Knoxville's Smokies stadium funding secured, a crucial step as construction ramps up

After a quick timeout to see how interest rates could change amid U.S. debt ceiling negotiations, the Sports Authority has issued bonds to pay for construction of the Tennessee Smokies baseball stadium.

It's a major milestone for the $114 million project, which is already under construction just east of the Old City in downtown Knoxville.

The Sports Authority's finance team, led by J.P. Morgan, sold $65 million in publicly backed bonds May 24 at 5% interest, well below the 6% maximum outlined in the bond deal.

Bonds are essentially a loan from a buyer, who makes the purchase to make a profit off the interest when the bond is repaid.

The 30-year deal closes in June.

"We negotiated a successful sale, which was completed today," Sports Authority Treasurer Richard Bass said in a press release. "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."  

Stadium construction is on schedule to open in spring 2025. Tennessee Smokies owner Randy Boyd has committed to loan up to $20 million for construction and also is paying $6 million out of pocket.