I know this has been a bad week for Executive Constantine with the media. And every week is a bad week for Mayor McGinn with the media. But does anyone think the city and the county would be getting this good of a deal on the potential NBA/NHL arena if their predecessors were still in office?
Honestly, Ron Sims is as responsible as anyone for the bad deals we got on Safeco and Seahawks Stadium* and Greg Nickles attempts to keep the Sonics were perfectly willing to overspend public money. Of course it helps to have a willing, honest partner, and nothing has actually finished yet. We’re also in a different era where the appetite for public spending in this economy is less than it was a decade ago. Still, the elected officials are deserve a lot of credit for not giving away a lot of public money and still moving forward.
* No, I’m not sure why I’m OK with calling where the M’s play by its corporate name but not where the Seahawks and Sounders play.
Because Safeco Field has always been Safeco Field and Seahawks Stadium is on its third name.
There’s probably some truth to that.
But there’s no good reason for ANY public money to have gone into this deal. If Hanson is so sure that Seattle really wants a third stadium, and that it’s going to be such a screaming success, then he should get private financing for the whole thing.
Bullshit. The public consistently opposed tax giveaways for stadiums in the ’90s, too. Safeco failed twice at the polls; voters were overridden by a deal cut with the state legislature. And Paul Allen’s play palace was paid for with an Allen-financed statewide vote. It narrowly passed because there was greater support for football in more rural parts of the state; the Allen vote actually failed in King County, but it got built anyway because Allen was smart enough and rich enough to bankroll a vote for the entire state.
And people wonder why there was so much mistrust of the Bennett-era Sonics deals. For that matter, while this current proposal looks a lot better, a lot could still go wrong – starting with the fact that Hansen’s money is contingent on attracting relocating teams in short order from both the NBA and NHL, which there is no historical precedent for. Anywhere. At all. A scenario where he can only get one team and comes back to the city to make up the difference is very, very believable.
@4,
I didn’t mean to imply it was popular ever. Only less so in this economy. Also at the link, the Memorandum of Understanding can be only for an NBA team.
@5 His point is it doesn’t matter whether it’s unpopular because the rich always figure out ways to stick ordinary taxpayers with the bill. That’s how they get (and stay) rich. We ought to be suspicious in the extreme.
This is not a good deal for several (but not limited to these) reasons.
Job displacement. The Stadium Review Panel said 300 permanent FT jobs, max 1000 PT jobs long term. If either Terminal 30 or 46 close because of traffic/development, that is at least 3-6000 direct jobs lost. See: Martin Report.
If ArenaCo goes bankrupt, the city is not allowed to pursue them as a creditor *until* the “reserve fund” is depleted. It’s in the MOU. Also, a BK trustee will nullify any prior contract. You cannot sign a contract that “protects” against bankrutpcy; after BK, all bets are off, period. Paul Allen, PDX, renegotiate. Look it up.
Next, tax revenues that go to city services will go down, because economic activity from a new stadium will inevitably take away tax revenue from discretionary spending elsewhere. Guess who pointed this out? City finance team at the thrid meeting of the Review Panel. They pegged this “substitution rate” at 15%. It is likely much higher. Get ready for a cut in city services, because that tax revenue will be earmarked to pay for a stadium.
This is a public funded project. Who cares if people think it pencils out? It is still publicly funded, and there is always risk to being a creditor. No one knows who “AreaCo” is; they aren’t listed in any database. We don’t even know who the deal is with.
The traffic mitigation will run at the very minimum of $200m. That assumes that a 200 event a year venue, that has a seating capacity greater then (18000) what the Mariners can actually sell seat-wise (12000) will have zero new traffic. An SDOT study from 2010 states that peak traffic for events already begins at 2:30 pm, long before the Port closes. So much for “it doesn’t affect Port operations”. Rubbish. The mayor has already stated that he will not sink a single dime into traffic mitigation, as he thinks people will pay 300 for a ticket and sit on a bus.
Speaking of which, try asking the ATU metro drivers what they think of the deal. 500 buses on surface streets to be routed through this mess? I’d hate to be a bus rider in South or West Seattle.
The only people this will benefit is Chris Hansen and his investors. He will invest $30m in property and turn it over to the city for up to $100m without sinking a dime into it; it’s called buy–permit–sell. Oldest flip scam in RE there is.
