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February 16, 2012
Seattle arena plans to be revealed today, but maybe only to mayor
Hedge-fund rich guy Chris Hansen has told the Seattle Times he's going to release details of his Seattle arena plan today, but you may need to have a flexible notion of what "release" means:
Hansen plans to privately reveal details of his offer to [Mayor Mike] McGinn, who is expected to hold a news conference without Hansen present to discuss the proposal, said one source with direct knowledge of the talks.
But final arrangements of the news conference were still being worked out Wednesday night, without firm word on whether it will happen, said a City Hall source briefed on the plans.
The news conference, if it happens, will take place at 2pm Pacific time. I'm scheduled to be en route to a prior engagement then, but I'll post any details once I'm back online. In the meantime, feel free to kibitz in the comments.
Last night, pro-Arena Sacramento Bee columnist Marcos Breton tweeted that what Seattle is doing will help get the deal done in Sacramento. The notion of Seattle's non-coincidental timing and that city's use as a negotiationg ploy didn't seem to register.
Posted by jjo916 on February 16, 2012 12:41 PM
I'll do my part by inserting links (with no commentary from me) to relevant news stories as the day progresses.
Posted by MikeM on February 16, 2012 01:43 PM
Listening to that press conference, I really think Hansen has done a great deal to cover all the questions he knew would be coming. Just my opinion, but I think they have negotiated a better than average deal.
I'm always nervous when these groups ask local governments sell these bonds, and then guarantee them. Those guarantees have a way of not being very well guaranteed after all. But if they can put in some very strong language behind that, well, this is a better than average proposal.
I give this a less than 50-50 shot, but not much less.
seattletimes.nwsource.com/html/localnews/2017525119_arena17m.html
Are they ahead of Sac, or behind? I guess we'll find out over the next 10 days or so.
Posted by MikeM on February 16, 2012 05:57 PM
Well, there's a TIF - the bit about "existing sales, property, etc. taxes" being siphoned off to pay for the public's share of the arena. Otherwise it sounds promising, albeit in a "better than a poke in the eye with a sharp stick" way.
I have a hard time seeing how this will meet the I-91 requirement that the city turn a profit, though. At best, the city would have to fund services for the arena without getting any tax revenue to pay for them.
More on this in the AM once I've read Hansen's actual remarks. Anyone turn up a transcript yet?
Posted by Neil deMause on February 16, 2012 10:28 PM
Sure sounds like a TIF. Also sounds like that rumor about the private money being tied to a TV deal is likely correct because they did emphasize that there would be no construction until they get a tenant (I would assume they can't really get that TV money lined up for this project unless they actually have a professional team lined up).
Posted by John on February 16, 2012 10:39 PM
A TIF or a BID. I'm always hard-pressed to discern the difference between the two.
This contains a link to the press release used at the press conference today.
seattletimes.nwsource.com/html/localnews/2017525119_arena17m.html
They seem pretty adamant about not building an arena if there's no potential occupant. The fact that they proceeded today indicates to me that they feel pretty confident about having an occupant. That's just my instinct, though.
Posted by MikeM on February 17, 2012 01:11 AM
Neil, on the I-91 restrictions... This is a County-City proposal, not just a City proposal. I-91 was a Citywide initiative, not Countywide.
So you wonder if Seattle and King can form a JPA, and simply ignore I-91.
Or...
If Hansen can't simply guarantee a rate of return on the arena.
Posted by MikeM on February 17, 2012 01:17 AM
Mike: I can perhaps help you a little with the difference between a TIF and a BID
The simple first thing you want to remember is that a TIF takes a percentage of tax revenues while a BID actually creates additional taxation rates.
A TIF basically establishes a baseline of tax revenue (say the total property and sales tax an entire District A brings in on an average year before Big Project X). Any increase in tax revenues after that project is built goes directly into a special TIF fund to finance the creation of Project X.
So if all of District A brought in $10 million worth of sales and property tax before the project and the city determined that was the baseline then after they build Project X the community brings in $12 million the following year, well then $2 million will go towards paying back the loans to build Project X. Now if the year after that District A then brings in $9 million worth of property and sales tax revenue, well then $0 would go towards paying back the loan to build Project X.
A BID though doesn't take incremental increases in tax revenue but actually increases tax rates in a designated area. Not going to use property tax for this example, but if there is a city with a sales tax rate of 8% they might decide that inorder to finance Project Y in District B that they should create a BID. And in that BID there is an additional 2% increase in sales tax. Now regardless of how much sales tax that district used to bring it, if it is now bringing in $10 million a year (again, does not matter how much it brought in before the BID was created or Project Y was built) then $2 million of that will go to financing Project Y because that came solely from the additional 2% sales tax in the BID.
Anyway, hope this helps.
Posted by John on February 17, 2012 02:13 AM