With the city taking offers for KeyArena upgrades and an all-private funding proposal by Chris Hansen’s group for a Sodo arena, Seattle City Council members get an opportunity to choose which venue would benefit a growing and economically prosperous Emerald City.
Inside sports business
In just one jolting week, this city has gone from a cautionary tale of how not to build sports facilities to an example most places would covet.
A week ago, our legacy was of hundreds of millions of public dollars thrown at two billionaire-owned sports teams side-by-side in the Sodo District. While nationwide alarm has been expressed over ongoing or attempted public giveaways for an NFL stadium in Las Vegas and MLB parks in Atlanta and Arlington, Texas, our history of Safeco Field and CenturyLink Field handouts isn’t much better.
But our arena legacy is now a completely different story.
The past week saw developer Chris Hansen offer to build an all-private Sodo facility, followed by news of two major sports conglomerates — Oak View Group and Anschutz Entertainment Group — planning state-of-the-art KeyArena renovations.
Most cities would gladly settle for either of these unusually favorable arena happenings. But our elected officials actually get to choose which of these Sodo or KeyArena proposals most benefit the city.
And that’s great news for NBA fans and anyone wanting the NHL here. Two arena locales close to the downtown core will openly compete; with NBA and NHL leadership looking on, knowing a winning site won’t be in some distant suburb.
This is how politicians are supposed to protect cities, given decades of independent economic studies showing public dollars for sports venues nets little financial gain. Check out anything by Stanford University’s Roger Noll, Holy Cross University’s Victor Matheson, Andrew Zimbalist of Smith’s College, Field of Schemes author Neil DeMause or any of their colleagues not on team or city payrolls the past 30 years.
Learn how sports venues displace economic benefits from one end of a city and moves them to another. How jobs promised by such venues are usually lower-wage, part-time positions.
No one is saying sports arenas and stadiums don’t have a place. Or that civic pride isn’t fostered.
Just that there are better infrastructure and job-creation schemes worth throwing hundreds of millions of dollars at.
As citizens become better informed, opinion polls and referendum results show the public generally disfavors sports subsidies. And municipalities are finding it’s easier to not even hold votes.
King County voters in 1995 famously rejected the Mariners’ request for public money for Safeco Field, but state legislators soon after authorized a $384 million funding package anyway. A statewide 1997 ballot initiative passed by a narrow 51 percent, approving funds for a new Seahawks stadium — which became a $300 million subsidy for CenturyLink Field.
Nowadays, Nevada citizens are ticked that Gov. Brian Sandoval approved $750 million for a new NFL stadium in Las Vegas for the Oakland Raiders. Sandoval did so without a vote or much public debate, at a time MGM is actually building an all-private Las Vegas arena to house an NHL team and possibly NBA.
The Atlanta Braves are getting a new baseball stadium in Cobb County 20 years after taxpayers financed Turner Field. The county pledged $400 million toward construction without voter consultation. Irate citizens, in the first chance they got, ousted Cobb County commission chair Tim Lee in his re-election bid.
But the stadium opens next year.
In Arlington, they actually are holding a Nov. 8 vote on $500 million in public funding for a new Texas Rangers ballpark only 22 years after taxpayers built the last one. In an unrelated matter, Arlington voters are being asked to approve $320 million in bonds for schools, parks, transportation and other needed infrastructure.
Contrast that with Seattle’s arena situation.
Hansen paying for a $500 million Sodo arena would vault us among a select group of private NBA and NHL venues coming or built in places like Las Vegas, Miami, the Bay Area, Montreal and Toronto.
This usually would be enough to get an arena approved; especially in comparison to KeyArena renovations,which could have public dollars attached.
But this isn’t an apples-to-apples comparison.
One project involves a developer building a brand new facility he’d own. The other, a city-owned KeyArena asset that’s profitable but likely would lose money if a Sodo venue opens.
So, it’s not just the public’s share of construction costs to consider.
The savings on an all-private Sodo arena must be measured against potential corresponding KeyArena and Seattle Center losses. Likewise, complaints about future Sodo traffic by the Port of Seattle must be weighed against similar concerns from businesses and homeowners in Lower Queen Anne.
You’ve also got tax breaks, which any all-private sports project expects. Hansen wants a waiving of the city’s admissions tax and lowering of the business and occupancy tax for out-of-town revenue.
The city must ensure such breaks don’t completely offset the benefits of Hansen going private. Just as the benefit to renovating KeyArena can’t be wiped out by similar tax breaks, or public construction costs.
A restored KeyArena must also be “state of the art” enough so we don’t go through this again a decade from now.
The economics are complex and will require specialists to closely scrutinize details.
But once done, the NBA and NHL will likely both be eager to enter this market. Either in a brand new, or newly upgraded central locale.
Seattle has become a wealthy, desired place where many more people and businesses than ever, sports leagues included, want to be. And like the most beautiful woman at the dance, we don’t have to leave with the first guy showing up in a designer suit.
She has choices, and so do we. At least we do now, with the city taking KeyArena offers to see whether a new Sodo arena is needed.
It’s a tough call.
But every city in America believing in balancing good government with the wants of sports fans will envy that we get to make it.