The tepid Stadium Panel said we need NBA and NHL to make this work. This is the panel appointed by teh Mayor. Now NHL is left out of the MOU. Nice bait and switch to the public, and we haven’t even made a deal. How bad will it get if we do make a deal? Reminds me of high pressure real estate bubble era sales tactics.
Here is your progressive mayor, selling out to WALL STREET. Shameless. And shame on progressives for buying into this load of crap.
BTW:
http://www.fieldofschemes.com/.....a_p_1.html
@7 Wow, that was a righteous roast. Most all of the points you’ve brought up are well worth considering, and ought to be considered deal breakers if they don’t get answered.
As nice as it might be to have an NBA and an NHL team here, this doesn’t seem like a good way to go about it. The displacement of jobs and disruption of the Port are the issues that concern me the most, with the disruption of traffic close behind that. I don’t know if McGinn is naive or letting ideology do his thinking for him instead of informing it, but there’s already a need for traffic mitigation across the entire city, and the stadiums aren’t even started yet.
It was bad enough that Highway 99, which apparently used to funnel a large amount of freight between Sodo and the Interbay-Ballard industrial area, will no longer be able to do so now that the Alaska Way Viaduct is gone. And now some hedge fund manager wants to build yet another sports palace that is highly likely to destroy jobs at the Port, jobs that actually matter and pay a wage that’s worth talking about? It seems to me, based on these two points, that the current city government has no industrial policy, and no interest in creating one. We are, it seems to me, in the process of eating our seed corn.
I would not be averse to building an NHL or NBA stadium in this city, but it should not be built where Hansen proposes to build it. There are already two stadiums in the immediate vicinity. I also object to having it built in this manner. Either it should be entirely public, or entirely private. Many great stadiums were built during the Great Depression by the Works Progress Administration. Let the city build it, with locally hired labor paid a decent wage, and then let us invite the NBA and NHL to come and set up shop. If they want to locate a team here, which they supposedly have for years, then they will come.
And if that is too costly, which it very well could be? Then let the NBA or NHL, or the prospective team owners, build the stadiums themselves. If Mr. Hansen is so enamored of basketball, let him pay for the whole thing himself, or with the help of his wealthy friends. That way they can own the stadium outright and pocket all of the profits without having to argue about it. I am sure he and his friends have enough money for it. It’s not like the tax code doesn’t favor them or anything.
One other thing I forgot to mention. The Times reports that the bonds issued for the land purchase will be General Obligation Bonds, which are backed by all city revenue streams. Bonds that are tax revenue specific are called Revenue Bonds.
The proponents are making the case that the taxes generated by teh stadium will cover the bonds and that there is no risk to the city. But if these were revenue Bonds, the risk of default is higher, because no other revenue stream would cover it. That means in order to attract investment the interest rate goes up, because the risk for default goes up. It is questionable that this would even qualify as a conservative investment and might be rated as junk, certainly not AAA by even the most crooked rating agency.
Naturally, Hansen wants General Obligation bonds, because the interest rate is lower that the deal is hedged on the fact that when shortfalls happen, the city can simply raise property taxes, utility rates, sales taxes, or cut more services to cover the debt. Otherwise a bond default would be a disaster for the city, in which case, Hansen (“AreanaCo”) makes off in Bankruptcy court.
This deal is like McGinn using a credit card to buy a house.
No thanks.
Adding to what others have already written, all of the stadium votes failed in Seattle — and the closer to downtown the voter lived, the more likely was a “No” vote. The legislature’s blatant pandering to the for-profit media — sports is a great product for them to sell — and big-money boys helped get Tim Eyeman into the Initiative-whoring business. Great job, folks. (And the taxes to pay for the Mariners’ stadium came from existing local businesses, so they didn’t have to wait for the re-allocation of discretionary spending which a sports palace will bring. The government will do that at the start.)
In short, a bad deal even if it works as stated.
It was bad enough that Highway 99, which apparently used to funnel a large amount of freight between Sodo and the Interbay-Ballard industrial area, will no longer be able to do so now that the Alaska Way Viaduct is gone.
The main reason for building the new tunnel is to enable that traffic to flow better, unimpeded by downtown traffic; that’s why the tunnel is a true bypass, without connections downtown.