Frequently Asked Questions
Some argue that this $200 million in bonding could be better spent on roads or schools.
The $200 million participation by the City and County will be fully repaid by tax revenues which would not exist but for the Arena. So it is inaccurate to compare investment in the Arena with conventional public spending. After accounting for incremental/ancillary taxes the Arena will generate, the City and County’s tax revenue should increase well beyond the investor guaranteed debt service on the bonds. All things being equal, we believe this should result in the City’s borrowing capacity increasing in time -- which again would not be the case with most conventional public spending.
What protections are in place to safeguard the public until the bonds are repaid?
Several layers of protection exist for the City and County throughout the term of the bonds. The Investor Group is responsible for any shortfalls in Arena tax revenue, and is obligated to protect the City and County General Funds from any exposure to Arena-related debt obligations. To supplement this guarantee, the Investor Group will fund a reserve account equal to one year’s worth of City/County debt service payments, and will increase the reserve amount any time the Arena does not generate at least double the revenue necessary to pay one year’s debt service. Furthermore, the Investor Group’s equity investment in the Arena and NBA franchise will serve as collateral against the City’s contribution.
What about substitution of tax dollars -- are these really new taxes?
While there is unquestionably a “substitution” of entertainment dollars in the region that will be spent at Arena events, there is minimal redirection of tax proceeds as the property tax is on the incremental value of the property created, the B&O tax is on businesses that would not exist (NBA/NHL), and the admissions tax does not apply to most other forms of entertainment and the City of Seattle does not collect admissions taxes on Seahawks, Mariners, or Sounders games tickets. Furthermore, the Arena will generate incremental “new” taxes for the City and County from patrons who attend Arena events from outside the City and County borders.
Why did you choose this location over KeyArena or another location?
The SoDo location was selected because of its proximity to downtown and to other sports facilities. The existing infrastructure (including parking) around the SoDo location which currently serves the neighboring sports facilities makes for a more cost-efficient development. In addition, the proximity to downtown Seattle and the public transit accessibility make the SoDo location superior for patrons seeking a convenient and cost-effective way to attend events.
What will happen to KeyArena once the new Arena is done?
The new Arena tenant(s) will play two or three seasons in KeyArena during construction of the new Arena. We have agreed to modernize several elements of KeyArena at our own cost, leaving behind a better facility than currently exists. After the temporary tenancy, the Investor Group has agreed to help the City of Seattle find a long-term usage for KeyArena that provides the utmost benefit to the community.
How do you address the concerns over traffic and freight mobility?
The independent traffic study performed in Spring 2012 concluded that the addition of the Arena to the SoDo sports complex will have a minimal and manageable effect on the event-night traffic in the area. While Arena events will generally have similar weekday evening, and weekend start times, as Mariners games, the majority of the Arena events will occur on non-overlapping days of the year.
Additionally, an Arena sellout will draw far fewer fans than even a 50% Safeco sellout. On those rare occasions when Safeco and Arena events occur at similar times, the total traffic counts are still likely to be less than those of a large CenturyLink Field event, which is currently handled ten or more times per year. Arena events will not overlap large (45,000-plus-fan) events at CenturyLink, which currently drive the densest traffic days in SoDo.
Is there enough parking for the Arena?
The Seattle Mariners have reported that in recent years the number of cars driven to a game for each 1,000 fans is approximately 280. If the vehicle counts at the Arena are similar (as anticipated, because the events are at similar times in the same area), then needed parking for a sellout event would be approximately 5,000 spaces. This represents less than one-third of the existing parking spaces within a 15 minute walk of the Arena site.
What are your plans for ancillary development around the Arena?
The Arena Investor Group has invested in some real estate surrounding the chosen Arena site. While no detailed plans exist for this land, the intent of the investors is to cause development of a modest but energetic mix of retail, dining, and entertainment establishments centered around the blocks north of the Arena site. The Investor Group has proposed that a pedestrian mall be opened along what is currently Occidental between Atlantic and Massachusetts. This would provide a safe and lively corridor for visitors to all the SoDo facilities.
Why will this Arena draw more concerts and events?
Seattle’s history as an influential market for music has ensured that many touring artists continue to visit despite the lack of a modern Arena facility. However, there are cost inefficiencies that must be absorbed by those artists and promoters due to the lack of modern technologies at KeyArena. In addition, KeyArena lacks adequate truck loading access, which makes the load in and load out for large concerts very difficult, time consuming, and expensive. These costs drive some promoters to other cities instead of stopping in Seattle or instead of playing multiple dates in Seattle. The new Arena will be built with the most current technology, which make it far more attractive to artists and promoters.
Can Seattle support five major sports franchises?
As the 15th largest Metropolitan Statistical Area (MSA) and 12th largest US TV market, the Puget Sound region is the largest market in the United States that has only two of the traditional four major leagues (NFL, MLB, NBA and NHL) represented. Considering the region’s incredibly strong corporate base, and the fact that Seattle is also amongst the fastest growing and most affluent major markets in the US, we believe the region can easily support additional franchises.