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Legislators Punt On Stadium Funding Promises Eleventh-Hour Maneuvering Means Much Of Financing For $435 Million Stadium Would Come From General Fund, Not Sports Fans

Fri., April 25, 1997

When Democratic Gov. Gary Locke asked lawmakers to go along with his plan to save the Seattle Seahawks, he said the $435 million cost would fall primarily on sports fans. And he promised there would be no hit on the state general fund.

Many versions of the plan later, even supporters of the plan admit neither is true.

The stadium bill still was being revised Thursday night. But in all likelihood, the plan lawmakers are expected to vote on as soon as today will depend on a slew of state tax credits, deferrals and exemptions, plus creation of lottery games, that will eat into the general fund to pay for the stadium.

“We will lose some tax revenue. There will be a public contribution to this project. We will be fools to pretend there isn’t,” said Rep. Barry Sehlin, R-Oak Harbor, chairman of the House Capital Budget Committee.

“The issue people will have to decide is if there is public value in keeping this team in town,” Sehlin said.

“If they don’t think there is, they should vote ‘no’ because there is a public cost. But fans, including people in Spokane, write to me and say there is value in keeping the team here.”

Sehlin said he plans to vote “yes” on the proposal, which most people expect to clear both houses of the Legislature today. If it does, the measure should go to a statewide public vote in June.

If the plan passes, it will be despite the concerns of some of the Legislature’s most respected financial experts, who call the bill a bad deal for taxpayers.

“The taxpayers got raped once. Why do it again?” said Rep. Helen Sommers, D-Seattle, referring to the $414 million baseball stadium lawmakers agreed to build in Seattle just two years ago.

Sommers is former chairwoman of the House Appropriations Committee and is the longest-sitting member of the House. “The taxpayer is paying through the nose for this,” she said of the football stadium plan.

The original financing plan for the Seahawks stadium included a tax on sports gear and memorabilia in an attempt to shift much of the project’s cost to sports fans.

But opposition to that tax in the Republican-controlled House killed it.

Instead, lawmakers are set to pay for the stadium with state general obligation bonds paid off primarily with a credit against the state general sales tax, with another credit against the state sales tax paid on hotel and motel rooms rented in King County and with the creation of lottery games.

That’s a hit on the general fund. But how big a hit, nobody can say.

It depends on how much money keeping the Seahawks in town would bring to the state general fund - money people wouldn’t have spent on other entertainment options if the team leaves.

Other lawmakers wonder how much people will spend on the state’s lottery games and scratch tickets that benefit the general fund when games are added to pay for the Seahawks stadium.

There are many aspects of the deal that make it a good one for Paul Allen, the Microsoft co-founder who says he’ll buy the team if he gets a new stadium.

Under the financing plan, Allen won’t have to pay sales tax on construction of the stadium, state sales taxes on parking at the stadium or the tax usually paid by private tenants renting a public facility.

Allen also would get to keep the money generated by sales of personal seat licenses other than $50 million which he may put toward his $100 million contribution to stadium construction.

The Mercer Island billionaire would get all the revenue from stadium naming rights and license and concession agreements, plus an open-ended percentage of revenue from stadium operations.

Bonds issued for the stadium also would be exempt from the state debt limit. Otherwise, a third of the state limit this year would be chewed up with just one project in one town.

Instead of using any excess revenue to retire the stadium debt early, additional money raised by taxes dedicated to the stadium would be spent on community ball fields or placed in a reserve fund.

That’s partly to help garner votes from lawmakers who aren’t wild about pro sports but want to do something for kids.

The state also is positioned to get only a modest 10 percent of the selling price of the team if 90 percent of Allen’s interest in it is sold within 25 years. If he sells a fraction less than 90 percent, the state would get nothing.

And there’s a clause in the bill that allows lawmakers to come back and adopt more taxes or fund shifts for the stadium if they discover they don’t have enough money to pay off the bonds.

Some lawmakers already are concerned a loan will be required from the general fund to make the financing plan work. They argue the deal depends on an unrealistically low interest rate to pencil out.

Rep. Alex Wood, D-Spokane, said he doesn’t like the bill because it sets a precedent of allowing an individual to pay money to stage a statewide election.

Allen is putting up more than $3 million to pay for a special election on the stadium issue. Usually if citizens want to bring any matter to a public vote, they have to gather hundreds of thousands of signatures to petition it onto the ballot. They can’t just write a check and set a date.

Allen insisted on putting the stadium plan on the ballot so voters can decide if they want to keep football in Seattle. If the measure fails, the bill specifically outlaws another try.

“There’s just no way I can vote for this,” said Rep. Ruth Fisher, D-Tacoma. “They haven’t persuaded me there’s no state money in the bill, and, in fact, this version is even worse. The state has many more important needs, and buying a stadium for a billionaire is not one of them.”

Rep. Steve Van Luven, R-Bellevue, prime sponsor of the bill in the House, admitted it has some flaws and involves some risks. But he said he is optimistic lawmakers will approve it today in both houses.

“You get what you can get. Overall, this is a good deal.”

, DataTimes


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