Saturday, March 20, 2010

Senate Passes SB 6889 Convention Center and Public Facilities District Bill

SB 6889 passed on the Senate Floor 39 to 1 with 9 not voting.
SSB 6889
Convention and trade center
Senate vote on 3rd Reading & Final Passage
3/20/2010

Yeas: 39   Nays: 1   Absent: 0   Excused: 9

Voting Yea:  Senators Becker, Berkey, Brown, Carrell, Eide, Fairley, Franklin, Fraser, Gordon, Hargrove, Hatfield, Haugen, Hewitt, Hobbs, Honeyford, Jacobsen, Kastama, Kauffman, Keiser, Kilmer, King, Kline, Kohl-Welles, Marr, McAuliffe, McDermott, Murray, Parlette, Prentice, Pridemore, Ranker, Regala, Rockefeller, Schoesler, Sheldon, Shin, Stevens, Tom, and Zarelli
Voting Nay:  Senator Oemig
Absent:  
Excused:  Senators Benton, Brandland, Delvin, Holmquist, McCaslin, Morton, Pflug, Roach, and Swecker


Next stop, the House of Representitives.

The Senate Ways and Means Committee passed SB 6889 on Friday.

Here is the Senate Ways & Means Committee Report that says on page 3 that the new PFD would gain control over not just the Seattle hotel tax that pays off the Convention Center, but it also controls the county wide 2.8 hotel tax.

19 comments:

Anonymous said...

I'm cautiously optimistic for the 2,456th time. But things are lining up for the something like this to exist and I believed you predicted this way back when. My only question is with our legislature is it in the realm of plausibility that the House will either strip this bill clean or against all good judgement vote against it? Only time will tell.

Mr Baker said...

They can not kill the bill completely, unless they have $57 million dollars laying around to pay back the fund.
The bill must pass, a PFD will be created. I think those two elements happen.
The stripping of the 2.8% county-wide hotel tax is the item at risk in the House.

I have to wonder if the other taxes, restuarant, car rental, will die.
I think it would be great if 4Culture got that car rental tax to help some groups operate, and then tap part of the county-wide PFD for "entertainment, and tourism" infrastructure.

They pretty much sidestepped HB 2912.
Building stuff is good.

Mr Baker said...

I think it may still take a "jock tax" to build an arena. The Convention Center account has run a surplus (that is what the state has been taking. That is, if you want a new palace.
Going back a year, Seattle was asking for 1% of that 7% (5% please 2% tax credit) that is being transferred to the new PFD (follow me). Seattle retains that right to the 2% tax credit.
The issue here may be that the economy hurts the fund and the hoteliers do not want to put their current loans at risk.

I think the dedicated "jock tax" should be imposed. The county should form a PFD for arenas to use that tax.

BTW, the arts bill could still pass, the Kingdome and Safeco hotel taxes are different, though we have seen what kind of progress they have made.

What I am after is the a sliver of the convention center tax that s controlled by the city, and the county's authority to create a PFD.

Mr Baker said...

how I make the leap, from Convention Center taxes to being able to slice a part off for sports facilities, HB 6889 repeals RCW 67.40.110, "Use of revenues from convention and trade center facilities excise tax by cities for professional sports franchise facilities limited.
No city imposing the tax authorized under chapter 67.28 RCW may use the tax proceeds directly or indirectly to acquire, construct, operate, or maintain facilities or land intended to be used by a professional sports franchise if the county within which the city is located uses the proceeds of its tax imposed under chapter 67.28 RCW to directly or indirectly acquire, construct, operate, or maintain a facility used by a professional sports franchise."

The Convention Center funds have been prevented from building anything related to pro sports. Last year's effort would have required this kind of change in that law, or some other change.
HB 6889 repeals RCW 67.40.110

The convention center could build an arena on thier own if they wanted to (very unlikely).

Mr Baker said...

In my haste I think I have conflated two different buckets of money.
The taxes in SB 6889 are the hotel taxes curreny used for the Convention Center. Two weeks ago the state was taking back its 2% sales tax matching. This bill replaced those funds by giving that authority to Seattle. The 7% stays in tact. A year ago Seattle was after 1% of that, it was going to be stripped, now it is not.
It was possible that they would not have the county wide 2.8%, now they do.

