x
Breaking News
More () »

Negotiators trying to decide who will pay for possible funding gap of downtown Knoxville stadium project

The stadium project in downtown Knoxville is delayed because of new and unexpected costs. Leaders haven't settled on a final price for the project.

KNOXVILLE, Tenn. — Knoxville and Knox County leaders said supply chain issues are delaying the stadium project in downtown Knoxville.

In April the city, the county and Boyd Sports announced the stadium would open sometime in 2025, delaying the project by a year. The three parties involved in the project said they don't know yet how much the stadium will cost them when it's finally done being built. Negotiators are bracing for a gap in funding, because of higher costs of materials and rising interest rates for loans.

In 2019, developers estimated the stadium would cost $75 million. In 2021, they said inflation drove that cost up to $90.5 million. Around $74.3 million of that cost would be funded by the public.

In the November proposal, negotiators said the maximum exposure of public funds is $74.3 million. Smokies Owner Randy Boyd said once the agreement is signed, he would cover any construction cost overruns. 

But since city and county officials created their estimates in 2021, interest rates have gone up by 2% — mostly in the last six months. That increase could cost the project millions of dollars more than the previous $90.5 million estimated price.

On top of the cost to borrow money, construction costs have skyrocketed over the past two years. 

"I would have to budget an additional 50%," said Rick Dover, a developer building the Tennessee Supreme Court Building downtown. "I can't take anything for granted now, every day is an adventure." 

Because they said there was volatility in the bond market and in the construction market, negotiators don't know how much the stadium will cost when it's all said and done. 

In a joint statement Boyd Sports, Knoxville and Knox County said "the final stadium cost has not yet been determined." 

"The City, County and Boyd Sports are collaboratively finalizing the stadium design and looking for ways to manage costs. We are all confident a high-quality stadium will be built in Knoxville." 

The sides are hoping to have a plan on how the parties involved in the stadium would pay for cost overruns by the Sports Authority Meeting on July 26. 

None of the parties involved have signed the development or lease agreement. 

Paid Advertisement

Before You Leave, Check This Out