This is an archived version of a Field of Schemes article. Comments on this page are closed. To find the current version of the article with updated comments, click here.
May 04, 2006
New Sonics renovation plan even murkier than the last
Seattle city council president Nick Licata has thrown a new proposal into the Seattle Sonics arena controversy pot, offering a plan to fund $20 million in KeyArena renovations as part of a package of arts and culture spending, funded by existing hotel, restaurant and car-rental tax surcharges. There are conflicting reports on whether Licata's plan would require a public referendum: The Seattle Post-Intelligencer says no, the Seattle Times says yes.
While $20 million is a lot less than the $200 million that the Sonics are asking for, Licata says that by also spending $45 million in tax money to pay off remaining debt from KeyArena's last renovation, the city would free up luxury-suite money that the Sonics are currently using on debt payments - saving the team, in Licata's estimation, between $7 million and $10 million a year. Which raises the obvious question: If the Sonics are spending $7 million a year to finance $45 million in debt, who's their banker? And haven't they ever heard of refinancing?
Also curious is that earlier this week, the council approved a resolution stating that in any KeyArena renovation plan, the city would need to turn a profit - which doesn't seem likely with a plan that commits $65 million in public money and doesn't gain the city any new revenue streams.
Finally, there must be good truth-in-advertising laws in Seattle, because the Sonics debate has turned up two remarkably blunt assessments of the sports facility biz from those inside it:
- According to the P-I, "Licata said that when David Stern, commissioner of the National Basketball Association, testified before a state legislative committee earlier this year, he warned that public officials shouldn't expect stadium facilities to last more than 11 or 12 years." Noted Seattle councilmember Richard Conlin: "That's rather frightening since the bond terms usually run for 20 years."
- Sonics VP Terry McLaughlin told the Times that absent government aid, new sports facilities are actually money-losers: "These arenas and stadiums are not profit centers on their own."
Print those out and stick them on your bulletin board, for the next time your city's team says a new home will guarantee it will remain lucrative and in town for the long haul.
