The argument over the proposed stadium in the SODO neighborhood has replaced the argument over the Alaskan Way Viaduct as the one that never seems to end. Nowhere was that more evident than at the town meeting to discuss that stadium at North Seattle Community College on July 10.
Whether it might not be a good deal is debatable and was by an estimated crowd of 200 people. It quickly turned into a food fight without the food. The first person to speak called the proposal being put forth by Chris Hansen and his group of investors “blackmail.” That led someone else in the audience to shout out that the Port of Seattle was trying to blackmail people. Metropolitan King County Councilmember Bob Ferguson asked people to disagree with each other in a respectful fashion.
Things really got silly when someone supporting the proposed stadium urged “our elderly neighbors” to understand that change was going to come and it wasn’t a bad thing. The idea seemed to be, that only senior citizens are concerned about the money involved to build another stadium.
Of course, Seattle already has several stadiums for various sports. In fact, it’s still paying on a $200 million debt involving one that’s been torn down for more than 10 years: the Kingdome.
Why do we need to build another one? Fans of basketball, still angry over the loss of the Sonics, feel that there’s a need to bring back professional basketball to Seattle and to help build a sense of community, as well as create jobs — but we’ve heard that argument before. You need to wonder how many stadiums are necessary to ensure “community” in Seattle.
Taking a gamble
Chris Hansen wants the city and county governments to sign a contract so both would contribute a total of $200 million — to be obtained by issuing bonds — to the project if both a NBA (National Basketball Association) and NHL (National Hockey League) team can be obtained by Hansen and his investors.
Of that, $100 million is to be set aside to purchase the land — already owned by Hansen — at the land’s appraised value; it’s been estimated to be worth $50 million by Hansen. The remaining amount would be used to purchase the arena building, once it’s finished.
If only a NBA team is found to play in the proposed stadium, the amount both government entities would contribute would be only $120 million, with the City of Seattle’s share being only $115 million and King County government’s being only $5 million. The extra cost to build the proposed arena would be furnished by Hansen’s group, so we are told.
Hansen calls it a good deal, since after 30 years, the City of Seattle would own the land. But it’s anyone’s guess what that land will be worth in 30 years, especially with a stadium on it that might be worth little. The resale value of old stadiums seems to drop fast.
The theory is the bonds could be paid back by both taxes on arena operations mainly through admissions and Business and Occupation taxes, as well as $2 million in annual rent to be paid by Hansen’s investment group. If there were any surpluses after that, they’d go to a public reserve fund for improvements to the arena; and, if any were left after that, into a general fund, to be used for various civic projects.
On the other side, the Port of Seattle is opposing the arena deal, saying traffic congestion from events at the arena could interfere with Port operations. Former Seattle City Councilmember Peter Steinbrueck, who was at the meeting as a spectator, said a few days later, “The average Port [of Seattle] job is $70,000 (per annum). There’s an economic cluster industry that’s strong, sustainable and, with economic development, could be a job generator for the global economy.
“There’s cause for deliberation. It’s conceivable the City Council could exempt the memorandum from Initiative 91; nothing is stopping them but politics.”
That initiative, now law, dictates that the city gets “fair value” on any new stadium. Value is defined as the rate of return of a U.S. Treasury bond — currently about 2.7 percent, annually.
I-91 applies only to cash investments; however, in the proposed arena deal, both the city and country governments would use their debt capacity, not cash — call it rolling the dice on an arena.
More studies needed
There’s a point when no rational argument will influence people on this issue. As was shown by the town hall meeting, most people come to the discussion of another stadium with their bias intact. What’s needed is a more intelligent conversation and where we look above the noise.
An independent study needs to be commissioned, which would include the impact of another stadium on the jobs the Port of Seattle offers now vs. the jobs another stadium might offer.
There’s a different economic climate in Seattle, in the country, since the two other stadiums, just south of downtown, were built. The era of irrational exuberance is over.
If we have learned only one thing in the last few years, it might be that just because something can be built, with somebody else’s money — think taxpayers here — doesn’t mean it should be.
TERRY PARKHURST is a community activist who lives in Maple Leaf.
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