One of the mysteries of Chris Hansen’s proposed Seattle arena deal is how it would get $15 million in incremental arena property taxes kicked back to help pay for construction, when the arena would be owned by the public and hence be exempt from property taxes. Now, a sharp-eyed (and -eared) FoS reader points out that at a city council hearing back on June 6, Seattle city officials admitted that those taxes would actually be paid by Seattle residents, not Hansen. Transcript of the key bit:
Councilmember Tim Burgess: Now are we counting the property tax in these—?
Seattle Deputy Budget Director Hall Walker: Yes.
Seattle finance aide Mark Ellerbrook: Yes. The 6.7 includes the property tax.
Burgess: Since the city has the land and the building, actually ArenaCo and Hansen are not paying any property tax. That’s gonna be tax-exempt facility.
Walker: They would be paying property tax on the—
Burgess: On their personal stuff that’s in there.
Walker: Which is not insignificant.
Burgess: But the rest of the city’s property tax owners are, in a sense, going to subsidize directly up to 780,000, or million, or whatever it is for this facility. Correct?
Burgess: So it’s not true that this is not costing the taxpayers of the city anything.
Ellerbrook: The property tax piece gets covered by everybody else.
This is contrary to how the Seattle Times reported it at the time, which was that “taxpayers will have to make up what the arena owners won’t pay in property taxes,” implying that they’d have to fill in the gap in the general fund left by the arena’s tax exemption. In fact, Seattle taxpayers would be paying up to $15 million in property taxes (in present value, according to the city’s own figures) into the arena fund — which on top of the arena’s tax exemption means that Hansen would be effectively double-dipping on this subsidy.
How does that change the overall Seattle public cost figures? It’s hard to know exactly how much Walker’s “not insignificant” property taxes on “personal stuff” would add up to, but it’s hard to see it being more than a small fraction of the total arena value. Adding an additional, let’s say, $12 to 15 million in public cost means Seattle taxpayers can now expect anywhere from a $2 million gain to a $21 million loss on the deal, after all the tax breaks and value of the arena land are taken into account. That’s still not a huge loss, but it’s slightly less sunny than the roughly break-even result that was projected earlier. And it probably knocks Hansen’s plan to a spot behind the San Francisco Giants‘ Pac Bell Park for “most equitable stadium or arena deal ever,” if you’re scoring at home.
In other Seattle arena news, meanwhile:
- The West Seattle Chamber of Commerce has come out against a SoDo location for an arena, which if you’ve ever driven to West Seattle should be no surprise. (The West Seattle Chamber of Commerce would probably be happiest if all of SoDo were replaced by a 100-lane highway. Or maybe a transporter pad.)
- The King County council has moved the arena bill from committee to the full council without a committee vote, which could mean that the county will vote on the plan as early as next week. Or, as some members of the Seattle city council think, that the county doesn’t have the votes lined up yet for the bill and is just trying to put pressure on the city council to hurry up with its own bill. One or the other.
- Wayne Gretzky has been sighted in suburban Bellevue talking with “officials” about “NHL possibilities.” Presumably Mario Lemieux wasn’t available.