HB 2912 could still pass, it could extend the other hotel taxes going toward Safeco and the Kingdome, they could extend the care rental tax, and extend the restuarant tax for 2 years. Or not.
It would be more money, or not.

When SB 6889 passes the Convention Center PFD can build its expended facility, there would likely be enough for Seattle/king County to use the 1% they were looking for last year from the hoteliers, no matter what happens to HB 2912.

HB 6889 repeals RCW 67.40.110, "Use of revenues from convention and trade center facilities excise tax by cities for professional sports franchise facilities limited.
No city imposing the tax authorized under chapter 67.28 RCW may use the tax proceeds directly or indirectly to acquire, construct, operate, or maintain facilities or land intended to be used by a professional sports franchise if the county within which the city is located uses the proceeds of its tax imposed under chapter 67.28 RCW to directly or indirectly acquire, construct, operate, or maintain a facility used by a professional sports franchise."

They can build whatever they want.

A "jock tax" as described in Senator Tom's amendment to HB 2912 would, I think, get you pretty darn close to a combined Convention Center and arena.

The Convention Center Board of Directors might not want to have that kind of partnership. By June 2011 that BOD is to be comprised of 3 people appointed by the county, 3 people appointed by the largest city, the rest by the governor (1 gov appointee must be a hotelier, 1 must be a union rep). The board may be comprised of people other than all of its current members. None of those board members can be current office holders.

bmac said...

three questions, 1) Baker, because Key Arena is city owned would this PFD be able to renovate w/o the city involved or do you think a PFD would go for a brand new Arena.Seems there could be conflict between city and county towards a Key redo. Now that this is so close im worried they will just try to renovate the Key and not make it NHL compatible. I pray they are not shortsighted again.question 2) Who is the guy that repealed the language re "taxes to professional arenas" i want to personally send him some champagne.3) would the 2.8 county hotel tax be enough for an arena on its own or would Balmer be required to help out and would this PFD cover a Husky Stadium remodel as well. I know thats 4 questions but whos counting. ps i find it ironic that i follow this blog and SC everyday for 2 years re this arena issue and i go away to the ocean for 3 days w/o internet access and come home to this news. This is better than Christmas.

Mr Baker said...

There would be enough money, the 1% Seattle was looking for last year.
Politicly I think the city is unlikely to parter with the county on a remodel, though both will have 6 of the 9 board positions on the new pfd.

I think you look at the 770 million dollar effort the Convention Center is wanting, and you go after an jock tax. The combination at Seattle Center would have cost 960 million.
If I am looking at 770, and I need to get to 960, or a full billion, I think you have to make that effort.
If Steve Ballmer is still interested, and he is still just "looking for a partner", I think the convention center folks are the better way to go.

http://www.nytimes.com/2010/03/17/sports/17teams.html?src=me

Mr Baker said...

Here, read this story.

http://crosscut.com/blog/crosscut/18600/

this is pretty much where this story got hung up by the legislature.

bmac said...

when was there a convention center arena combo for 960 million at the center, i dont recall that proposal? was that a key redo? or new arena, also will husky stadium be a benefactor of 6889

Mr Baker said...

I suggested that David Brewster take another look at that story when SB 6889 passes.

Mr Baker said...

There was nothing in the legislature about that, I kept asking David Brewster in his stories he was writing in support of the Convention Center folks. The link I posted addresses that issue. The city thought the price tag at Seattle Center got to high at 950 million. The Convention Center folks looked "favorable" on a KeyArena remodel, the worried that there would not be enough money to do both a remodel, and expand the convention center.

The legislature took that 1% off the table last year, SB 6889 puts it back in the table, and moves the table to King County, where the city and county will have 6 of the 9 seats at that table. Enough with the table analogy, but it works well there.

With a change in "leadership" maybe the city would support a new convention center/arena combo some place else in the city, or... Maybe the county's 3 seats on the board and the 3 convention center folks decide.
I don't know, but I am goingto push idea again.

Here is a question, is the space for the convention center expantion big enough for an arena, is there space near it?

I think plenty of people will see these funds as public money that should not get spent on an arena. For that I think the jock tax would be useful, as well as getting to 950 million dollars.
IMO.

Mr Baker said...

I do not see how husky stadium could benefit. There isn't enough money, and I don't know how the pfd and the state owned stadium could work that out.

