There's a great place where we started tailgating last year that has grass. Its in between Clarence Brown and the Humanities building. For some reason, there's not a lot of people there and its right next to Volunteer Village with all of their festivities. Its also a short walk to the Vol Walk so you can hop over and hop back before the game starts.
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Oh also, there is no parking to speak of so you have to drop offyour stuff and right behind Hess Hall and wheel it 100 ft or so.