Let’s be clear about Chris Hansen’s new offer: There’s still public money on the table. About $176 million in foregone taxes, according to the city.
Here’s the deal. In 2012, the council approved an agreement where the city would finance $200 million in debt (plus interest) to build a SoDo arena for a new Seattle NBA team. That deal dedicated all the tax revenue from the new stadium—about $259 million over thirty years in admissions tax, sales tax, B&O tax, property tax, lease tax—to cover the debt. And Hansen said if those tax revenues didn’t meet those expectations, about $15 million a year, he’d personally cover the difference.
On its surface, that seemed like a pretty good deal: the stadium was paying for itself. A more skeptical view, however, is that the city was offering Hansen a sweet deal by forgoing the public benefits of an NBA team for 30 years by losing out on the tax revenue. In other words, what’s the city’s financial interest in a stadium if the stadium isn’t bolstering the city’s finances? Essentially, the city was loaning Hansen the money and then the city was paying off the loan.
In Hansen’s new offer (the old one flopped because the new council didn’t approve a necessary street vacation for the project) he says never mind the $200 million, I’ll pay for the stadium up front. That is certainly a better deal than the original.
However, since he’s not borrowing any money from the city up front, he also doesn’t want to pay the admission tax, which the city estimates is about 75 percent of the anticipated tax stream. (That's the estimated $176 million.)
Hansen has also indicated that he doesn’t want to pay part of the B&O tax—the tax on away game TV rights.
Seattle’s other major professional sports teams, the Seahawks and the Mariners, also don’t pay admissions taxes.
Of course, one major problem the council had with the original deal was that stadium traffic would disrupt maritime industry operations in SoDo; the Port of Seattle has been the loudest critic of building a third stadium in SoDo. Hansen has pledged to also dedicate the $20 million toward the Lander Street Overpass, an estimated $180 million traffic fix that’s currently in the city budget, but is about $27 million shy.
For starters, with the city all in on the Lander Street Overpass—Mayor Ed Murray’s budget requested $142 million and King County and the Port itself are expected to help—I don’t think the port is nervous about that project.
When I asked the Port yesterday if Hansen’s offer to help pay for the Lander overpass changed the equation for them, or if they maintained that SoDo land is simply not a good spot for an arena, Port spokesman Peter McGraw said simply, “the latter.”
And as if there was any doubt, Port Commissioner John Creighton issued a statement later in the day totally scoffing at Hansen’s new bid.
Our perspective on this matter has not changed. While we wholeheartedly support the return of the NBA to Seattle, we reiterate that the sports arena poses an unacceptable threat to the most productive industrial area in the state and our ability to support and expand middle-class jobs.
SODO is key to this region’s middle-class jobs. Our maritime, manufacturing and trade industries employ nearly 30,000 workers earning family wage incomes in this vital piece of land. These industries depend on the safe and efficient movement of cargo, and this project threatens a critical east-west route through the area; industry must operate near networked transportation, waterways and close to its workforce to minimize traffic and sprawl.
As noted by more than 50 state legislators who signed a letter opposing the street vacation, our waterfront plays an important role in the entire Washington state economy, serving as the gateway to billions of dollars of agricultural and industrial exports. During the Council street vacation debate, council members cited concerns over traffic and jobs and economic justice, noting that you can build an arena anywhere, but you cannot build a natural deep water port.
Seattle’s working waterfront continues to lift tens of thousands of families into the middle class. It is the City’s responsibility to protect industrial lands…
Mayor Murray, who’s rumored to be more interested in the Key Arena site in Lower Queen Anne for the NBA also issued a statement, saying:
The City will review the letter sent by a group of stakeholders, including Chris Hansen, suggesting a revision to the previous SODO arena proposal. We share the goal of bringing the NBA and NHL to Seattle. The City will continue to consider all options to build a new, state of the art arena that will accomplish that goal and that can serve the city for years to come.
Of course, Hansen’s first hurdle is the council, which shot down his required street vacation request last May. (The 5-4 vote against the street vacation—Hansen wanted to take over a portion of Occidental Avenue South—caused a berserk sexist reaction you’ll recall because the five no votes were cast by all five women on the council.) Hansen is asking for a new vote on the street vacation now.
Council member Lisa Herbold, in sync with her former boss—a man!—longtime former city council member Nick Licata— is perhaps the most ardent critic of stadium deals. I checked in with her yesterday to see if Hansen’s new offer was more appealing.
She said her biggest problem with approving the street vacation had to do with the fact that Hansen has yet to even secure an NBA team, and she simply referred me to the last line of a lengthy blog post she wrote about her vote last May. She wrote at the time:
IS THE ARENA DEAD? …. If an NBA team is secured, a new street vacation application could be made for the current location under the current MOU. [Memorandum of Understanding.]
By offering to pay the $200 million himself, though, Hansen has essentially offered to tear up the MOU.