Mariners owners still demanding $180m in lease subsidies, or else … something

The fight over the Seattle Mariners‘ lease is heating up, with team execs insisting they won’t sign a 25-year extension on their Safeco Field lease that expires this winter unless they get $180 million in county hotel tax money to use on maintenance and upgrades, and Seattle officials going, Wait, what? Let’s start with King County councilmember Dave Upthegrove, who says that now that the Seahawks‘ stadium is about to be paid off, the hotel tax money that funded that can be used for something else, such as housing:

“There is no reason they would walk away from a business enterprise that is generating so much wealth for them. The threat is nonsense,” Upthegrove said.

“We have a simple choice,” he continued. “We can invest this money in public needs, or we can use it to allow these business owners to make even more money.”

To which Mariners executive vice-president Fred Rivera responded:

“This [stadium] is owned by the county, and the question is how much should the county pay for its building?” Rivera told Seattle Weekly on July 20. “The discussion [between the Mariners and the PFD] was ‘What’s a fair amount for the club and for the PFD to contribute to make sure that those nuts-and-bolts items are appropriately taken care of over the next 25 years?’ and that’s what resulted in this financing plan.”

Rivera also said that, if the allocation isn’t made, that they “would have to go back to the table” with the PFD and “determine how the publicly owned stadium will be kept in a first-class condition.”

That’s an interesting pair of arguments, coming down to: Hey, it’s the public’s stadium, the public should pay to keep it in good shape but also You don’t wanna know what we’ll do if you don’t give us this money. On the former, while technically yes, Safeco Field is owned by the county, that was a bookkeeping dodge designed, as it is with most publicly owned stadiums, to get the team out of having to pay property taxes — the Mariners owners control all the stadium revenues, so it’s a “publicly owned stadium” solely on paper.

And on the latter, it’s not entirely clear what the M’s owners can do if their bluff is called — as Upthegrove notes, they’re profiting immensely from paying in Seattle, so moving to, I dunno, Portland would be cutting off their nose to spite their face. As I told Seattle Weekly:

DeMause points out that the Mariners aren’t exactly negotiating from a position of absolute strength given the organization’s historic roots to Seattle. “Yes, Seattle wants the Mariners to sign a lease extension. But at the same time the Mariners need to sign a lease extension, because where the hell else are they going to go?” he said. “It’s not like there are a whole lot of great markets outside of Seattle.”

In any event, Rivera says if the lease subsidy is rejected, the Mariners owner will sign a five-year lease extension, and won’t threaten to move: “There is no thought of the Mariners leaving Seattle. I want to be absolutely clear about that.” (Unless this was meant as a non-threat threat, which, maybe.)

Here’s an idea, then: Whichever public officials end up negotiating this lease, whether now or five years from now, how about instead of arguing about how much of a subsidy to give the team, ask the team owners why they can’t pay more rent than $2.2 million a year, or share some stadium revenues with the public? After all, if the Mariners are just tenants, rents in desirable neighborhoods do go up, and they’d be hard-pressed to find other digs with all the same amenities (48k rms, rtctbl rf). Two can play at lease hardball.


27 comments on “Mariners owners still demanding $180m in lease subsidies, or else … something

  1. I thought that the new stadium would be the catalyst for a World Series championship? It seems like they were more competitive in the prior stadium.

    • With all the new stadiums built the last 25 years, I’m surprised we’re not seeing a dozen World Series champions every year.

  2. Seattle (market size 14) could try to leverage Portland (22), Charlotte (24) or Vegas (42) to exto…err incrementally increase public investment.

    Charlotte is stupid enough to let themselves be used as a stalking horse I’m not sure on Portland. I think the idea of baseball in Vegas and that new Raiders stadium boondoggle probably put Vegas out.

    Won’t the Mariners be competiting for public largess against NHL/NBA proposals?

    • Unless the new AAA stadium in Vegas is expandable like Buffalo’s was/is then I doubt Vegas will be getting a MLB team anytime soon.

      Also they were barely supporting the Las Vegas 51s as it was, old jank stadium be damned.

  3. The negotiations are with King County, not City of Seattle. Dave Upthgrove is a county council member.

    • Thanks, my bad, will correct! Most other states call county officials “commissioners” or somesuch, hence my confusion.

  4. I would love for Seattle to not only call their bluff but to put them in a time out corner for a year if possible.

    Go spend a year in Montreal’s white elephant and think about what you did Mariners.

  5. Because of the fervor and rabid fans in Montreal, I heard Montreal will be getting 2 MLB teams, a Lacrosse team, women’s basketball, NASCAR and Tonya Harding is will be purchasing land for a new skating rink.

  6. Sure, it’s true that there aren’t any ‘better’ markets than Seattle for the M’s to move to. But sports owners do not function on the basis of rational arguments.

    There was no rational reason for anyone to bribe the Atlanta Braves (and their massively wealthy media company owners… who managed to find enough left over profit to buy Formula 1 a few years ago) to “leave” Atlanta. Yet leave Atlanta they did for a new facility in an adjacent (?) county which is more difficult for most fans to get to (if I am hearing the complaints accurately) than the former Olympic stadium in ATL was.

