Well said Roger.
Michael Plunkett

The best part of Roger's screeds is the byline. It's always interesting to find out what he's an expert in this week and by which "non-profit" he's managing to profit.

Why are taxes put in place at all? If the purpose of incremental new taxes can be diverted to a specific individual benefit, then isn't this akin to the idea of standing up at a performance to see better (individual benefit) while everyone has to remain seated (everyone else pays). This may make sense if the purpose is a general public benefit. Is the arena a general public benefit? Does the city own a proportionate share?

The increase in the tax base brought on by the value of the arena has its requisite burden of additional government services directly or indirectly benefiting the arena in common with the rest of the tax base. There is no free lunch. To further the lunch analogy, if 4 people go to lunch and only 3 pay, the burden is borne by the 3, either through less food to eat, or they pay more than their share for the lunch. As a result of this proposed deal, the rest of us can expect either services reduced because the existing service base has to extend further or increased costs incurred to provide the same level of service to a greater service base .

Either taxes are incurred to pay for the common good or they are superfluous. We can not pretend it is otherwise.

This idea is so stupid. Here is the obvious point: tax revenues generated by any development are to go to the public for things like police, schools, jails, fire stations, etc. If the tax revenues generated by a development are used to pay for that development, then where do we get the money to pay for police, schools, jails, fire stations, etc?

The "logic" used by the supporters of the new arena keep saying it is "self-funded." No, it is not. The taxes generated by any development belong to the public -- not to that development. The arena plan calls for using those tax revenues to pay for the arena, when they really should be used to pay for police, schools, etc. The revenue generated by the arena -- tickets, concessions, etc. -- should pay for the arena. The tax revenue generated by the ticket and concession sales should go to the city, county and state to pay for police, schools, etc.

To argue that the tax revenue generated from the arena should be used to pay for the arena is like saying the tax revenues from a house I want to build should be given back to me to pay for that house. After all, If I don't build that house THOSE TAXES WON'T EXIST! So, therefore, give that tax revenue back to me! That is only fair, right? I am the only one paying those taxes. You don't have to pay the taxes on my house. And those tax revenues won't exist if I don't build that house.

So, give all the taxes generated by my new house back to me to pay for my house. That is what the hedge fund manager wants the city to do for the new arena.

This same argument could be made for every restaurant, hotel, shopping mall, condo complex, office tower, etc. ever built in our city. They all generate tax revenue. If those buildings were not built, that tax revenue WOULD NOT EXIST!! So, therefore, should we give that tax revenue back to the builders to be used to pay for those restaurants, hotels, shopping malls, condos and office towers? If not, why should we give the revenues generated by a sports arena back to the construction of that arena?

It is not the job of cities, counties and states to build hotels, restaurants, office towers, shopping malls, condos, etc. The private sector should do that, then pay taxes to governements to provide police, schools, fire stations etc., without which nobody would want to live in, or visit our communities.

Seattle built and owned KeyArena and a downtown parking garage. Both started losing money, and cost the city revenue from its general fund. The county built and owned the KingDome, which they spent $70 million to put a new roof on, then blew up a few years later when the entire building was only about 25 years old, and still had around $70 million of debt on it which has still not been paid off yet.

Every time I start thinking that perhaps I should become a member of Crosscut, they publish a fatuous article by Roger Valdez

Good point. Thank you. Hope lots read and are influenced by it.

Well said, ruffner & Lincoln. As for using the proposed financing model to finance housing around transit...really? Now the public should take on bond obligations so that private builders can construct private prison cells--er, "townhomes"?

Private business should pay its own way, no matter which private business we're talking about. The risk of loss should be on those who will benefit directly, not on those of us whose only benefit remains some pie-in-the-sky promise that we might make some money on it. Those who wish the privilege of building on our land and in our communities should pay for the privilege and keep the risks they create with their big dreams. Then, if the dreams pan out, they can enjoy the fruits of their labor and vision.

We should applaud Roger for being willing to pimp for Sound Transit at every turn of events.
Ridership from the promised trains is half, costs are double, and so are the time lines. Northgate in 10 more years, on top of the 15 elapsed since 1996 should tell you something.
Getting publicly financed people cubes on top of Link Stations is not the answer to their problems.

To put another way, they want to pay us back with the money they owe us

One of the talking points about the arena deal is that supposedly it would not exist otherwise. However, housing is going to exist. People need to live somewhere. Subsidizing housing in one location results in increased costs elsewhere, as illustrated above by the point that more police, fire, etc will be needed, but the costs are not borne incrementally.

Debt is not the only way to finance major purchases. Some people save money for the proverbial rainy day when the roof will need to be replaced.

A question that comes up is what is an appropriate interest rate? As the article notes, interest rates should be adjusted for risk. So, will the arena interest rates be adjusted from what the interest rates would be for a school or fire station? Unfortunately, arenas seem to be obsolete quite quickly. Schools built now will have a life of 50 to 80 years.

Money spent at a sports event is discretionary spending. The customers buy tickets,
souvenirs, parking, food and drink. These sales generate tax revenue. In general, money that might be spent at a new NBA arena is money that is diverted from other discretionary activities that generate similar tax revenue. The arena generates taxes from sales that otherwise would have taken place elsewhere. What is gained from the arena is lost elsewhere. This amounts to a net loss to local government.

The picture would be very different for projects that actually create new wealth, from activities that add value (like a factory, or an apartment building ... )

"However, I’m a lot more confident that building compact communities around transit will deliver the gold coins to pay us back than the unlikely scenario, which seems to drive some of the fervor for the arena deal, of a Seattle team winning a championship of any kind. Does anyone want to bet?"

Interesting point to end on considering the Sonics are the only major pro team in Seattle that has won a championship.

David Smith,

Comments like yours make me wonder.

Would you stop buying the New York Times because they publish an op ed you disagree with?

Would you stop contributing to Town Hall if they hosted a person who's ideas you hold in contempt?

Would you close the public square because people were there saying things you thought were "fatuous."

Your comments and others like them "I can't believe you people let like Roger Valdez write for Crosscut, or "I used to think this was a first class operation but because you let this guy write, I don't" seems like a kind of censorship.

You might as well say, "I won't support a public forum because that forum 'allows' ideas I deem fatuous."

For some reason I have to think that's not really what you think. If you think my ideas are fatuous, that's fine; just say so. You don't need to impugn the venue and imply that you're holding back support because it allows people with ideas you don't agree with.

David Smith's post was rude for sure, so I can see why you're defensive.

Also, if there's a grain of truth in the impugning, it hurts.

"I need money for a project, you borrow the money at a low interest rate, I pay you back from the money I make"

So, the private, for-profit enterprise gets to access the low interest rate the city enjoys (simply because city bonds -aka municipal bonds- are not subject to federal income tax). Nice trick if you and your overpaid attorneys can finagle it.

This isn't TIF so much as it is TIF 'recapture', where the benefit of the incremental taxes is by, for and of the private investor. That said, it's all the rage around the country. But it's still financial finagling at the public trough.

I can vouch for this from a couple of timezones away, where a Fortune 500 company has succeeded in getting local and state government to buy them three new parking garages on their campus.

In this instance, the city will be left with a used and outmoded single-purpose building after twenty-plus years. Sort of like KeyArena at the Seattle Center or the wondrous Tacoma Dome.

Funny, how only 20 years ago Washington state adopted the Growth Management Act to "get growth to pay for itself" (i.e. the public facilities needed to support development, without passing those costs fully onto taxpayers). Seems that GMA's standard has been tossed under the bus.