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Arena or Amazon: Does Seattle know what's important?

It's easy for us to be swept up in the emotions around bringing back a sport that was stolen away. But consider the almost-ignored Amazon deal to get a handle on what really matters to our future and our economy.

CenturyLink and Safeco Field could be joined by a sports arena.

CenturyLink and Safeco Field could be joined by a sports arena. Dcoetzee/Wikimedia Commons

The courtyard outside the Van Vorst Center on Terry Avenue N. offers seating for Amazon employees and the public.

The courtyard outside the Van Vorst Center on Terry Avenue N. offers seating for Amazon employees and the public. Courtesy of Amazon.com

We witnessed two blockbuster deals for Seattle and the region last week. One, the proposal to build a multi-use sports and entertainment venue in the SoDo neighborhood, captured the imagination of sports fans everywhere. The other, the announcement of Amazon’s intent to purchase three blocks in the Denny Triangle from the Clise family received nominal coverage. By any economic measure, though, the Amazon deal is much bigger for Seattle, with no public funds expended.

What does this say about us? And how does this reflect how we will negotiate with the NBA, the arena ownership group, and others in the coming weeks? Will we be optimistic while at the same time maintaining a healthy dose of skepticism? And will we separate the emotional from the economic?

First, consider the Amazon deal to build 3 million square feet of office space, creating thousands of jobs, including the revenue that will create new shops and restaurants, and real estate excise taxes (REET) for the city. This is a huge long-term commitment that will continue to pay huge economic dividends far into the future. The thousands of high-paying jobs that will grow here because of this deal dwarf the economics of a new arena. As our vice president would say, “this is a big f#%&ing deal!”

In most cities this would be the biggest deal in decades. There would be press conferences, celebrations, and photo ops — but not here. Not in Seattle. Here, we are under the trance of something that transcends economics. We see an opportunity to get back what was stolen from us: our beloved Sonics.

We have been given an opportunity at redemption by a local guy from the neighborhood, Chris Hansen. Hansen graduated two years behind me at Roosevelt. I never knew him but am proud nonetheless that he is stepping forward with this plan. Hansen has made a proposal to the city to bring back the team that is both generous and audacious. The mayor and the county executive are completely right to work with him to find a way to make this happen.

I don’t doubt Hansen's civic pride as the driving force for his proposal. Because, let’s be honest, the year-to-year economics of an NBA franchise don’t add up. The return on investment comes upon the selling of the team. Ask the former ownership group of the Sonics — the people who have their names on the symphony, opera, aquarium, and zoo. These are the people who tired of the cash calls to prop up the team the last time. And ask David Stern, who said before the last players’ strike that the NBA business model doesn’t work. All one can say is: Duh, David.

Will the new Sonics play substandard basketball and ticket sales dwindle and luxury boxes remain empty? Who knows?

The job of elected officials and the community at large will be to take off the rose-tinted glasses for a while and separate the longing for a team from the economic consequences — unintended and intended. As a basketball fan, I find this exercise personally very difficult. I want the Sonics back. I too was captivated by the opportunity to bring our team back as well as the intriguing idea of an NHL team. We’ve only had three championship teams in Seattle and one of them was the 1917 Stanley Cup winning Seattle Metropolitans.

Our emotional attachment to sports explains why the blockbuster Amazon deal was pushed to the “also happened today” status last week. Because if we were analyzing these events based on the economic benefit to the city, there really is no contest — the Amazon deal is the clear winner. And this deal happened entirely between private parties. You’d think a little celebration would be in order.

Similarly, the economic benefit of an arena to the city and region for other business sectors needs to be accounted for. The seaport (as noted below: I work with the shipping industry) needs to be part of the cost-benefit analysis of the arena proposal. The impact of five sports teams, events, and three stadiums and an exhibition hall adjacent to busy marine terminals, which move over a million containers a year, deserves to be studied seriously to make sure that our emotional and civic needs don’t detract from our more basic need to keep our economy chugging along and creating good-paying jobs.


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Comments:

Posted Mon, Feb 20, 8:46 a.m. Inappropriate

World class city? Yes because of companies like Amazon and others. Yes because of our great library system; no when we become suckers for the Three card monte game of pro basketball.

sunshine

Posted Mon, Feb 20, 9:22 a.m. Inappropriate

If the Amazon deal is oatmeal, the Sonics deal is Froot Loops.

Posted Mon, Feb 20, 9:35 a.m. Inappropriate

The politics of pro sports is a veritable minefield for politicians. Nick Licata was seriously threatened in the 2009 city council election; one of the reasons for that is the perception that he was to blame for the Sonics leaving in the first place. In Nashville, where I live now, it is left to the conservatives on the Metro Council to question whether large public investments in stadiums (and the related convention center project) are appropriate; they usually end up in the minority.

