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Sunday, June 8, 1997 - Page updated at 12:00 AM

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Referendum 48 -- From Backer To Ballots, Stadium Vote Is Unique -- Returns Now Arriving In Mostly-Mail Poll On Billionaire's Plan To Keep The Seahawks

Seattle Times Staff Reporter

Washington voters are about to decide whether to go into the stadium business with billionaire Paul Allen.

They have seen him on television, sitting in an easy chair in an attractive living room, in an open-neck blue shirt and wire-rimmed spectacles, speaking directly into the camera, telling them the future of the Seattle Seahawks is up to them.

It's a deal that wouldn't have come about with just any garden-variety high-tech magnate.

At stake is a proposal to tear down the Kingdome and replace it with a 72,000-seat football stadium and exhibition hall. If Referendum 48 passes, Allen buys the Seattle Seahawks for $200 million and kicks in $100 million toward the new stadium. The public pays for its portion of the project - $300 million - through a variety of narrow taxes, tax breaks and lottery games.

The state votes "yes," and the team is guaranteed to stay in Seattle. A "no" vote and Allen says he won't buy the team. That would leave the Seahawks under the ownership of unpopular Bay Area developer Ken Behring, who was last spotted in the Northwest trying to move the team to Southern California.

Sure, the plot sounds familiar: wealthy owner employing millionaire players demands that hard-working taxpayers subsidize a new stadium. If they don't, the team threatens to go elsewhere.

King County voters faced a similar demand from the Mariners just two years ago. The list goes on . . . St. Louis, Cleveland, Los Angeles, Minneapolis . . . city after city has been forced to play the same game of chicken with pro sports owners. Just last week, San Francisco voters narrowly agreed to a new home for the '49ers.

But much about this election is unique.

-- The vote: This is a statewide vote on taxes that would affect only King County. The sole new taxes would be on stadium tickets and stadium parking. The hotel-motel tax would be extended to the year 2020, but only in King County. New lottery games would be sold statewide, but previous expansions of the lottery have not required a vote of the people.

Allen's staff agreed to a vote, in part, because of lingering anger among voters from 1995 - when King County residents rejected a tax increase to build a new ballpark for the Mariners, only to have the team successfully lobby the Legislature to go forward with the project.

-- The election: This is a mail-only vote in 27 of the state's 39 counties. In the rest, more and more people are voting by mail already, as permanent absentees. In King County, voters will go to the polls June 17. Pierce, Kitsap and Snohomish counties are voting by mail.

Mail ballots have been out for more than a week, and the pro-stadium campaign is tracking how fast they come back, so that it can continue to contact those who haven't yet voted. Campaign consultant Bob Gogerty said that by the end of this week half the electorate still won't have cast their ballots.

-- The owner: Allen, a co-founder of Microsoft, reportedly is the eighth-wealthiest person in the world, third-wealthiest in America. The Mercer Island resident could easily write a check for the team and stadium combined if he wanted to. He doesn't.

Although Allen has given away millions to good causes, his staff says Allen doesn't think professional football should be a charity.

And though he's passionate about basketball and his other team, the Portland Trail Blazers, Allen agreed to buy the Seahawks only after local political leaders sought him out. Even then, Allen didn't buy the team outright: He paid an estimated $20 million for a 15-month option to buy the team. It expires July 1.

When King County was revising the Seahawks' Kingdome lease, the Metropolitan King County Council agreed to a special three-year deal for Allen that it did not offer Behring. When the Legislature agreed to put the measure on the ballot, it included language specifying the owner had to be a state resident with at least $100 million in the bank.

Allen got a promise of faster permit processes. He would essentially be the developer of the football stadium - able to choose the architect and contractor without competitive bidding. And his business dealings with the Public Stadium Authority would have a special exemption from the state Public Disclosure Act.

Allen spent $1.7 million to lobby the Legislature to get Referendum 48 on the ballot, and at least $3.5 million on the campaign. He is also picking up the $4 million tab for the election itself.

