Are Seattle taxpayers giving away $731M in arena subsidies?
SEATTLE -- A Seattle group opposed to professional sports subsidies says arena developer Chris Hansen is getting a sweetheart deal and taxpayers are picking up the tab.
In the newly-released report, a group called Sonics Without Subsidies claims Seattle is giving away more than $731 million in subsides for Hansen to build his SoDo arena -- and they're asking city leaders to change the deal.
"These are sweetheart tax breaks the average person does not get," said local attorney and activist Cleveland Stockmeyer.
The group says they aren't against bringing the Sonics back to Seattle. In fact, they say many of their members want to see professional basketball back in Seattle. However, they don't want the current plan.
"The city can do better, the government can do better, and our tax money should not be utilized for that purpose," said Herb Krohn, legislative representative for United Transportation Unions.
This group was in court last spring arguing against the alleged subsidies, but the judge told them it was too early to bring a suit. So they hired a PhD in economics to do what's called a valuation analysis, and they say it shows Hansen is getting more than three-quarters of a billion dollars in tax subsidies for his arena.
Stockmeyer calls it "a grab bag of hidden subsidies in this deal with Chris Hansen."
Here's how the numbers in the report break down according to the report: For the $200 million Hansen loan financed by the city, the report shows the city is conservatively losing $149 million in interest it should be making.
With Hansen allowed to use arena-related tax credits to pay off that loan, the estimate is another $425 million lost. And since the city will hold the title to the property, Hansen avoids paying property taxes. That's $250 million in lost taxes.
After 32 years the city could get the property back, so deducting that value of $92 million, the report says the total in tax subsidies to Hansen is $731 million.
The group wants Mayor-elect Ed Murray and the City Council to re-work the Hansen deal and remove those items.
"If they don't change the deal, we will be back in court. We'll be using this study as exhibit A," Stockmeyer said.
A representative from Murray's office said the mayor elect promised not to comment on on-going issues within the city until he formally takes office. However Murray does have a copy of the report and he's reading through it, "eagerly."
Hansen's office declined to comment on the report.