diff --git a/Stackage/Build.hs b/Stackage/Build.hs
index f70ab76a..ff621a67 100644
--- a/Stackage/Build.hs
+++ b/Stackage/Build.hs
@@ -48,11 +48,18 @@ build settings' bp = do
 
     -- First install build tools so they can be used below.
     let installBuildTool tool = do
+            let toolsDir = packageDir settings ++ "-tools"
+            rm_r toolsDir
+            ecInit <- rawSystem "ghc-pkg" ["init", toolsDir]
+            unless (ecInit == ExitSuccess) $ do
+                putStrLn "Unable to create package database via ghc-pkg init"
+                exitWith ecInit
+
             putStrLn $ "Installing build tool: " ++ tool
             ec <- withBinaryFile "build-tools.log" WriteMode $ \handle -> do
                 hSetBuffering handle NoBuffering
 
-                let args = addCabalArgs settings BSBuild
+                let args = addCabalArgs settings BSTools
                          $ "install"
                          : ("--cabal-lib-version=" ++ libVersion)
                          : "--build-log=logs-tools/$pkg.log"
@@ -69,6 +76,7 @@ build settings' bp = do
                     ]
                 exitWith ec
             putStrLn $ tool ++ " built"
+            rm_r toolsDir
     mapM_ installBuildTool $ bpTools bp
 
     putStrLn "Beginning Stackage build"
diff --git a/Stackage/Types.hs b/Stackage/Types.hs
index a3fa9369..853f4c88 100644
--- a/Stackage/Types.hs
+++ b/Stackage/Types.hs
@@ -122,7 +122,7 @@ data SelectSettings = SelectSettings
     , selectGhcVersion       :: GhcMajorVersion
     }
 
-data BuildStage = BSBuild | BSTest
+data BuildStage = BSTools | BSBuild | BSTest
 
 data BuildSettings = BuildSettings
     { sandboxRoot           :: FilePath
diff --git a/Stackage/Util.hs b/Stackage/Util.hs
index bc25eea7..209095fb 100644
--- a/Stackage/Util.hs
+++ b/Stackage/Util.hs
@@ -115,12 +115,17 @@ addCabalArgsOnlyGlobal rest
 addCabalArgs :: BuildSettings -> BuildStage -> [String] -> [String]
 addCabalArgs settings bs rest
     = addCabalArgsOnlyGlobal
-    $ ("--package-db=" ++ packageDir settings)
-    : ("--libdir=" ++ libDir settings)
+    $ ("--package-db=" ++ packageDir settings ++ toolsSuffix)
+    : ("--libdir=" ++ libDir settings ++ toolsSuffix)
     : ("--bindir=" ++ binDir settings)
     : ("--datadir=" ++ dataDir settings)
-    : ("--docdir=" ++ docDir settings)
+    : ("--docdir=" ++ docDir settings ++ toolsSuffix)
     : extraArgs settings bs ++ rest
+  where
+    toolsSuffix =
+        case bs of
+            BSTools -> "-tools"
+            _ -> ""
 
 -- | Modified environment that adds our sandboxed bin folder to PATH.
 getModifiedEnv :: BuildSettings -> IO [(String, String)]