Mistrust after Mariner deal

When the Mariner ballpark lost by a handful of votes in 1995, politicians found a way to finance a new stadium anyway. That enraged many who voted against the measure. One year later, the Mariners again threatened to leave unless the Metropolitan King County Council sweetened the deal, incensing even more voters.

So as they contemplate their Seahawks ballot, voters have heard the threats to move pro teams before, and have a residual distrust of arrangements between team owners and politicians.

"Business deals are driving government decisions," said Nick Licata, a member of the anti-stadium group Citizens for More Important Things and a candidate for the Seattle City Council. "It is destroying the credibility of government, and it hurts us when we want to do something that is important."

More than team is worth

How good a deal is this for Allen and the public?

Officials at Football Northwest, the group Allen formed to buy the team, insist owning the Seahawks is not a great opportunity for their boss.

Financial World, which does an annual valuation of sports teams, estimated the Seahawks' value at $171 million. Football Northwest President Bob Whitsitt agrees the $200 million Allen would pay is more than the team is worth.

The team was a moneymaker during the 1980s, when it was playing before a full house at the Kingdome. But Whitsitt said it lost between $5 million and $8 million last year, after years of poor performances on the field cut the average attendance in half.

A long-term projection made public late last week indicated the team would lose $17 million this year. The losses would continue until a new stadium opened in 2002. Football Northwest projects a profit of $7 million in the first year in a new stadium.

Stadium revenues are increasingly vital in pro football, in part because NFL teams share most revenue. National television money is shared, and ticket sales are split 60-40 between the home team and visitors. By contrast, the money teams can make from their stadium - from selling luxury suites or seat licenses - doesn't have to be shared.

Last year, the Dallas Cowboys, who have more than 300 luxury suites, made $41.4 million in stadium revenue. The Seahawks made about $2 million.

In 1996, Financial World ranked the Seahawks 26th of 30 NFL franchises in stadium revenues. Only 10 franchises made more than $7 million in stadium revenues in 1996.

Bert Kolde, Football Northwest vice president, estimated that before becoming profitable with the Seahawks, Allen will have spent about $295 million to buy the team, staunch the losses and contribute to the stadium. Investing the same amount in a U.S. Treasury bill would earn him far more, Kolde said.

The estimates did not include appreciation in the value of the team, which has been profitable for owners in the past. The Seahawks first cost $16 million in 1975. Behring paid $80 million for them in 1988.

Paul Much, a nationally known expert on sports finances, argues that Referendum 48 is a good deal for the Seattle area, because it would ensure a local owner who would stay in town. Baltimore and St. Louis had to spend much more in taxes to attract franchises than Seattle is being asked to pay for retaining one.

"Does Seattle want to have an NFL team?" he asked. "If it does, this is probably the best deal they are going to get and the best owner they are going to get."

What of the exhibition hall?

Included in the debate is whether Allen would make money from the attached exhibition hall.

Normally, the public pays for the construction cost and debt service on convention centers, hoping the facility breaks even on its operations while attracting business for nearby hotels, restaurants and retail businesses. That was the basis for the Washington State Convention and Trade Center, whose construction debt is being paid off, like the Kingdome, with a tax on hotel rooms.

John Christison, manager of the state convention center, said a facility like that proposed near the new football stadium, which would cater more to trade shows than conventions, could make money for Allen, since the debt service would be covered.

Kolde, of Football Northwest, said the exhibition hall would add to the operating profit in the proposed stadium but could not make it on its own. Allen would get to keep 80 percent of the profits from the exhibition hall, giving 20 percent to the state.

For the football stadium, Allen would receive all the profits from tickets, concessions and naming rights. In exchange, he would be responsible for maintenance and repairs.

Allen's financial contribution to the stadium project would include $50 million out of his own pocket up front and $50 million from the sale of seat licenses. If luxury boxes didn't sell as well as expected, Allen would make up the difference. Allen has also agreed to pay any cost overruns on the stadium construction.

