I make it better than 60-40 that the following events will take place. I know many of you will remind me promptly if these predictions turn out wrong.
Christmas in June for developers
The Seattle City Council today will keep alive its unbroken record of Developer/Campaign Contributor Pandering and approve 12-15 years of new multimillion-dollar tax breaks to benefit builders that set aside 20 percent of their units at "affordable rent levels."
Critics of the pending action point out that new apartment buildings already are providing approximately that percentage of units at below-median prices — without getting the tax breaks. Several thousand rentals already under construction would be "grandfathered" so as to be eligible for the breaks. Design review also would be waived for beneficiaries of the breaks, encouraging cracker-box construction.
The Seattle Displacement Coalition, which lobbies for affordable housing, estimates that some $90 million to $120 million in taxes thus would be shifted to owners of existing rental properties, meaning higher rents for those at lower-income levels. The Coalition lists Trammell Crow, Mueller Development, and Bruce Lorig — all campaign contributors to Mayor Greg Nickels and council members — as being among the principal beneficiaries of this early holiday gift.
U.S. District Judge Marsha Pechman will rule Wednesday, July 2, that the Seattle Sonics can depart for Oklahoma City after making a sensible financial settlement with the city to cover the last two years of their KeyArena lease. This is the usual ruling in such tenant-landlord disputes. The City of Seattle, in making its case, presented no convincing evidence that the city would be damaged sufficiently that a financial settlement would not suffice. The Sonics offered the city a $26.5 million buyout in February.
As a former National Basketball Association season-ticket holder, I would be sorry to see the Sonics depart. But on the other hand, the NBA has lost any pretense of integrity in recent years and I would prefer that college and high-school games, and cultural events, fill the gap at the Key. The trial loser will be stuck with both sides' legal fees, which means Seattle taxpayers will foot the bill if Judge Pechman rules as expected.
Sonics attorney Brad Keller last week displayed a supposed diagram of former Sen. Slade Gorton's brain. (Gorton and his firm, K&L Gates, have pulled in big fees to represent the City of Seattle in the case.) Keller, who did a first-rate job for the Sonics, suggested the left side of Gorton's brain represented his role in the city's litigation and the right side his role in working with prospective new Seattle owners to discredit and intimidate the Okie ownership. Gorton, after signing a confidentiality agreement regarding his talks with the NBA, representing the city, then promptly e-mailed a potential Seattle buyer group to report in full on the talks. Seems to me that a careful reading of a Gorton brain scan would show both sides of his brain filled with dollar signs. If the city loses the case, it would seem appropriate that Gorton rebate his legal fees to the city for his role in blowing it. Perhaps a taxpayer suit will attempt to recover them anyway, plus damages amounting to the balance of the legal fees the judge orders the city to pay.
A Viaduct replacement is distant
An eventual replacement for the earthquake-threatened Alaskan Way Viaduct will not be completed well more than a decade after the Nisqually Quake weakened it.
Eight possible replacement options — ranging from building a new viaduct to tunnels to surface-traffic dispersal to a trench configuration — were presented to a citizens' commitee last Thursday. But state, county, and city officials doing the presenting had no hard answers regarding costs, traffic accommodation, or travel times associated with the various options. In other words, they presented nothing on which sensible decisions could be based.
After an advisory ballot measure showed citizens rejecting both viaduct-rebuild and tunnel options, Gov. Chris Gregoire, King County Executive Ron Sims, and Seattle Mayor Greg Nickels punted on the issue. Gregoire then allocated $1 billion to "preliminary" work at each end of the present viaduct, which she said would be needed no matter what eventual replacement option was chosen. She now says she will choose an option after the upcoming November election. That means she will not have to offend supporters of any option in the pre-election period. If Gregoire is re-elected, I expect her decision to drag into 2009. If she loses the election, a Gov. Dino Rossi will make the call. Of course, a viaduct collapse before then would make the matter self resolving.
Rossi, it seems to me, has a tailor-made campaign issue in Gregoire's failure during her gubernatorial term to deal decisively with either the Alaskan Way Viaduct or the Highway 520 Bridge replacement/repair issues. Both are public hazards. Both are state highways. Gregoire, from the day of her inaugural, has had authority (some would say responsibility) to submit solutions and funding proposals to the Legislature to fix the problems.
A new Boeing shakedown
Boeing's stock price is down. It does not know whether it will win its political and legal battle to manufacture a $40 billion new generation of aerial-refueling tankers. Its 787 sales are problematic, given the dampening effect high oil prices have had on international demand for new aircraft. Area taxpayers ponied up multibillion-dollar subsidies to keep 787 assembly in the region, after Boeing threatened to otherwise take them elsewhere.
Now the boys are back again, preparing to make similar threats to get new subsidies for the successor to the 737 line.
A Deloitte consultant telegraphed the upcoming extortion attempt at the first so-called summit last week of the Governor's Aerospace Council and Washington Legislature Aerospace Task Force. Referring to extending big public subsidies, he stated: "We did that for the 787. Now the imperative is, you have to pay to stay." Put pretty bluntly, no?
Tom Captain, the Deloitte guy, stated that "the data say Washington is getting outgunned and is no longer competitive." He suggested land grants for new facilities and new tax breaks. "As aerospace goes," Captain said, "the state goes." Former Gov. Gary Locke and state legislators fell over themselves to deliver the subsidies and breaks — paid for by ordinary taxpayers — demanded by Boeing regarding the 787. We shall soon see what our next governor and Legislature will do when Boeing demands as much or more this time around. What will the company's next threat be: To move its headquarters?
Son of Proposition 1 is coming
Against all common sense, state and local economic conditions, the existence of already-heavy tax burdens, and the thunderous defeat last year of a similar proposal at the ballot box, Sound Transit appears poised to try a new Son of Proposition 1 measure this fall. It would principally finance a regional light rail system that would take years to build and would, in any case, carry fewer people and cost billions more than alternative transit options. A go-no go Sound Transit board decision on the ballot measure will be made in a few days.
Former state Transportation Secretary Doug MacDonald made a compelling case against light rail, and on behalf of more cost-effective alternatives, in a three-part series last week on Crosscut. Critics have alleged that MacDonald knew as transportation secretary everything he put in his articles, yet, as a state official and Sound Transit board member, went along with the Sound Transit programs he now attacks. The criticism is fair. But whatever his earlier motivations, MacDonald has now made a convincing, substantive case that Son of Prop 1 would be a dreadful mistake.
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