Posted Mon, Feb 20, 10:24 a.m. Inappropriate

This is a well written piece and spot on!

annied

Posted Mon, Feb 20, 10:40 a.m. Inappropriate

I work in SODO and commute to/from Ballard, and I can tell you right now the traffic down here is terrible during commute time. I cannot imagine what it would be like with another major project and the additional traffic it would bring.

Posted Mon, Feb 20, 10:46 a.m. Inappropriate

This should make for awkward holidays since Charles Royer is on the Mariners board.

My questions stem from the side of me that knows the long-term success and growth of our city and region is most dependent on the job growth and dynamism of the private economy. Sports are part of neither the private nor public economy. Sports occupies that realm where it’s easy to lose perspective and common sense.

Btw, you might want to tell the PSRC that amenities are not nessisary to attract and retain talented people to the area, and a component of a metropolitan growth plan, it would be a surprise to them.

Your small minded complaining asside, it is possible to have both.

Mr Baker

Posted Mon, Feb 20, 11:04 a.m. Inappropriate

I won't believe all the hype about the NBA coming back to Seattle until Wally Walker is on board. That will seal the deal for me.

woofer

Posted Mon, Feb 20, 11:28 a.m. Inappropriate

Hey let's celebrate the wisdom of Capitalism where companies that can thrive on their own reap the profits and those who can't go out of business.

Pro-sports corporations are failed business models. The overpayment of their employees being one big reason. And, as pointed out here, they depend on a bigger fool to buy the business to provide return on the investment.

When I read Mr Jordan call these for profit corporations our teams I laugh out loud. When I see in a PI photo a grown man wearing a Sonics jersey and cap weeping at the prospect of a NBA team returning to Seattle with the purpose of squeezing every penny they can out of him and his community I am astonished.

Posted Mon, Feb 20, 11:33 a.m. Inappropriate

"...consider the Amazon deal to build 3 million square feet of office space, creating thousands of jobs, including the revenue that will create new shops and restaurants, and real estate excise taxes (REET) for the city. This is a huge long-term commitment that will continue to pay huge economic dividends far into the future. The thousands of high-paying jobs that will grow here because of this deal dwarf the economics of a new arena. As our vice president would say, 'this is a big f#%&ing; deal!'"

Spoken like a true development booster. Many people consider it an even bigger f#%&ing; deal that so much commercial real estate in Seattle including the historic Smith Tower and the old PacMed/Amazon HQ buildings, the BOFA tower, and new buildings in South Lake Union and along Elliott Avenue to name just a few examples have high vacancy rates or are completely vacant. Instead of salivating about the tax revenues Seattle can extract from this vast construction project, shouldn't the city have a game plan for filling up the commercial venues we've already got? What if Amazon falters because large numbers of people catch on to the fact that it's becoming the new Walmart? Remember all the buzz a decade or more ago about Seattle's biotech boom? I hate to break it to readers, hundreds of thousands of square feet of vacant biotech space are unoccupied in several neighborhoods including the north end of downtown and SLU.

It is also a "big f#%&ing; deal!" that Amazon will very likely build a cheap buildings that only add to the mélange of ugly new buildings recently constructed in South Lake Union and on Capitol Hill. Are we trying to become a museum of monstrously bad modern architecture or what?

The biggest f#%&ing; deal of all is that Seattle is ignoring the threat of sea level rise and instead promoting massive construction in parts of the city that are highly vulnerable to inundation including Interbay, the north end of SLU, Pioneer Square, the Stadium zone and the Duwamish Industrial corridor. Instead of thoughtful effort to consider this looming problem, the land use planning policies are guaranteed to disrupt many businesses and eliminate huge number of jobs and dwelling units in the not too distant future. The rising sea is the number one long term threat to the economy, and, in many parts of the world, to human life.

Mud Baby

Posted Mon, Feb 20, 11:35 a.m. Inappropriate

We can't even pave our streets. There is no plan to do so.
It's embarrassing.

jsperry

Posted Mon, Feb 20, 11:45 a.m. Inappropriate

I think this is a silly and foolish article.
This piece is based on some premise that the city has to choose between the two proposals. The title says it all: "Arena or Amazon".
Creating a fictional conflict between two unrelated proposals then asking a bunch of questions about them is not journalism, nor it seems are many of the articles created at Crosscut.

