Today’s news conference has come and gone, and according to the players in the Seattle arena drama, taxpayers will not have to pay for the arena directly.
“Stressing that no taxpayer money would go into the project, McGinn and Constantine said up to $200 million of public funds could be used to finance construction. That money, which would involve a city-county bond issue, would be paid back by a combination of rent paid on the facility and new tax revenues.
Private investors, lead by hedge fund manager Chris Hansen, would invest $290 million in the arena and be responsible for all cost overruns, McGinn and Constantine said.
The two elected officials said the arena project would create thousands of good-paying construction jobs in the short run, and would attract tourist revenue to the city as fans follow teams to Seattle.
They also stressed that they wanted to secure a long-term deal for the city and noted that the arena proposal involves a 30-year lease agreement by Hansen and his partners.”
Now, missing from the statement was who would pay for road improvements, which I guess is yet to be hammered out. Nonetheless, if the arena could be built completely with bonds, and without any taxpayer money whatsoever, my opposition to the thing will go from rabidly against an arena, to mildly against an arena.
“Still against? Well gee, Rex, why? Don’t you want free stuff?”
Well, sure, but there ain’t nothing in this world for free, my friends. The arena will still cost each and every Seattleite, although just how much will be hard to quantify.
The first reason I am still against the arena is that the economic benefits of stadiums and arenas to cities are specious. This issue has been studied before, and the conclusions typically show very minor benefits, if any benefit to the immediate vicinity of a stadium.
http://www.accessmylibrary.com/article-1G1-20312983/benefits-presence-professional-sports.html
As both the number of publicly subsidized (sports) facilities and the scale of public-sector expenditures have increased, policy analysts have evaluated the expected economic benefits. Such analysis has shown projected economic returns to be greatly exaggerated, overly optimistic, or simply incorrect.
I live Downtown, and aside from a few bars in Pioneer Square, I don’t see people spending much money here immediately before and after Seahawks/Mariners games.
The majority of fans don’t walk here, they drive here, and instead of shopping at Pike Place Market, most of them simply clog our streets before and after games, getting to and from their homes. The businesses that make the most money from professional games locally are the parking companies/adjacent businesses who charge up to $40 per space. I’m not sure how many jobs this will create.
Second, a new arena would put money in David Stern’s pocket. In my opinion, David Stern should not receive one penny from Seattle. For anything. Ever.
Third, I’ve been riding the anti-growth train lately. Frankly, I’d rather see less people here than more. I’m not sure that bringing more and more people here and “showing the world what a great city Seattle is” makes as much sense as people think it does. The city doesn’t need any more PR. The cost of living is already very high here, traffic gets worse by the day, and we don’t have rent control. Those who will benefit the most from the “growth” of Seattle are the people who already have assloads of cash. Cash that DOES NOT stay here. Even the group that owns the new arena will be based in California.
This means that while the big developers and hedge fund managers siphon even more money from Seattle, all average Seattleites will really have to show for an arena is more minimum wage jobs and higher rents and costs of living to go along with those minimum wage jobs. Oh, and God forbid the team actually play well, or none of those workers will be able to afford a ticket to a game, let alone a $75 “officially licensed” jersey with the name of their favorite player emblazoned across the back.
Fourth, we already have an arena, and it seats 17,000 people. That is one seat for every 35 Seattleites. This is more seats than the average attendance of Sonics games for any season since the team’s inception. I still have no idea why we need more seats.
All of that being said, if it’s not going to come directly out of my pocket, well, I can’t very well maintain a crusade against the thing.
The public bonds thing is a common way for politicians to say that it won’t cost taxpayers a dime. It’s a lie.
Why have the city or state float bonds instead of the team going to the private investor market for direct loans? Because the city can get lower interest rates than the team could. Why? Because the city is less likely to default, so is a less risky investment.
If the team fails to make as much money as they expect, and miss a payment, who’s on the hook to repay the owners of the bond? The city. It’s like co-signing a loan for someone else. If you think you’re not actually responsible for the debt, you have seriously misunderstood the situation.
But the team would never default, right? Wrong. It has happened many times before. It happened in Minnesota, where I used to live, on the Target Center for the Timberwolves. “Default” doesn’t mean going bankrupt, it can mean missing just one payment, as on a mortgage.
Look at it this way: If the investment bankers of the world believed that the risk of the team defaulting on a big loan was zero, or as close to zero as the city’s risk, they would offer the team the same interest rate as they offer the city. But they know better. They know that teams have defaulted in the past and will do so in the future. Hence the higher interest rate, which the team owners want to try to avoid paying. They want YOU to make up the difference, by accepting some of the risk.
I like Nick Gillespie’s observation: “Politicians have an edifice complex, and they love giving money to sports stars and celebrities and billionaires.” See: http://reason.com/blog/2011/10/05/a-great-recession-silver-linin
Officials here in Hamilton County ( cincinnati) convinced enough voters that we “had” to have a football team once upon a time and we started building stadiums for them to play in. The latest monument to our stupidity has been widely recognized as one of the worst deals for voters and best deals for a sport owner ever conceived. Our taxes also pay for repairs and upgrades. We have yet to make a penny. Mike Brown, however, has one of the most profitable franchises in pro football while consistantly fielding one of the worse teams the NFL has ever seen. Great isn’t it?
Oh, by the way. I don’t know how it works in other places as i would never support a pro sport team (no i don’t watch on tv either), but you have to buy the right to buy a season ticket. That is, before they will sell you a season ticket you have to pay something like $1500.00 each year to qualify for season tickets. What a bargain!
Just sayin.
What happens to Key?
Looks like they do a regular business now but when the shiny new place shows up in town how many of those events move to the new arena? How many of the jobs move to the new arena when there is less work at the old arena?
I think the lifespan of most arenas is 10-15 years before they want something new to draw teams and people in. I am not so sure that is a good thing.