Thursday, April 5, 2007 - Page updated at 12:00 AM

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No profit seen from proposed Sonics arena, says Renton

Seattle Times staff reporters


Read the arena economic report:

A proposed $500 million Sonics arena in Renton probably would not turn a profit for the state or King County, according to an economic analysis released by Renton officials Wednesday.

The arena could generate between $78 million and $152 million in new taxes over 25 years for the state, King County and local jurisdictions, the report by Seattle-based Berk and Associates says.

Taxpayers are being asked to contribute at least $300 million toward the arena's construction.

But even if the arena wouldn't make money for the state or county, it would create hundreds of new jobs and become an important cultural center that would improve the region's quality of life, the report says.

Renton officials and business and labor leaders said at a news conference Wednesday that the study confirms their belief that the state Legislature should move forward on a bill allowing King County to help fund the arena. The legislation faces a tough road in Olympia.

"My opinion is that the numbers are very, very strong," Renton Mayor Kathy Keolker said.

Keolker said the city, which paid for the report, demanded a "very conservative" study and that actual arena benefits could be much higher.

The study did not, for example, take into account possible benefits from new hotels or other development that sports arenas have encouraged in some cities.

The arena would support as many as 5,800 jobs statewide, according to the report. Between 900 and 2,400 of those could be considered new jobs that otherwise would not exist in the state. That doesn't include about 3,800 new construction jobs during the arena's construction.

And the arena would prevent the loss of hundreds of jobs now supported by Sonics and Storm games.

The arena also would spur between $68 million and $170 million a year in new spending.

But the higher end of the study's projections assumes the arena would attract a National Hockey League team by 2015, in addition to bringing in many other new events, from corporate meetings to concerts and ice-skating championships.

The Sonics' biggest champion in Olympia, Senate Ways and Means Chairwoman Margarita Prentice, said the study was "much more favorable than I ever imagined."

"This is a big plus for the economy," said Prentice, D-Renton. "This raises money, lots of it, and creates a whole lot of jobs."

But anti-arena activist Chris Van Dyk attacked the study as "economics on steroids" for failing to examine the costs of the arena in addition to its possible benefits.

The study also may call into question how much Renton can contribute to the project. Sonics owner Clay Bennett informally has suggested Renton may need to contribute $100 million. But the study says the arena would generate only $20.5 million in new taxes for the city over 25 years.

Keolker said Renton has not decided how much money the city might commit. "There are a lot of numbers floating around out there, but at this point we have not been asked for a specific number, nor have we committed to one," he said.

Generally speaking, independent research by sports economists has concluded that arena studies funded by proponents of stadiums tend to exaggerate benefits.

The presence of professional sports teams in a region has "no measurable positive impact" on economic growth, according to a 2004 paper for the libertarian Cato Institute by two leading sports economists who summarized the academic consensus.

Rodney Fort, a professor of sports economics at Washington State University, said the Renton study might be overstating the tax revenues it claims. In a quick review of the study Wednesday, Fort said it appears the arena would not generate enough new taxes annually to cover bond payments.

But Sonics supporters and the study's authors said merely fixating on tax dollars generated by the arena misses the larger picture. The arena also may be justified on more intangible grounds, they said, such as its effect on the region's quality of life.

"It depends on how narrowly you interpret the question," said Michael Hodgins, the Berk researcher who co-authored the study.

"It's not a profit-making venture, and the county shouldn't look at it as a profit-making venture," said Jim Kneeland, spokesman for Bennett.

Rather, the arena would become an icon like Qwest and Safeco fields, he said.

"There are few people who would argue against the fact that Safeco and Qwest provide a benefit to the community that is both economic and cultural," Kneeland said.

It's not clear whether the new study will help or hinder the Sonics' efforts in Olympia, where arena legislation has been stalled for weeks.

Over the past few months, Sonics lobbyists have met one on one with nearly every legislator and the governor. The team has found a few enthusiastic allies among both Democrats and Republicans.

The Sonics want to extend several existing taxes, collected only in King County, that currently are dedicated to paying off the debt on Safeco and Qwest fields.

But overall, support for the tax package has been tepid.

Last year, Democratic Gov. Christine Gregoire tried to broker a deal for a taxpayer-financed renovation of KeyArena. But she has been keeping a low profile on the issue this year.

That's partly because the governor has seen no indication that building a new arena for the Sonics is a high priority for the public, said Marty Brown, the governor's chief lobbyist.

Still, Gregoire this week said she has asked legislative leaders to meet with House and Senate members to gauge their enthusiasm for the proposal.

During a closed-door presentation Wednesday morning to Senate Democrats, Prentice went over some of the highlights of the new economic study and made a pitch for moving forward on the proposal.

Sen. Jeanne Kohl-Welles, who supports the arena, said she thinks it still has a chance to clear the Senate.

"It's not a slam dunk, and it's not a 'hell no,' " said Kohl Welles, D-Seattle. "There's a lot of people who are really torn."

The House is clearly the Sonics' biggest hurdle.

House Speaker Frank Chopp has expressed disdain for the proposal, and Rep. Ross Hunter, chairman of the House Finance Committee, said he's heard almost zero interest from fellow Democrats.

Hunter said he doesn't think there is any way the Sonics will be able to sell the proposal on economic grounds. While it might pencil out as an economic gain for Renton, he doubts the team will be able to make that case statewide.

Jim Brunner: 206-515-5628 or

Copyright © 2007 The Seattle Times Company


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