Kingdome's debt an issue

Supporters also tout the deal as a way for county taxpayers to get out from under the Kingdome debt. Currently, the county owes about $130 million on the 21-year-old Dome. Half that is paid through the current tax on hotel rooms, but the county also pays about $5.2 million a year from the general fund for roof repairs made in 1994.

Extending the hotel-motel tax would allow the county to refinance the Kingdome debt, freeing the roof-repair money for other uses.

But County Councilman Rob McKenna says liberating the county from the Kingdome debt is no reason to vote for a new stadium.

McKenna argues that even if Referendum 48 fails, the county could go back to the Legislature and seek an extension of the hotel-motel tax to finance the entire Kingdome debt. So far, however, the state has been unwilling to go along with any Kingdome bailout.

The total cost of the stadium is currently estimated at $327 million, but that includes only preliminary designs. Other costs include $27 million for the parking garage, $45 million for the exhibition hall and $26 million to tear down the Kingdome.

------------------------ How stadium plans differ ------------------------

---------------- Football stadium ----------------

Prime tenant

Seahawks, possible professional soccer team

Rent

$850,000/year

Team responsible for maintenance and operations

Financing

State: $260-$270 million in bonds

Paul Allen: $50 million

Seat-license sale: $50 million

Includes exhibition hall and parking garage

Who gets the money

Team: Ticket, concessions, parking revenue; 80% of exhibition-hall profit

State: 20% of exhibition-hall profit

Naming-rights income goes to maintenance and repairs

How debt is paid

Lottery games ($6 million/year)

State sales-tax exemption

Tax on ticket, parking

Hotel-motel tax

---------------- Baseball stadium ----------------

Prime tenant

Seattle Mariners

Rent

$700,000/year

Team responsible for maintenance and operations

Financing

King County: $336 million in bonds

Team: $45 million

County cost includes financing for parking garage

Who gets the money

Team: all revenue from stadium tickets, concessions, parking garage and naming rights

Taxes

Ticket tax

Vanity license plates

Lottery games ($3 million/year)

Car-rental tax in King County

Exemption from state sales tax

Sales tax on restaurant meals (one-half of 1 percent)

-------- KeyArena --------

Prime tenant

Seattle SuperSonics

Rent

$800,000/year

Also: 8.5 percent of gross from first two NBA playoff games

Financing

City: $73 million in bonds

Team: $20 million

Includes practice facility, parking garage

Who gets the money

Team: revenue from basketball tickets and concessions

City: revenue from other events, plus naming-rights and parking revenue

Team and city share luxury-seat, club-seat revenue

How debt is paid

Bonds paid by stadium revenues

Source: Football Northwest, Public Facilities District, Seattle Center.

-------------------------------- The Dome vs. a proposed new home --------------------------------

Kingdome New football complex --------------------------------------------------------------. Overall cost $67 to build $327 stadium In millions of dollars $67 roof debt $45 exhibition hall

$27 parking garage

$26 site costs --------------------------------------------------------------. Total $134 million (1) $425 million --------------------------------------------------------------. Seat capacity 66,400 (2) 72,000

Sideline seating 36,300 46,800

Handicapped seating 116 721 (3)

Luxury suites 46 116 --------------------------------------------------------------. Women's toilets 232 480 --------------------------------------------------------------. Men's toilets, urinals 246 470 --------------------------------------------------------------. Parking stalls 2,400 3,000 --------------------------------------------------------------. Total exhibition space 281,000 sq. ft. 491,000 sq. ft. --------------------------------------------------------------. Contiguous exhibition 155,400 sq. ft. 358,000 sq. ft. space --------------------------------------------------------------. Average concourse 26 feet 48 feet width --------------------------------------------------------------. Elevators 3 16 --------------------------------------------------------------.

(1) Some of total already paid. Current debt is apprximately $130 million. (2) for football games. (3) plus companion seats.

Source: Football Northwest, Kingdome.

Copyright (c) 1997 Seattle Times Company, All Rights Reserved.

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