Slimmer KeyArena proposal unveiled

OLYMPIA — The Sonics and Seattle city officials yesterday trotted out a slimmed-down proposal to bail out KeyArena and local arts groups, but legislative leaders still predicted little support for the idea.

Seattle Sonics CEO Wally Walker told lawmakers at a public hearing that without taxpayer help, the city's future as the team's home could be in jeopardy.

"We embrace KeyArena, Seattle Center and Queen Anne as our home," Walker told the House Finance Committee. "We'd love to call it our home for a long, long time to come. But to do so ... we need your help."

The new plan would spend about $100 million in tax money, down from an original request of more than $260 million. But key lawmakers frowned at the new proposal, too.

"I just can't imagine we would have the votes for that," said House Majority Leader Lynn Kessler, D-Hoquiam.

Senate Majority Leader Lisa Brown said no one is even pushing the legislation in that chamber. "If it's important to someone, I suppose we'll eventually hear about it," said Brown, D-Spokane. "But at this point it's not even on our radar."

The new proposal would retire $60 million in debt remaining from the 1995 arena renovation and fund a new $10 million practice facility to replace one on land the city recently sold to the Bill & Melinda Gates Foundation. The plan drops, at least for this year, a grander $200 million arena expansion desired by the Sonics.

Sponsors also have tried to sweeten the proposal by adding in about $15 million for other Seattle projects, including money to pay off debt remaining from McCaw Hall as well as funding for the Wing Luke Asian Museum, the African American Heritage Museum and Asian Counseling and Referral Service.

The money would be raised by extending the life of some of the taxes dedicated to paying off the construction debt on Safeco and Qwest fields. Instead of expiring when the stadium is paid off in 2013, the taxes would be extended an additional 13 years and redirected to KeyArena and the arts groups.

The House committee looked at two different tax options: One continues deferral of a 0.017 percent sales tax that would otherwise go to the state treasury. The other continues a 0.2 percent tax on restaurant and bar meals and beverages. (The restaurant tax is now set at 0.5 percent.) Both proposals would extend a 2 percent tax on car rentals.

Restaurant and car-rental industry lobbyists urged committee members to not renege on an agreement lawmakers made a decade ago to let the taxes die after the Safeco bonds were paid off.

KeyArena's finances have been a growing problem for both the team and the city. Seattle Deputy Mayor Tim Ceis told lawmakers the city's annual revenue on KeyArena has fallen from $7 million several years ago to $4.5 million — about $1.5 million short of the city's debt costs.

Though the Sonics have what Walker described as a "relatively low payroll" — which, at $53 million, is below the National Basketball Association average — he said the team's financial arrangement with the city is not sustainable.

"We fully intend to honor our lease through 2010," Walker said. "But something must change if we're to remain a competitive franchise and an economic driver for Seattle Center."

People from more than a dozen local arts groups showed up yesterday to voice support for the proposal, which would provide millions in funding.

But citizen activist Chris Van Dyk said it's wrong to ask taxpayers to help prop up a professional-sports franchise.

"The public doesn't want these subsidies," said Van Dyk, whose organization, Citizens For More Important Things, led the campaigns against public funding for Safeco and Qwest fields.

He suggested instead imposing an income tax on the Sonics players, whose salaries range from nearly $400,000 to $13.5 million.

The proposal also has drawn opposition from the public board overseeing Safeco Field. Joan Enticknap, chairwoman of the Public Facilities District board, noted that Safeco Field is only 5 years old and may need future upgrades.

"I am very concerned about diverting these revenue streams before the PFD can begin assessing the future needs of the ballpark," Enticknap wrote to Rep. Kelli Linville, D-Bellingham, chairwoman of the Economic Development, Agriculture and Trade Committee.

Ralph Thomas: 360-943-9882 or rthomas@seattletimes.com