Stadium construction hits ‘major milestone’

Overhead view

 The Knoxville-Knox County Sports Authority officially has issued bonds to pay for construction of Knoxville’s new multi-use stadium, a move the City of Knoxville and Knox County said in a joint news release was “a major milestone.” Also of importance? The release said the project “is moving forward – on schedule and within budget.”

Finalizing the total cost was a lengthy at-bat of balls and strike, to borrow a baseball term, as the Sports Authority navigated supply chain disruptions, rising costs, escalating interest rates and the federal debt ceiling issue.

The release stated: Market conditions are increasingly volatile and reflect investors’ uncertainty regarding Congressional authorization to raise the nation’s debt ceiling. The financing team factored in future unpredictability when deciding to finalize the financing the week of May 22 and secured several key buyers for the bonds. The City and Knox County’s respective debt obligations remain unchanged from earlier financing plans.

After squaring up the ball – a baseball term for perfect contact by the batter – the Sports Authority’s financing team, led by J.P. Morgan, went to the bond market May 25, and “agreements were reached with buyers, pending final closure in June, to purchase $65 million in publicly-backed bonds to construct the stadium. The 30-year bond issue achieved a true interest cost (TIC) of 5 percent.”

As the News Sentinel story by Brenna McDermott – available HERE – noted: Bonds are essentially a loan from a buyer, who makes the purchase to make a profit off the interest when the bond is repaid.

A detailed breakdown of the funding can be read HERE.

Early construction work for the $114 million stadium – which will host the Knoxville Smokies baseball team beginning in 2025 and One Knox SC soccer, among hundreds of other events – has started. An official groundbreaking will be held in June at the East Knoxville site on the edge of the Old City.

Overhead view of construction site.

“We negotiated a successful sale,” Sports Authority Treasurer Richard Bass said. “One benefit to going to the market when we did was to mitigate the risk of increasing interest rates. Both the City and the County have strong credit ratings, which we believe attracted buyers and allowed the financing to be accomplished.” 

Maria Cornelius, a writer/editor for Moxley Carmichael, is a lifelong baseball fan and longtime Smokies season ticket holder.