Initiative 91 is the political brainchild of an out-of-town resident, aimed at out-of-town capitalists, and could help drive one of the biggest local corporations out of town. But at least Seattleites get to vote on it.
“We’re feeling pretty good about it passing, but I’m always paranoid,” campaign chair Chris Van Dyk says of I-91. The Nov. 7 ballot proposal would, if passed, assure that city taxpayers get a small but mandatory return from all service or real estate agreements signed with professional sports teams. But it could also put a crimp in ongoing new-arena talks between the city and the Sonics’ new Oklahoma-based owners.
Van Dyk, a Seattle lawyer, helped lead an unsuccessful attempt to stop taxpayer subsidies that built Safeco Field in 1995, and was nipped at the wire in the 1997 statewide vote over taxpayer funding of Qwest Field—despite polling that led him to believe he’d win.
Polling on I-91 has been even more favorable, but Van Dyk approaches his potential victory cautiously. “To me, the only poll that matters is the one that happens on Election Day,” he says.
But Van Dyk’s vote won’t be among those being counted: A resident of Bainbridge Island, he is not eligible to cast a ballot on the Seattle initiative he spawned.
“That’s how it goes,” he says. “I feel like a man without a country.”
The tab for his relatively modest $52,000 campaign is being paid almost exclusively with labor money, from Service Employees International Union Local 775, which represents long-term care workers. Like Van Dyk’s group, Citizens for More Important Things (which was formed 10 years ago with now–City Council President Nick Licata and others), SEIU aggressively lobbies to earmark tax money for jobs, schools, and housing—anything but perceived corporate welfare for pro sports moguls.
Van Dyk wouldn’t be the first in the U.S. to score at least a small victory against professional athletic subsidies. In the past 15 years, for example, new pro stadiums were rejected by voters in St. Paul, San Jose, and, of course, Seattle in 1995. (The Washington State Legislature subsequently caved to Mariner demands and offered up sales and hospitality taxes to fund Safeco Field.)
But such successes are rare. Major league sports franchises have built an estimated $20 billion worth of new stadiums and arenas across the country in the last 10 years, according to fieldofschemes.com, mostly at taxpayer expense. There are more on the way: New York City is building a $1.3 billion, heavily tax-subsidized new Yankee Stadium in the Bronx, while the New Jersey Nets are contemplating a move to a new, partially subsidized arena in Brooklyn in 2009.
In Washington state, after Safeco Field got Olympia’s OK, voters approved use of sales and hospitality taxes in 1997 to construct Qwest Field for billionaire Paul Allen—with interest and other costs, a nearly $1 billion stadium. (Allen literally bought the election—paying the $4.2 million costs of holding it.) Today, the Sonics continue to pursue similar tax subsidies for an arena likely to top $300 million.
I-91 would require that the city make a small return comparable to the yield on a 30-year U.S. Treasury bond—typically around 5 percent—on any new deal it makes with the Sonics or other pro teams. That fair value requirement would be applied to “goods, services, real property or facilities provided or leased by the City of Seattle to for-profit professional sports organizations or to any other public entity, or non-profit organization,” according to the initiative text.
Actually, says Washington State University sports economist Rodney Fort, 5 percent “seems a little low.” Arenas, because of their lesser costs and frequent usage compared to stadiums or ballparks, “are a much, much easier sell—you are almost a shoe-in to make money on an arena,” he says, leaving aside the Sonics’ current broken financial model, the result of a unique, miscalculated lease deal between the team and city that caused both to lose money. “You are seeing arenas built more often by the owners [with less public subsidies] because they see the value in it.”
Tellingly, the Sonics have not formally opposed Van Dyk’s initiative, nor has any significant opposition sprung up. Principal owner Clay Bennett, whose Oklahoma group bought the Sonics and Storm for $350 million in July, seems unruffled by I-91.
“Our focus remains on moving ahead with establishing relationships in the region and developing a solid plan for a world-class multiuse arena,” he said in a statement. I-91, he added, will have no bearing on that plan of attack.
“I think the Sonics couldn’t care less [about I-91],” says economist Fort. If they get the right deal, he surmises, “they’d be happy to sign that lease—the initiative simply wouldn’t matter.”
After talking with the new owners recently, Van Dyk gets the impression Bennett and company are going to invest a good dose of their own money if they build a new facility here. “They want to own it,” he says.
The former Sonics ownership, meanwhile, never formally offered to substantially chip in for a $270 million arena they proposed earlier this year. But Fort says significant owner contributions to the construction of new facilities are de rigueur today.
“The owners’ [financial] involvement has gotten larger in all pro sports,” he says. “The magic number appears to be around $100 million or so.”
Bennett’s group has indicated it wants something along the lines of a basketball Disneyland: a big arena with shops, restaurants, and entertainment. A new hoops palace might be constructed on the Eastside, the new ownership says. The most likely site, near Bel-Red Road, was just bought by Seattle developer Wright Runstad & Co., which told The Seattle Times it is agreeable to building such an arena there.
But if the arena is built in Seattle, it would most likely rise on the city’s KeyArena site with an expanded footprint, Van Dyk says, based on his talks with owners. If it can’t be built in the area, then the team will likely move to Oklahoma City, either by breaking the current KeyArena lease or waiting for it to expire in 2010.
“I think these new owners are great,” says Van Dyk. “We tried to talk to the old owners—tried to explain to them what people were saying, were feeling. We got exactly nowhere. The new owners reached out to us, trying to understand where we were coming from, wanting to do it differently. I believe they are making a good-faith effort to unravel this knot and keep the Sonics in Seattle. They are looking at it much more creatively.”
On this front, the Oklahomans, according to a Seattle City Council staffer, have included debt payoff in their ongoing talks with City Hall—which means that taxpayers might still pick up most of the Sonics’ five remaining annual bond payments.
“There are any number of ways the new owners could get around I-91,” says Van Dyk. “But I get a sense from the new owners they would honor the deal.”
Without opposition, the I-91 campaign is so one-sided that the other night at an Eastlake Community Council forum, Van Dyk made his case and then gave an argument on behalf of his nonexistent opponents. “I tried my unbiased best,” he says.
Still, the proposal has its flaws. Besides negative effects on arena talks, the measure would make it tougher for smaller, marginally profitable pro sports franchises like the Western Hockey League’s Seattle Thunderbirds to make ends meet. Yet to some, the initiative is being viewed exclusively as a referendum on multimillionaire owners and athletes. If that’s the case, Van Dyk can expect a landslide victory.
“We’ve been told by legislators that they’re looking at the vote as a read on the public’s feelings about the Sonics and sports in general,” says Van Dyk. “If we win, any [future] public pro sports subsidy is off for Seattle, and extremely limited elsewhere.”
