House Finance chairman shows path to Key Arena financing solution

March 12, 2008

OLYMPIA – By working collaboratively, Seattle can create a fully funded Key Arena renovation plan in advance of an April 17 NBA relocation meeting, according to Rep. Ross Hunter (D-Medina), chair of the House Finance Committee.

“This takes a short-term and a long-term approach involving all parties,” Hunter said.

In the short-term, the city of Seattle can commit its existing tax capacity to fund the remaining $75 million left on the estimated $300 million renovation total.  Hunter said it takes a typically-growing revenue stream starting at about $4 million per year to bond $75 million.  To do so, the city could use its:

• Real Estate Excise Tax - Seattle’s real estate excise tax revenue has grown faster than their predictions and generates over $50 million a year. Even with a national downturn in real estate this will not go down substantially.

• Square Footage Tax - The city could also use or expand their newly approved square footage tax, which generates over $18 million a year.

By teaming up, this strategy will allow the legislature to explore long-term funding solutions for Seattle Center and other important King County projects through local option taxes currently paying for Safeco and Qwest fields. 

Working separately, the plan won’t fly, Hunter said, because passing Key Arena legislation is impossible in the waning days of the session.  Hunter said House Speaker Frank Chopp, Senate Majority Leader Lisa Brown, and Gov. Chris Gregoire committed to working on the subject with all parties in the coming months in a letter sent earlier this week, as long as any plan included other projects such as affordable housing and community development ideas.

“We want a substantive conversation between Seattle, the county and the state about the complex array of taxes and financing around stadium packages and other important regional needs,” said Hunter. “Personally, I’m not sure if using public funds for a sports facility is the best use of tax dollars.  At the same time, the Key is a public facility that can’t be left to deteriorate at tax-payer expense.  If Seattle commits to funding their proposal now, it gives us the chance to consider the proposal along with other potential uses for regional revenue.”  Hunter noted the Speaker had committed to this approach.

The Key Arena task force is established in the state’s 2008 capital budget.