Yes. Built in 1994 at a cost of about $92 million, with some $74 million of bonded indebtedness, Key Arena has had a shelf life hardly longer than canned beans. Now, they tell us Key Arena was supposedly obsolete the day it opened for business.
Click here to read how the project was described by its constructors at the time, a short eleven years ago.
The financial structure for payment of the bonds by revenue generated at the facility through luxury box seats sales has failed. Now the Sonics, who were responsible for those sales, and whose principal owner is undoubtedly one of the world’s best marketers, say they cannot sell the high priced luxury seating that is responsible for debt service on the facility. So the Sonics want the City of Seattle to pick up the tab.
The demand for tax subsidies for professional basketball at Key Arena has many other factors driving it. The team payroll has ballooned in the last year from $34 million to $50 million. Check out the Sonics payroll here. The Arena has to compete with Safeco Field and Qwest Field. Despite lavish salaries that are competitive in the league, the team languishes.
The Sonics not only want the taxpayers to pay that bill still outstanding from 1994, they want an entirely new facility. That facility will have about 900 more seats (475 of which are standing room only), even fancier luxury suites, a practice arena, and a bigger concourse for restaurants and other facilities that get people to spend more money. Those new businesses will compete with other private businesses ringing Seattle Center. And the Sonics want to control the new Arena, keeping nearly all the money from all the events–not just basketball. But to make the proposal palatable, they’ve thrown a bone to the arts–about one in seven of every dollar raised by the proposed tax increase will go to fund arts organizations in King County.
To get legislative support in Olympia, they tell legislators that the proposal really helps Seattle–that it gets rid of losses at Seattle Center that drain money from other city programs. This is the same logic that wasted the Kingdome–they argued that the Kingdome was a drain on King County’s budget. So they shift it to the capital facilities side of the ledger, with a tax increase on somebody else to pay the bill. That tax increase is real, it hurts workers, and it hurts–to quote a Republican or two–our children who will eventually pay it. This kind of self-indulgent, fiscally irresponsible policy-making helps nobody.
That tax increase slams restaurants, hotels and motels, and hits taxpayers directly through a county-wide diversion of sales tax revenue to the facility. See the House Office of Program Research Analysis here. And the proposal–House Bill 3233 and Senate Bill 6849–not only has no public vote–it eliminates the public vote on sports stadium remodeling projects in Washington State forever. The salt in the wound? Under the current proposal, tearing down the Kingdome and rebuilding it would have been a remodeling project. Had this proposal been law ten years ago, there would have been no Seahawks stadium vote, no Mariners stadium vote.
The playbook for the Sonics proposal is nearly identical to that of the Mariners. Claim losses, make threats to leave, hype the economic impact of the team. Shed crocodile tears about not being loved. Bring out a citizen’s report and economic analysis that shows how much money they contribute to the community. What’s worse, the consultants Seattle Center retained to tell us how to deal with Key Arena now, are the same ones who could not get it right, back then. Go figure. The strategy would be laughable, if it did not work, not only in Seattle, but in other cities throughout America.
That citizens report can be viewed here. One thing it does say is that Key Arena is viable without the Sonics. It also states that, at least with respect to Seattle Center, the problem is a $3 million per year problem. That begs a question, which it does not address, which is why the solution to that problem will result in the issuance of bonds, at a cost of some $10 million per year.
Because of the well voiced public outrage over it, this proposal did not make it through the legislature. However, the Governor and others are still trying to make a deal happen. It is imperative that you call or write your legislator, the Governor, and the King County Council and Seattle City Council.