Dougga

Posted Mon, Feb 20, 11:53 a.m. Inappropriate

The mostly unanswered questions posted by the author:
1. What does this say about us?
2. ...how does this reflect how we will negotiate with the NBA, the arena ownership group, and others in the coming weeks?
3. Will we be optimistic while at the same time maintaining a healthy dose of skepticism?
4. ...will we separate the emotional from the economic?
5. Will the new Sonics play substandard basketball and ticket sales dwindle and luxury boxes remain empty?
6. Will there be opportunities for investors to build hotels, condos, and restaurants?
7. Is the new arena (likely a mall with a basketball court and hockey rink) a catalyst for more development and rising property values?
8. What kind of traffic mitigation is planned for the area to keep things moving while not threatening the port’s international competitiveness?
9. How many new parking spaces will be needed?
10. why has Seattle Center always been rejected so out of hand?
11. Aren’t we investing millions in traffic improvements there?
12. Wouldn’t it be great for Lower Queen Anne businesses to be bustling again with Sonics fans?

Dougga

Posted Mon, Feb 20, 11:57 a.m. Inappropriate

i have criticized Judy Lightfoot for writing articles like this. Was she involved in writing this piece or is the tendency to pose a bunch of unanswered questions and pass this off as journalism something the publisher condones, encourages and/or enforces?

Dougga

Posted Mon, Feb 20, 12:19 p.m. Inappropriate

I totally forgot the most important question (according to the author). It's found in the sub-head "Does Seattle know what's important?" Ughhhh Two independent private groups want to initiate project within city limits and the author asks "Does Seattle know what's important". Ridiculous.

Dougga

Posted Mon, Feb 20, 12:38 p.m. Inappropriate

The Amazon development should be the model for any new arena.

The City of Seattle is NOT selling bonds to pay for constructing the Amazon buildings. Neither should the city sell bonds to pay for constructing a new sports arena (or parking garage, for that matter).

The City will receive all the tax revenue generated by the Amazon development to spend on police, jails, courts, schools, etc. Any tax revenue generated by a new sports arena should also go to the city to be spent on police, jails, courts, schools, etc. The tax revenue generated by a sports arena should NOT be used to pay for that sports arena!

Lincoln

Posted Mon, Feb 20, 1 p.m. Inappropriate

Well, Jordan, I would say the proposed arena is more important to more people, being a public (at least, for that segment of the public that can afford a ticket) gathering place.

Amazon, OTOH, plans to create three million more square feet of character-free highrise office space which will block out even more of the sun, and which most likely will have strategically-posted security guards so as to keep the public out. Yes, Amazon is going to build this project on more of its own dime than the arena, but anyone who thinks the city didn't have to offer some form of tribute in order to prevent Amazon from taking the project to, say, downtown Bellevue, must still believe in the tooth fairy and the Easter bunny...

orino

Posted Mon, Feb 20, 1:18 p.m. Inappropriate

"The definition of Insanity, is doing the same thing over and over again and expecting different results".

Albert Einstein

sunshine

Posted Mon, Feb 20, 6:10 p.m. Inappropriate

Neither draw money from the general fund.
So, it is pretty much personal preference, and not so much journalism.

Mr Baker

Posted Mon, Feb 20, 7:05 p.m. Inappropriate

Very good points. West Seattlites will be effected by the additional traffic as our routes to downtown are reduced by the tunnel. Let's spread the wealth to Key Arena and lower Queen Anne.

bschaadl

Posted Mon, Feb 20, 8:56 p.m. Inappropriate

We need basketball. Hopefully we get the SONICS name too.

Posted Mon, Feb 20, 9 p.m. Inappropriate

@ScottBallard, are you kidding? Commuting from Sodo to Ballard, or from Ballard to Sodo is a piece-o-cake.

Try commuting for your job from places such as Kent, Auburn, Marysville, Kitsap Peninsula, or Cle Elem. Jobs are scarce, and many endure hardship to get to and from their jobs.

You don't.

Posted Mon, Feb 20, 9:03 p.m. Inappropriate

@MudBaby, you do realize that the Seattle City Council is so unhelpful to business need, that most businesses have relocated? It's more than just the recession as to why office spaces are unfilled.

Posted Mon, Feb 20, 9:50 p.m. Inappropriate

"Neither draw money from the general fund."

But all the taxes generated by the Amazon development will go into the general fund. NONE of the taxes generated by a new arena would go into the general fund -- all those taxes would go to pay off the bonds for the arena. So, the Amazon buildings will generate tax revenue that will help pay for schools, police, jails, etc. The new arena will not generate any tax revenue that will help pay for schools, police, jails, etc.

Zero taxes would go into paying for the Amazon buildings. $450 million of tax revenue (and rent) would go into paying off the construction bonds on the new arena: $15 million per year for 30 years = $450 million that the City of Seattle would be on the hook to pay off on the construction bonds. The City would sell ZERO construction bonds for the Amazon buildings.

Lincoln

Posted Mon, Feb 20, 11:46 p.m. Inappropriate

A spot-on analysis, Jordan. Well done.

