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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