Saturday, February 14, 2009

Hunter, Chopp, Closer to KeyArena Solution

As noted in a prior story, on February 12th story No buzz about NBA returning to Seattle AP Reporter Tim Booth had unknowingly passes along the missing piece in the arena puzzle to KeyArena rebuild hopefuls like me.
The reporter, Tim Booth, summarized Washington State House Finance Committee Chairman Ross Hunter, D-Madina, statements thusly, "he was working with House Speaker Frank Chopp, D-Seattle, on a plan for stadium funding that everybody can live with, but wasn't willing to disclose any details."

In the past 3 years Frank Chopp has been in to opposition to stadium and arena solutions that involved the state, even when the revenue did not come from the state's general fund. Speaker Chopp and others were so dissatisfied with the relationship between state-wide priorities and the local community needs of anything in King County (and Seattle) that a state task force was formed to construct a solution.
Joint Task Force Local Financing Options for King County had been formed, with Ross Hunter as a co-chair, and Washington State senator Ed Murray as a member. The task force was presented with a variety of proposals to use the county-wide hotel/care rental/ restaurant tax, as well as the Seattle only hotel tax. Some of these locally collected taxes have state sales tax credits contributing to their funds.

Unfortunately the task force did not produce a report of recommendations of what the locally collected funds should be spent on, with Mr Hunter commenting to a Tacoma News Tribune writer that there isn't a natural jurisdiction for this situation.

As Mr Hunter stated back in December in the Tacoma News tribune, his personal preference is that the state sales tax component goes back to the state. Mr. Hunter was quoted in Friday's web edition of the Seattle PI as reiterated that same preference for returning the state's portion back to the state.

Here are some key quotes, with my commentary interspersed:

"I think I've got something that will work here," said Rep. Ross Hunter, D-Medina and chairman of the House Finance committee. "I am very close to releasing a plan."

Hunter would not offer specifics, saying he is awaiting approval from House Speaker Frank Chopp, D-Seattle.

He said his plan would not include a penny of state money but would be financed entirely by money raised in the city.

To a great extent this was the idea all along, what I think is useful is that he is being quoted in public explicitly stating the position before the inevitable argument is made by sports haters. How he constructs this is still largely unknown.

Hunter said he has no problem allowing the city to impose its own taxes but feels no pressure to enable Seattle to cash in on the bonus [from Clay Benett].

"I would go out of my way to figure out a way to take $30 million from those guys in Oklahoma City. I would go out of my way to do that just for the fun of it, just for the sport," Hunter said. But "the fact that Seattle has negotiated a deal that (is meant to) force me to act is not attractive to me."

Mr. Bennett named Mr. Hunter and Mr. Chopp as the people that stopped Bennett's quest for a free 500 million dollar stadium to be built in Renton Washington.

Seattle had asked lawmakers to allow the city to tap a local hotel and motel tax surcharge that is used to pay off previous work at the Seattle Convention Center. That tax source is raking in money more quickly than previously projected. But the idea of extending it to KeyArena does not have traction in Olympia, Hunter said.

It appears that Mr. Hunter will take back the state's sales tax component, while Ed Murray is proposing that the convention center proposal move forward.

"There is no appetite down here for fixing KeyArena with state dollars," he [Hunter] said.

Hunter said his plan would not rely on admission taxes, which are better used for facility maintenance. He hinted it might include money for affordable housing -- a pet concern for Chopp.

Despite its surplus, the convention center tax is not an option for KeyArena because it is partly funded through a state sales tax credit, Hunter said.

"I want the state's money back," Hunter said.

The credit costs the state about $10 million a year, he said. Without that portion of the convention center revenue stream, the taxes do not raise enough to overhaul KeyArena.

There you go, 10 million dollars, the one percent the City of Seattle was hoping to use is sort of being identified as the state's portion the convention center fund. Mr. Hunter has doubts about the convention center's proposal, and has sliced off 10 million dollars from that same fund.

Here is state's position, or at least Hunter's, as it relates to the City of Seattle, and the settlement between the city and Clay Bennett.

But he has no problem "getting out of the way" of local governments that want to make their own tax decisions, he said.

Seattle Deputy Mayor Tim Ceis believes a pair of motivations will encourage lawmakers to help the city, despite the Legislature's previous rejections of KeyArena tax proposals. One incentive is the $30 million payoff. The other is that the future of Seattle Center is to some degree tied to the health of KeyArena.

"Seattle Center is a more sympathetic issue than NBA basketball," Ceis said.

Still, the state faces a biennial shortfall of $6 billion or more, and lawmakers are facing cries for help from every corner.

"This is not an easy proposal for this legislative session," Ceis said.

Hunter said he would not be "embarrassed" into granting the city authority so it can chase the bonus. That provision was intended to put political pressure on the Legislature, Hunter said.

"You know, children do stuff like this," he said.

"So I feel no compulsion to act on this simply because Seattle has negotiated a deal without consulting with me beforehand. If it works out, it works out. If it doesn't, I'm sorry."

"I might have agreed to it ahead of time if they asked me but they didn't," Hunter said. "I just don't like that whole transaction."

