Politics The Sonics’ 6th Man: The Screwed Taxpayer
This morning’s PI reports that the legislature may be willing to extend the hotel, motel, and restaurant taxes (currently paying off Safeco and Qwest) to renovate Key Arena and keep the Sonics in town.
This is disappointing. The legislature laughed at the idea last year. Giddy with Seahawks mania, it looks like the legislature is ready to subsidize Sonics owner Howard Schultz’s $200 million plan.
Fortunately, the city council (led by Nick Licata) seems to be against publicly financing the Sonics—and with good reason: Taxpayers are getting screwed on the current deal. Hopefully, they will torpedo this blatant bit of corporate welfare.
We shelled out $75 million ten years ago for a Key Arena update, and instead of getting paid back (the Sonics are supposed to pay us about $7million a year), we’re covering the Sonics to the tune of about $2.5 million a year.
The PI is misleading on this point saying simply that the poor Sonics only get 40% percent of the revenue on luxury seats and must shell out the remaining 60% to the city. What they don’t say is: That 60%—which was the carrot to the city when we loaned the Sonics $75 million the first time out—isn’t enough to cover the debt service (which overall totals about $140 million)…and so, the city is continuing to loan the Sonics more money. That debt service doesn’t expire until 2014.
Even worse: The restaurant portion of the tax is infuriating. The Key Arena revamp is a cookie cutter design straight from the NBA’s playbook. The idea is to create a sort of one-stop entertainment mall in the stadium. Yuppies—who can afford the outrageous ticket prices—will drive into Queen Anne, park in Key Arena’s expanded lot, eat, drink, and buy in the expanded Key Arena, watch the game, and then leave—never having set foot in the neighborhood. Local Queen Anne bars and restaurants, which will still be paying off the Key Arena expansion, will essentially be paying for their competition.
State Sen. Erik Poulsen (D-34, W. Seattle/Burien/Vashon) told the PI: “We’re talking about extending an existing hotel and motel tax—big deal.”
Here are two columns I’ve written about the damn Sonics scheme in the past year.