Key Part Of Stadium Bill Thrown For Loss Merchandising Companies Among Foes Of Sports Tax

Billionaire Paul Allen’s financing plan for a new Seattle Seahawks football stadium stumbled on the 50-yard line Thursday as owners of other sports teams and merchandising companies rallied on defense.

Two House committees were caught in the middle of a lobbying blitz as Allen’s Football Northwest clashed with other sports industries over a proposed tax on licensed sporting goods that would help pay for the $425 million stadium and exhibition center.

The industries, represented by the new Coalition Against Unfair Stadium Taxes, gained the advantage by announcing that 60 of the House’s 98 members have signed a pledge to delete the 2.5 percent excise tax on licensed sporting goods from the plan.

Removal of the $98 million tax would leave a huge hole in the public’s $325 million share of the project.

Coalition members said the tax mostly would affect children who collect posters, T-shirts and caps bearing the logos of their favorite teams. While all said they support Allen’s bid to buy the Seahawks in order to keep the team in the Northwest, CAUST members complained that the tax amounts to subsidizing the costs of a competitor and would be difficult to administer.

“We think admitting this tax would be awkward, costly and error-prone,” Kent Rowe of J.C. Penney Co. told a joint meeting of the House Capital Budget, and Trade and Economic Development committees.

“Clearly, this is not a user tax. It is a tax by association,” added Tock Costacos, owner of Costacos Brothers Sports Inc., a Seattle poster company.

The Senate narrowly approved a version of the plan last week. House Speaker Clyde Ballard, R-East Wenatchee, has said the bill, SB5999, will go straight to the House floor, probably early next week, if Allen’s team of lobbyists can prove they have the minimum 50 votes needed for approval.

The 60 signatures on the coalition’s letter indicate they’ve got a serious problem. House Appropriations Chairman Tom Huff, R-Gig Harbor, is the highest ranking lawmaker on the list.

Despite the setback, Allen and Gov. Gary Locke are sticking with the plan they developed. Other elements of the financing package include lottery games, higher fees on stadium admissions and parking, and a $100 million contribution from Allen that would include the sale of “personal seat licenses” and his own money.

Allen and Locke back the sports tax as a way of charging people who would benefit from the stadium - in this case, sports fans. They hope some House members who signed the CAUST pledge will change their minds after studying the whole package.

“If you ask legislators an openended question about taxes, well, most people are against taxes so the automatic response is, ‘I’m not for it,”’ Allen spokeswoman Susan Pierson said. “It’s important to understand the context that the tax is in.”

Allen, the Microsoft co-founder, has said he won’t buy the team from California developer Ken Behring unless the public helps pay to tear down the Kingdome and build a more profitable stadium. Behring tried to move the team out of state last year.

Allen has until July 1 to exercise his option to buy the team, but the situation is becoming more urgent because he has promised to let Washington voters have the final say in a June election. The state needs about 60 days to set up the election, which was originally proposed for June 3 but recently was shifted to June 10.

Rep. Steve Van Luven, a Bellevue Republican whose district includes the team’s Kirkland headquarters, said the coalition’s campaign against the sports tax shows it’s finally time for Allen and Locke to drop their hard line and develop an emergency plan.

Van Luven has spent weeks telling anyone who would listen that the sports tax faced tough opposition in the conservative House.

The coalition is looking for a come-from-behind victory.

The group formed just weeks ago, and faced an uphill fight with Allen, who has spent millions since joining the campaign to save the Seahawks last year.

The coalition’s members now range from mom-and-pop sporting goods stores to sportswear giant Nike, from the Yakima Bears and Sun Kings to the Seattle SuperSonics, and from the Northwest League of Professional Baseball to the National Hockey League and the National Basketball Association.

MEMO: This sidebar appeared with the story: AGAINST SPORTS TAX Sixty lawmakers have signed a letter opposing the sports tax element of the stadium bill, as of Thursday afternoon. Local lawmakers who signed are: Brad Benson, R-Spokane Jeff Gombosky, D-Spokane Mark Schoesler, R-Ritzville Larry Sheahan, R-Rosalia Duane Sommers, R-Spokane Bob Sump, R-Republic Mark Sterk, R-Veradale By Hunter T. George