Seahawks Sign Lease For 30 Years At New Stadium
Seattle Times Eastside Bureau
Football is supposedly rougher than baseball, but the Seattle Seahawks have inked a stadium lease with none of the acrimony that came with the Mariners' similar deal of a year ago.
Nobody threatened to leave town, nobody cried, nobody quit in disgust.
Instead, the Public Stadium Authority board and Seahawk owner Paul Allen's crew practically hugged after taking turns thanking each other yesterday.
"Together we have crafted an incredible public-private partnership," said Jody Patton, Allen's sister and vice chairwoman of the Seahawks' parent company, First & Goal.
Board Chairwoman Lorraine Hine said the lease will "protect the public's interest and still have the private partner get out of this arrangement what they need."
Allen will pay $850,000 a year to lease the $430 million stadium, exhibition hall and garage opening in 2002 on the Kingdome's rubble.
That's slightly more than the Mariners' $700,000-a-year lease that prompted two ballpark board members to resign in late 1996.
But rent is only a small part of the deal, said football Stadium Authority members who unanimously approved the lease yesterday after five months of negotiations.
They pointed out that Allen is also contributing more than $100 million toward construction, covering any cost overruns and paying for all maintenance, upgrades and insurance.
In return, Allen gets all stadium and parking revenue, and 80 percent of the revenue from the attached exhibition center. The rest goes to a state education fund.
"I think it'll put the Seahawks on competitive footing," said Bert Kolde, the other vice chairman of First & Goal. "That was the goal of why we embarked on this quest."
A lease analysis done for the board by Deloitte & Touche accountants said the Seahawks' total costs for occupying the stadium, including Allen's contribution, are third-highest among 12 recent stadium projects.
"It's in the range of reasonableness," analyst Clayton Fossett said.
Although the team will pay one of the lowest rents among the 12 teams surveyed - they averaged $1.6 million - its total occupancy costs were third highest at $20.1 million a year, behind only the Washington Redskins' $26.2 million and the Carolina Panthers' $26 million. The study did not include 10 other new or forthcoming stadium projects.
Board director Phil Kushlan said the study showed the lease is "better than average, or better than market rate."
Hine said the board didn't even try negotiating for more than $850,000 a year, the minimum her agency needs to keep operating and the minimum allowed by state law.
"We need to be fair; we're not trying to make it difficult," she said.
Kolde would not say how much profit the stadium would generate, but last June his company released projections saying it would gross $22 million and net $7 million the first year, and net $29 million by 2020. It also expects the education fund will get about $140,000 from the exhibition center in the first year.
"There's adequate public protection there, but it also gives First & Goal the opportunity to be successful," board member Jake Jundt said of the lease and a development agreement, also completed yesterday, giving Allen control of construction.
The lease runs 30 years and includes options to extend for 20 more. It also obligates Allen to keep operating the stadium even if it's unprofitable. He may transfer the lease only to someone worth at least $100 million.
Allen can sell naming rights - not only for the stadium, but also for the exhibition center, parking garage and the overall project.
The board may review and comment on name choices, but member Benson Wong couldn't imagine how they could reject one unless it was obscene.
Unlike the Mariners, which may use naming rights to pay their share of construction costs, First & Goal must spend naming rights proceeds on maintenance and upgrades. The lease also allows First & Goal to sell personal seat licenses, the certificates needed to buy season tickets for the best seats. That's expected to offset Allen's share.
Most principals of the lease were outlined in Referendum 48, the stadium plan state voters approved by a 1 percent margin in June 1997.
The referendum says the public's share of the project will be $300 million from lottery sales, a share of state sales tax revenue and an extension of King County's 2 percent lodging tax to 2020.
Allen was to contribute $100 million plus pay for any cost overruns in the construction. The cost has gone up $30 million so far, meaning he's now in for at least $130 million, not counting the $200 million he paid for the team and what he's invested in players, lobbyists and real estate near the stadiums. ------------------------------- What's in the lease
Here are details of the football-stadium and exhibition-center lease approved yesterday by the Public Stadium Authority:
-- Rent is $850,000 a year, adjusted annually to reflect inflation.
-- The Seahawks' parent company, First & Goal, will pay all operating and maintenance costs, expected to be $6 million a year, and must keep the facility in "first-class" condition.
-- First & Goal will keep all revenue from the stadium and parking garage, and 80 percent of the exhibition center revenue; the other 20 percent will go to a state education fund.
-- At least 10 percent of the seats must be "affordable," meaning no greater than the average cheapest seats among all NFL teams.
-- For every home game, use of a suite must be given away through a drawing among ticketholders.
-- First & Goal may sell naming rights not only for the stadium but for the parking garage, exhibition center and the overall project. Naming-rights proceeds must be used for maintenance and upgrades, such as repainting and re-sodding.
-- Personal seat licenses may be sold to offset Seahawk owner Paul Allen's share of the project, now $130 million.
-- First & Goal must make "reasonable efforts" to coordinate events with the Seattle Mariners' Safeco Field to avoid gridlock.
-- First & Goal must spend $1.75 million on public art at the complex.
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