Seattle study showing SoDo arena fiscal winner actually doesn’t show that, says study author

I’ve had this study of the projected economic impact of the two competing Seattle arena proposals bookmarked for a couple of weeks now, waiting for a chance to dig into it to see what it actually says. Since I’m on the road now, I’m especially glad that the Seattle Times’ Geoff Baker has gone and done it for me, with the upshot of: Even the economists who conducted the study say it doesn’t really declare either plan the winner.

Chris Hansen and his Sodo arena group paid $16,000 for the “Seattle Arena Public Finance Analysis” study by UW Evans School of Public Policy and Governance professor Justin Marlowe and three graduate students. Sodo arena backers trumpeted the 3-to-1 advantage.

But a review by The Seattle Times found a high potential for fluctuation in the study — including use of raw property and sales-tax data without deeper “opportunity cost” context, an approach two sports economists say favors the Sodo group’s proposal

Up to now, though, the study’s claimed 3-to-1 advantage for the Sodo site — a gap Marlowe pegs at $68 million — has garnered the most attention.

“I get why everyone is focused on that number,” Marlowe said. “But again, the second part is the really important part. What if what’s on the table changes? Then you get different numbers.”

In short: The “opportunity cost” bit is that the study assumes nothing else would be built on the Sodo site without an arena, and if something were, that would generate tax revenue that would make redoing KeyArena look better by comparison. Also, the study didn’t account for payments in lieu of property taxes that the Key developers would be responsible for on the value of their improvements to the property — which could be as much as $657,000 a year (present value in the neighborhood of $10 million), or could be less, nobody really knows.

In short: Who the hell knows? This is one problem with economic projections: They’re inherently guesswork, and sometimes the error bars overlap to such a point that there’s no clear winner. This is actually kind of a good sign — it means that having a bidding process for a new/renovated arena has both developers upping their packages to be in the same range — but it also doesn’t make the decision any easier. It may come down to which site city officials decide is the best location from a planning standpoint for an arena, since the cost will be roughly the same; or to which site has the most politically connected people pulling for it, which would be disappointing but typical, and really not the worst thing since at least neither plan is much worse than the other. (Though it’s still entirely possible they’d both be mild money losers for the city — which would also be disappointing but typical.)

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8 comments on “Seattle study showing SoDo arena fiscal winner actually doesn’t show that, says study author

  1. Geoff Baker of the Seattle TImes is LOATHED in Seattle. He has a very biased opinion against the SODO Arena, because his paper and the Port of Seattle have constantly tried to undermine an arena in SODO because they prefer a remake of Key Arena. Geoff has lied over and over again in his columns.

    1. He’s mostly loathed by people who would rather be cheer leaders for the SoDo project. If regular readers of this blog should take anything from these articles, its that you should be extremely wary of anything that comes from the people trying to sell their projects to the public. Geoff Baker takes the SoDo project to task for a few issues (including this study which the Sodo group paid for…) and he gets painted as “Totally biased in favor of Key Arena!” He lies does he? Point to his untruth and sue him for libel then…

      1. Also, he’s mostly just citing Victor Matheson here, who doesn’t have a dog in this race.

        I’ve met Geoff, and discussed Seattle arena politics with him, and I think he may be marginally more inclined to give the Key plans the benefit of the doubt if only because SoDo has gotten so much of the publicity. That said, I can’t see him misrepresenting the facts on the ground just to make one arena plan look better than the other. He has a perspective, as does everyone, but he’s a solid journalist.

        1. I see the biggest issue by far as accessibility. There is already transportation infrastructure in SoDo, in no small part because of Safeco Field and CenturyLink Field. You can get there by light rail, Amtrak, Greyhound, Metro, Sound Transit, etc. Far from perfect, but you have options. The Seattle Center, on the other hand, is a traffic quagmire getting worse with the influx of Amazombies moving into that area. No light rail, no Amtrak, no Greyhound…there IS monorail from downtown, but that’s no easy journey either.

          I grew up going to Sonics, Totems hockey and SU Chieftains basketball games at the Coliseum as well as original Sounders games next door at Memorial Stadium. Great memories, but that was decades ago when Seattle Center and Lower Queen Anne Hill were fairly navigable. That’s not really the case now and renovating the Coliseum won’t do a thing to aid the ongoing traffic gridlock there. But the City owns both the Coliseum AND Seattle Center, so there’s no doubt in my mind what’s coming. Hard not to see this debate as anything but moot.

          1. Yeah, it would have been nice if Chris Hansen hadn’t instantly brushed aside Sally Bagshaw’s suggestion that he lease the Seattle Center grounds for $1 a year for a new arena.

            Of course, if they’d stopped trying to get $120-200 million in public kick-backs long ago and tried to go all private from the beginning, I bet he’d have an approved arena permit long ago.

      2. MT Phoenix introduced by Geoff Baker was complete BS.

        1. @ChefJoe: Chris Hansen brushed aside Sally Bradshaw’s suggestion because despite what he tells people on radio shows, It’s NOT about a civic duty. it, in fact, IS about profits, & the more free money he & Wally Walker can get for that objective, the better. We also presented Chris Hansen & Wally Walker a plan that gives our Citizens & Fans the ability to be direct investors for the arena, that’s a pretty powerful option to have & a direct way to engage the fans & citizens in a “Civic” manner. They also rejected our plan & even worse, were threatened by it & attacked us, as it would take away profits from their game plan. So “Civic Duty” – THAT”S Complete BS. Free money from naive & stupid taxpayers for profits – that IS the game plan. & Oh yeah, you think they aren’t getting subsidies – Wrong !! They still are,.. via TIF’s & other tax favorable offers from out state legislature. => More Free Money for the Deal => Do your research & find out.

  2. I always snicker at Seattle considering this arena was “shovel ready” when they tried to steal the Kings.

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