    Since they weren’t moving out of district, they didn’t need MLB approval to change territory, nor did they need to change their host city name. I think we can easily see how this type of thing could be played out 3 or 4 times in most MLB host cities with a surrounding suburban population.

    So while I agree that the M’s would be crazy to leave Seattle, it would not surprise me to see some discussions (and maybe more than that) take place between the team and adjacent economic no hoper counties looking for something, anything, to hang their hat on.

    As long as we have regional governments bidding against each other to lure marginal economic drivers like sports teams, expect sports teams to take full advantage of that fact. Your Cobb County Braves are a prime example of this at work (and there are others, of course).

    • The lease is with King County, though, not Seattle. Would the Mariners really want to move to Tacoma or Puyallup, you think?

      • I don’t think they would want to… I doubt the Braves marketing staff really ‘wanted’ the club to move to Cobb County (based on tv images of attendance, it doesn’t seem to have been a bums-in-seats-winner). But the people at the top end of the corporate ladder make those calls… and they find it hard to turn down a brand new no rent stadium with free upgrades anytime you want them (and holographic displays).

        All they really have to do is use a potential deal somewhere else in the region as leverage, of course. They don’t actually have to take it if the locals come up with more cash (or preferably a bottomless well of cash).

        Makes me wonder if the Braves started out their dalliance with Cobb County expecting that Atlanta would immediately surrender to them.

        • Plus the Seattle Mariners of Humptulips (or maybe Snohomish) has a nice sort of Angels ring to it, don’t you think?

        • I’m pretty sure the Braves just wanted a hotel and apartment complex and a few restaurants and bars. Seems like the hotel and real estate development was more integral than the business location of actually playing baseball.

  7. The Mariners and King County have a cumulative profit sharing provision in their lease agreement but it just so happens that the Mariners lost hundreds of millions of dollars in the years prior to SafeCo being completed and have never climbed out of that hole.

    I’ve also read that the 5% admissions tax generates $4 million or so a year for the County and that up to 10% admissions tax is authorized. I’d be fine all the money for SafeCo came from a 10% admissions tax (which generally squeezes ticket profits).

    leg.wa.gov/JointCommittees/Archive/LFOKC/documents/2008-07-16KingRevenueStreams.pdf

    • That’s the general ticket tax on all big venues, no? So King County would still be collecting it even if the M’s still played at the Kingdome (or in Issaquah)?

      • They worked out a property tax authority thing, since Seattle voters had rejected the stadium. King County got to charge their 5% admissions tax even though it’s in Seattle’s territorial boundary. If they go ahead and build a new stadium out in unincorporated king county, the county would still get the admissions tax money.

        I’m not really sure what the specifics were on the Kingdome site… way before I paid attention to government.

        dor.wa.gov/sites/default/files/legacy/Docs/Reports/2016/Tax_Reference_2016/TRM_17LocalAdmissions.pdf

        “1995 An exemption from Seattle’s admissions tax for the new professional baseball stadium and the 10 percent county tax for events at the baseball stadium were adopted.”

  8. I like provision 7.7.5 which is about the building being damaged such that it would have a 20% repair cost in the last 3 years of lease gives them an “out”.

    Maybe they’re hoping for a big earthquake/fire/riot after winning a playoff spot?

    hwww.ballpark.org/pdfs/WSMLBS%20PFD%20Lease%20with%20Baseball%20Club%20of%20Seattle.pdf

  9. “Two can play at lease hardball.”

    Maybe you could make this the new name for your site, to try to get the point across? Because it’s rare that a governmental entity shows any evidence of understanding the concept.

    I guess it’s incompatible with the “gotta try to make everybody happy all the time” mentality of your average elected local official? Cities, counties, states everywhere are suffering mightily from lack of negotiating skill. Maybe not a lack of “skill”, just willingness.

    • I’d say willingness, Keith.

      When a county or state wants to build a bridge, the councillors or commissioners don’t automatically designate themselves bridge engineers.

      But when the topic is negotiating sports stadium deals or leases in general, they all seem to think they (or their management/administration designate) are fully qualified and skilled negotiators…. despite all the evidence to the contrary.

  10. King County doesn’t own Safeco Field. It is owned by a Public Facilities District created by the State of Washington. You are correct that the current lease includes a profit-sharing provision, but the team owners were able to write off (not count) their $200 million+ in profits because they used it to pay off previous debt. Now that their debt is paid off, the new proposed lease eliminates the profit sharing provisions. The current lease also requires the Mariners to maintain the facility. Despite their ability to maintain the facility and still make $200+ million (not to mention $1 billion in equity gain) over the term of the current lease, the team owners now want to the new lease to have maintenance covered by taxpayers. Oh, and all of the tax proceeds from parking and ticket sales already go to subsidize the stadium. Oh, and they don’t pay property tax. Oh, and the Mariners have a sweetheart deal on “rent” (way way way below market).