What I will say is that moving the demands of pro sports away from those other tax sources on to the pfd, with a jock tax, can't hurt the other bills, possibly making passing a bill like HB 2912 for arts, husky stadium, whatever, less difficult.

Peter said...

so i'm confused, we can't use the city hotel tax used to pay off the convention center to build an arena, but we CAN use the county hotel taxes? or were they stripped?

Peter said...

"They can build whatever they want."

so they could build an new arena, but is there any funding source to draw up plans for an brand new arena? is there anything in the bill that would let the county get funds to hire an design firm to get plans for an new arena?

Mr Baker said...

These are two different buckets of money, both involving hotel taxes.

Two years ago the city gave up on the stadium (hotel) taxes and started going after a slice of the Convention Center taxes (a different hotel tax).
The city wanted 1 of the 7% within Seattle (there is another 2.8% charged in the rest of King County for the convention center).
Part of that 7% used a sales tax credit against the the base sales tax rate. If you stay in a fancy hotel in Seattle you pay just over 15% in just sales tax (5% hotel tax + 2% sales tax credit gives you the 7. The state gets its regular sales tax 10-ish minus the 2% sales tax credit = 15) the state loses that 2% from the general fund and the convention center gains that revenue.
Last year the state was going to take back part of that sales tax credit, 1%, leaving Seattle nothing to go after.
This year the early bills had the state taking back 2%, and all the money they took from fund, and they were going to give Seattle the authority to apply another 2% tax on top. The convention center would still have 15%, but now the tax rate on a hotel would jump to over 17%.

There was some thought that they could lose the county portion.
The current bill that has passed the Senate and is on the House floor calendar keeps all of those original taxes in place, the 2.8 county-wide, the 5% and the 2% Seattle sales tax credit.
The 1% Seattle wanted last year is back in there.
Those taxes are under the authority of the new PFD. The pfd board must be made up with 9 members, 3 appointed from the city, 3 from the county, 3 from the governor (the governor's 3 must include 1 hotelier, and one union rep).
The bill also repeals the law that prevents the convention center from using its funds on a pro sports facility.

They will have more than enough money for a convention center, and nothing prevents them from entering into a contract to build a sports facility.
It is unlikely that they just build an arena, very unlikely. They are in the convention center business.

But, If they find the right partner (and I know that there is a strong interest in something like this) they could build a convention center/ arena facility in Seattle. That is within their power and authority.

Btw, this has nothing to do with the "stadium taxes" and bill HB 2912. That is a different bucket of money.

If HB 2912, or some stand alone bill, passed to tax the jocks and dump that money into the convention center pfd account (exectly like Senator Tom's amendment) then I think there would be enough money for a new arena, and all of the other factions that want money from HB 2912 could keep it all for all I care.

Peter said...

"There would be enough money, the 1% Seattle was looking for last year."

so there would be enough money for keyarena regardless?

"It is unlikely that they just build an arena, very unlikely. They are in the convention center business."

could they build an arena and a convention center on different land?

"If HB 2912, or some stand alone bill, passed to tax the jocks and dump that money into the convention center pfd account (exectly like Senator Tom's amendment) then I think there would be enough money for a new arena."

so tom's admendment gives the PFD that money?

Peter said...

some questions, in order to use the funds for keyarena, would they have to make it an county owned facility?

so it sounds like if this passes, we'll either end up with an convention center/arena combo or a key remodel? if a combo falls apart i hope they can a least build an convention center AND new arena seperatly. we could always use the tax after the convention center is paid off. after all, they have the authority, don't they?

if it is possible, i think we should hire another design firm like popolous if we end up with an keyarena remodel. i saw on wikipedia that the same company they hired for the ballmer remodel also designed the original key remodel. i want no part of that. it does say something in the bill about designing an facility w/ the PFD funds.

bmac said...

it passed!!!!!!!!!!!!!!!

Peter said...

baker,

how long does the hotel tax go on in the bill that passed? if the hotel tax in the bill goes on as long as the PFD wants, and the state went out of their way to give the county authority to build sports facilites,(even repealing that law), can't the PFD just fund an arena after the convention center is paid off and bond against it now? if the county has the authority and the tax goes on forever anyways, then as long as the convention center people get their convention center, i don't see how they would have a problem w/ funding an arena after that.

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