Posted Tue, Feb 21, 10:17 a.m. Inappropriate

Heart-broken? Really? I would suggest that one is heart-broken when one's mate dies, not when a sports team leaves town.

Posted Tue, Feb 21, 10:46 a.m. Inappropriate

I largely agree with Mr. Royer's analysis, but I think one issue raised by Mr. Royer deserves rebuttal. Mr. Royer questions the impact of all the new traffic in SODO if a sports arena with two new teams is built, worrying that all the high-heeled folks from the East Side will not take a bus to watch games from their $100 seats. Keep in mind that Sound Transit is in final design for East Link extension to connect with the International District station, with a quick ride south to the Stadiums station. Link access is even more direct for users traveling from north or south of SODO. While this would probably serve a small percentage of users, by 2023 East Side users will nonetheless have a better option than the bus.

As for those who drive to the arena, the notion that the Seattle Center site would be better than SODO strains credulity. SODO has direct access to both I-5 and I-90. Seattle Center has neither. The connection to I-5 even in an improved Mercer Corridor pales in comparison to the access offered by SODO. I remember commuting back home by bus from downtown to Queen Anne Hill on Sonics games nights, and it was a nightmare getting stuck behind cars trying to file in to the parking garage. Culturally, yes Lower Queen Anne would be a great fit for the Sonics, and if Hansen's proposal were to rebuild the Key Arena, I wouldn't dismiss it out of hand just because of lack of freeway access. But I think we should acknowledge that when it comes to locating a new arena--whether you support it or not--SODO is really the only place such a proposal makes sense.

I'm conflicted on the proposal. I'm not a hard core sports fans. I go to 3 or 4 Mariners games a year. Someday I'll attend a Sounders game. But I'm not quick dismiss the proposal. I do think sports teams provide an intangible benefit to a region, so long as the cost and risk to the public is limited. Right now, my biggest concern is the City of Seattle's debt capacity. SDOT wants to start the Sea Wall replacement in late 2013, even though there is no revenue in place for this huge undertaking and the mayor has already indicated we'll need to have a public vote for a tax increase. Given the importance of replacing the sea wall and rebuilding the waterfront, I'd prioritize that ahead of the city issuing bonds for an arena.

Posted Tue, Feb 21, 2:21 p.m. Inappropriate

Yes, common1sense, I do realize that the City of Seattle stiffs everyone equally. From booting and towing homeless people's cars to citizens who pursue the city's byzantine approval processes for things like building a an ADU or getting a makeover of a neighborhood park, to mega developers, the city's approach is exactly the same: drag people through hell for several years and eventually take "action."

Mud Baby

Posted Sat, Feb 25, 8:59 p.m. Inappropriate

of course the Amazon expansion is more important than the potential arena and long shots at professional teams. who would doubt it? perhaps Royer's comment is more about the media focus. the NBA is a cartel. they profit from monopoly power as 40 cities compete for 30 teams; billionaire owners make profits by selling to one another; they write off paper losses against other business holdings.

Seattle and Metro have to make transit work in the center city. Funding is scarce and cannot be wasted on the Nickels-Drago short slow streetcars.

eddiew

Posted Sun, Feb 26, 3:29 p.m. Inappropriate

Amen, eddiew

afreeman

Posted Sun, Feb 26, 9:27 p.m. Inappropriate

I have to agree, the title is really a false choice. Exactly how are Amazon.com and the Arena deal even remotely related? This article makes no connection really. One would hope that the media would give a careful look at projects that affect the public such as sports teams do as well as requiring large public subsidies.

Perhaps Crosscut should take a closer look at Amazon.com as well to pull back the covers on this deadbeat corporation that is doing everything it can to dodge sales taxes. While decent local businesses like Elliot Bay have to add sales taxes onto their purchases, Amazon.com dodges these taxes in most states, giving it an obviously unfair advantage. Once again, the huge corporations get a tax break and small businesses get the shaft.

Amazon’s Tax Dodge
Published: September 6, 2011
http://www.nytimes.com/2011/09/07/opinion/amazoncoms-tax-dodge.html

Posted Sun, Feb 26, 9:49 p.m. Inappropriate

I keep waiting for Jordan Royer to comment upon the plans to develop the massive coal export facility in Bellingham. Any plans for coal export would require 18 to 20 additional 100-car trains of 1.6 miles in length to travel through Seattle every day. It is hard to see how four sport teams in the Sodo area could survive with traffic disruptions of that magnitude.

Of course with SSA Marine being the developer of the Bellingham facility and Royer being employed by an industry trade group, it would not be in his economic best interest to comment upon the topic.

Posted Wed, Feb 29, 10:46 a.m. Inappropriate

preparing for the future means being bright and living comfortably among others.And government can be one of the factors to help us to achieve bright tomorrow
Water removal

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