The construction of a 23,000-seat roofed stadium at Macquarie Point, slated to cost $715 million under the government's proposal, was a condition of the AFL granting the island state a team licence.
In recent weeks, a consortium headed by former premier Paul Lennon released design plans for an alternate stadium on the nearby regatta grounds.
Mr Lennon and Stadia Precinct managing director Dean Coleman fronted a parliamentary inquiry on Friday examining the Macquarie Point stadium to spruik their proposal.
With the costs of materials, including concrete and steel, soaring in recent years, Mr Coleman said his proposal of building the stadium while leaving the rest of the precinct to private developers will keep costs down.
"The problem on the Macquarie Point stadium and the (government's) $715 million, which was quoted two years ago, you have to ... do the base mathematics of it going up by 35 per cent per annum for the last two years and that puts the stadium in excess of a billion dollars," Mr Coleman said.
"You can't build a stadium for less than a billion dollars. We realise that and that's why it becomes a community-based precinct and we build around it."
The managing director assured Tasmanians they will not have to pay more than the proposed sum even if costs blow out under the fixed-price contract.
"The $745 million for our stadium - we have no issues in guaranteeing that."
The consortium used the stadium's retractable roof as an example of how costs could be shared where the stadium would pay for the roof while commercial developers pay for the perimeter roofing.
"We don't pay for the pretty facade. Other people pay for the pretty facade," Mr Coleman said.
"We have contingency built in and it's the injection of funds from the other commercial developments."
Premier Jeremy Rockliff has been given until Christmas to sign a memorandum of understanding progressing the consortium's proposal to provide certainty to potential private investment.
"To get people interested in a project to size, they need to see that there's a level of commitment from government," Mr Lennon said.
Hobart's city council, RSL Tasmania and the Royal Hobart Regatta Association have endorsed the consortium's plan.
The state government has pledged $375 million toward its own stadium plan, while the federal government has committed $240 million for the broader Macquarie Point development.
