Seattle Times reporter Geoff Baker warns that Chris Hansen’s mostly privately funded arena proposal could be in trouble if President Obama follows through with his plan (re-introduced in his 2017 budget but as unlikely to pass Congress as it was last year) to ban the use of tax-exempt bonds for pro sports venues:
Obama’s measure could also have a more immediate impact on the debate here over entrepreneur Chris Hansen’s proposed $490 million arena project in the Sodo District…
It’s not clear if those bonds would be the tax-exempt variety. That’s to be determined, but it’s a safe bet a substantial portion will be.
Um, no, I don’t think so? It’s already illegal to sell tax-exempt bonds when they’re being paid off with anything other than “generally applicable” taxes (rent doesn’t count), which means that at most there could be about $100 million in tax-exempt bonds. Even if you knock, say, 1.5% off the interest rate for that thanks to the tax exemption, maybe that would save $10-15 million in present value. It’s not a deal-breaker by any means, in other words.
Way more significant is the item buried deeper in this story (though addressed in detail by a longer Baker piece on Sunday), which is that a consultant’s report that Key Arena could be renovated to accommodate both modern NBA and NHL needs for $285 million — $200 million less than the cost of Hansen’s proposed arena — was delayed from its planned release last May, apparently so that it wouldn’t trip up final approval of Hansen’s arena plan. Which, you know, it’s a consultant’s report so the usual grains of salt apply, and no actual developers have said they’d undertake a Key Arena renovation (though if they knew it was an option, who knows?), and if Hansen wants to go build a new arena with his own money (again, mostly) it shouldn’t be much skin off Seattle’s nose if he could accomplish the same for cheaper with a Key renovation … still, it seems worth exploring, at least.
There’s a public hearing on March 15 on yet another city council action needed by Hansen — I know I said “final approval” above, but there’s apparently always still more approvals, this one for closing streets — so maybe this will actually get openly debated. Probably not, but Seattle has a decent track record of actually grappling with these issues, so maybe, even if Nick Licata isn’t around to grapple with them anymore.