City Hall

Panel: Arena Idea "Has Promise," But Many Questions Remain

By Josh Feit April 4, 2012

A panel appointed to review a proposal to build a new, $500 million "self-financed" arena in SoDo, at an up-front cost to the city and county of $200 million, has concluded that while the idea "has promise," there are still "many important issues to be worked through to ensure these principles are met and address other issues of importance to the community" before moving forward.

"The public investment would be repaid  by the team," panel member Lenny Wilkins said at a press conference before the arena panel's final meeting this afternoon. "No new taxes would be created or levied for the development of this arena."

The criteria the panel considered included: The requirement that the proposal does not take money out of the city or county's general fund; the requirement that the city and county be protected from "any financial risks"; and the requirement that the arena "result in an investment into the community and region."

Ultimately, the city and county will be responsible to pay for any unpaid debt on the project from their general funds if all other protections fail, panel member Jan Drago said this afternoon. Additionally, the report concluded that there could be additional capital and operating costs, such as traffic and transportation improvements and mitigation (issues the Mariners and the freight community raised this morning)  and that the proposal would require the city and county to shift some spending away from other purposes to pay for the arena.

As for KeyArena, the city's existing arena, the report concluded, "the solution for KeyArena has not yet been identified."

Asked about the potential risk to the city and county if the team or arena goes bankrupt or defaults, panel member Maud Daudon responded, "There are a series of backstops to pay back the bonds. The first is the taxes generated from the facility. The second is the lease. The third is this makeup lease"---additional rent that would be paid by the stadium investor group if the base rent and tax revenues don't cover the cost of the arena.

"Basically the notion is not to have any of that fall on the general fund of the city and county."

However, panel members acknowledged that the city and county would need to pay for traffic mitigation to accommodate the additional traffic a new stadium (which, as we've noted, would not be well served by light rail) would create.

"The Mariners raise some very legitimate points," Drago said, but "those things would need to be done regardless of if there's a new stadium."

Panel member Dave Freiboth, executive secretary of the King County Labor Council, said he was glad the panel was discussing concerns about traffic mitigation near the Port of Seattle's SoDo terminals.

"I think it's arguable that those [traffic mitigation] investments would need to be made" even without a stadium, Freiboth said.
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