Risk Free? Seattle stadium proposal has lots of complicated issues |Editorial
August 2, 2012 · Updated 2:31 PM
We’ve always known that there’s no such thing as a free lunch. It also seems that “risk-free” isn’t actually that either.
A report from the good-government group The Municipal League, says the proposed NBA/NHL stadium being talked up in Seattle does indeed come with risks and may not be self-financing as backers say.
Hedge-fund manager Chris Hansen, along with the mayor of Seattle and the county executive are proposing a $490 million arena that would include $290 million in private money with the public putting up $200 million in public bonds. That public portion would be repaid through arena taxes and revenues.
As the League rightly points out, if people just shift their entertainment dollars to the new arena from other out-and-about activities, both the county and Seattle have a problem.
Revenues from the arena go to arena expenses. The money no longer being spent elsewhere means there’s less taxes for the county’s and Seattle’s general fund. Maintaining current services likely would require higher taxes all around.
The League notes one other concern. If Hansen and his partners were to default on the deal, taxpayers would be stuck paying off the bonds.
The League study concludes by noting that “This is a complicated proposal with many moving parts. Making it work well will require careful consideration of many choices and details.”
- Craig Groshart, Issaquah & Sammamish Reporter