Today's loser: Seattle taxpayers.
At a meeting of the city council's budget committee this morning, council members learned that a proposed "self-financing" SoDo NBA arena will in fact cost Seattle property taxpayers an estimated $780,000 a year. That's because the city will be buying the land for the arena from investor Chris Hansen, who currently owns the land, taking it off the city's property tax rolls. Some of that lost tax revenue will be made up by a special tax the arena's operators, Hansen's ArenaCo, will pay on its lease for the arena, but the city still doesn't know how much that special "leasehold excise tax" will bring in each year.
Averaged over the city's entire population, the extra property tax works out to about $2 to $3 per household per year. The additional tax will go on "in perpetuity," as the city's deputy finance director Hall Walker told a skeptical committee this morning.
"And so that additional property tax is going to be spread among all of the property owners in the city?" Councilmember Tim Burgess asked Walker.
"It's a little more nuanced than that," Walker said, noting that some of the property tied up in the arena (things like scoreboards, TV screens, and other amenities) will be Hansen's personal property, on which he'd have to pay property tax.
Yes, Burgess continued, but isn't it true that "the rest of the city's property tax owners, in a sense, are going to subsidize directly up to $780,000 or a million for this facility, correct?"
"Yes," Walker said after a pause.
"So it's not true that this is not costing the taxpayers of the city anything --- the property tax piece is going to funded by everybody else" in the city, Burgess persisted.
"Yes," Walker replied.
Under the arena proposal, the city would spend as much as $100 million to buy the land from Hansen for the arena.