This is the environment the lowly citizen (me) toils in while attempting to encourage the right people to do the right thing.

So, there is not going to be a specific KeyArena solution prescribed by the state, and absolutely not with any state funds. This is a broader problem requiring a broader solution that takes the state out of the role of deciding local issues where the state does not have a direct financial interest.

Hunter is separately working on broader legislation to reform financing of major facilities, he said.

Qwest Field, Safeco Field and the Convention Center were all paid for through a tax source deliberately set to raise more money than was needed -- to ensure better bond ratings, he said.

But that results in surplus funds that are inevitably raided by "rapacious" budget writers, Hunter said. Next thing you know, governments or programs are relying on that extra money for tangential needs.

Hunter is also keeping the details of that plan quiet until he can get Chopp's approval.

There you have it, the state government trying to get out of the way, out of participating in any way in stadiums and arenas.
This morning Brian Robinson at stating his feeling of hope.

Have a great day,
Mr Baker

(17% recycled content from prior stories)


Mr Baker said...

The state portion is out, so how is the question?

I'll throw out a few observations, and speculation:
Seattle does not get infrastructure from Seattle's hotel tax, the state does.
The hotel tax is collected county-wide at one rate for stadiums & such, and at a different rate in Seattle going exclusively to the convention center.
Hunter has doubts about the convention center's projections, so maybe he has a doubt as to the need for all of the Seattle hotel tax (less the state portion) going to just the convention center.
What if Hunter splits off the revenue from the Seattle hotel tax that is equal to the same % in the rest of the county and allows the city to use it in the same way the rest of the county will?

Mr Baker said...

I think Hunter can get some buy-in from Chopp and the rest of the legislators if he can get the state out of the equation long-term, that would mean turning over control of the county/city tax to the limited control of the county and city, forcing the stadiums to live within their tax generating means.
To get Chopp the rest of the way the arts component has to benefit children and families of ALL incomes (I am with him on that).
The legislation should, in the end, stop the county and city from going back to the state again for stadium funding.

The bonding and revenue return should be a closed loop from the city or county and back. That is what the city was planning, if they were allowed to keep the B&O tax (25 mil every 10 years) or some other state tax that would only exist if a team located here then that would be the most direct solution.

There is a limited amount of options, I can live with any of them.

Anonymous said...

Well according to the TNT our 7 billion dollar shortfall has been nullified:

Make what you will of this development.

Mr Baker said...

Direct support is half that, in Medicare & such and some public building upgrades Gregiore had in her capital budget, they will shift money around that is being picked up by the Feds to plug holes.

The other half includes jobs like stringing power lines to windmills, infrastructure the private sector wants but does not want to pay for.

This just slows the fall, the fed stepping in to put a floor under the housing market will be the other half.

There is a big discussion in Oly on what the state should really be in business to do, that's why sending the authority and responsibility of stadiums to the local taxing district is possible, it is not as if the city and county had not been asking for this for a couple decades, they have. The state control of things that have little to do with state-wide activity or economy should get trimmed down.

Anonymous said...

You dig "Television" eh? "Marquee Moon" is about as obscure as you can get this day and age. Don't get me wrong, I have a copy myself.

Mr Baker said...

when Brian says he feels unhappy or happy about the past few months, and what he has feelings about, I see the limits of what he is being told, not knowing gives him doubt, and that has made me think about that part if Marquee Moon

I have listened to Television for a few decades. I think that their musical children are the Strokes.

"Let's dress up like cops, think of what we could do"
That still makes me laugh at the dim thought.

Anonymous said...

Can you give me some background on what the hell Clint is talking about on SC?

Mr Baker said...

No info on Clint, wysiwyg

Mr Baker said...

House bill 2250 for the convention center and 2252 for stadiums have been sponsored by Ross Hunter. Husky stadium has a bill.
I do not see how or where KeyArena would get funded through either in their current form, unless it is somehow implied in 2252

Anonymous said...

Yeah I noticed your comments on SC with Camp Jones regarding the bills. 2250 would have to be what Hunter is referring to and I would speculate that any redirecting of tax revenues from the convention center wouldn't have to specify anything for the arena. It would just give the city the ability to use those funds for their respective purposes which would in turn not make the city or Chopp happy because it wouldn't be transparent to the public at large but it would be palatable.

Anonymous said...

But since I didn't read either bill I'm probably way off.

Mr Baker said...

I expect that a bill will have to say, in some way, that it could be used for Seattle Center in order to satisfy the settlement and keep the city from just spending money on anything that small like tourism.
I posted the two bill numbers in a story by David Brewster at crosscut in hopes that he will get with the people he knows (Chopp, Hunter, the convention center folks) and write a story.

Anonymous said...

Just read Hunter's statement excerpt on King 5. Sounds like the city and the UW are getting jobbed. O'fer two on both counts. I don't have a lot of faith with a proposed tax increase in the city that voters will support. The UW will be fine ultimately, and they get funded eventually by the alumni. But I think the Key and Seattle Center may be screwed.

Mr Baker said...

I guess Ross doesn't want to be county exec.