. When Randy Boyd was asked why he did not provide the funding for this project he stated that it simply was not economically viable. Randy Boyd and Knox County/Knoxville Elected officials have succeeded in making asses of you and me.
The Report that allegedly supported this project as a win for everyone began with the following statements that clearly provide more than enough reason not to proceed.
“based on estimates, assumptions and other information…….information provided to us was not audited or verified and was assumed to be correct…….. we express no opinion or assurances of any kind on the achievability of any projected information
contained herein and this report should not be relied upon for that purpose. Furthermore, there will be differences between projected and actual results. This is because events and circumstances frequently do not occur as expected, and those differences may be material.”