Normally you would have to rely on opponents of sports stadiums and convention centers to expose the myth that they boost local economies.
This year it’s the backers of a bill under consideration in the state House of Representatives who are doing that work (inadvertently … I think).
Remember hearing how stadiums are a sure way to spur economic development in the downtown neighborhoods they share? You know, restaurants and bars and nightlife?
Then there’s the sales pitch that investing tax dollars in convention centers is great economic development, getting out-of-towners to drop their cash in your cash registers to create hundreds – if not thousands – of great jobs.
House Bill 1997 involves a batch of taxes now being used to pay off debt for the Kingdome, Safeco Field and Qwest Field. Once the stadiums are paid off – Safeco this summer, the Kingdome in 2015 and Qwest in 2020 – some King County-only taxes on hotel rooms, rental cars and restaurant tabs would go toward different things.
“Workforce” housing. Programs to help the neighborhoods surrounding the stadiums. Culture and historic organizations. An expansion of the state convention center in Seattle. All would split up $467 million over the next 25 years.
Only the arts has been a recipient of stadium tax revenue up until now. But its share of some Kingdome hotel-motel tax revenue gets shifted to Qwest Field next year.
But why does Pioneer Square and the International District need a special boost of $1 million a year? Haven’t those neighborhoods benefited from all those fans going to and from Safeco and Qwest?
Apparently not. The stadiums are designed to capture as much fan money as possible. The neighborhoods settle for a trickle in return for enduring crowds, noise, parking problems and litter.
Putting $5 million a year into low-income housing sheds light on a dirty little secret of the hospitality industry. Many of the jobs created are so poorly paid that those holding them need food and housing subsidies.
So why would the state promote an expansion of the convention center to create jobs it must then subsidize? Once again, politics trumps economics. Expansions are backed by construction labor unions whose members want the well-paid but temporary jobs. Downtown business owners, especially hotels, also support the expansion.
Backers, led by King County Executive Dow Constantine, say the center frequently turns away business when the building is already booked. Having enough space to accommodate two or even three conventions at a time assures that won’t happen, promoters and their consultants say.
But while there surely are such scheduling conflicts (though they’re always overstated), Seattle suffers from too little business, not too much. That is something it shares with every other convention city in the nation.
In 1997, the Seattle facility drew 184,000 out-of-state visitors. These are the ones who rent rooms and eat in restaurants – the supposed economic purpose of convention centers. In 2009, despite an earlier expansion designed to allow more than one convention at a time, attendance fell to 140,000. Last year it fell again to 85,000.
The recession gets some of the blame. But market share was already dropping before the economic collapse. That’s because so many cities have built or expanded convention centers that there is a unfillable glut. It will remain unfillable once the recession ends.
Safeco Field is nearly always sold out for opening day and for the Yankees and Red Sox. Does that make it too small? Should it be expanded to capture this “lost revenue”? Probably not, since building to the maximum possible demand would be very expensive and capture only incremental additions in revenue. In the meantime the oversupply of seats – empty for most other games – would hurt the team’s finances in the long run.
Only in the tax-supported convention center business do managers and consultants think the solution to a shortage of demand is to create even more supply.
All to create permanent jobs that require permanent subsidies.
Peter Callaghan: 253-597-8657 peter.callaghan@thenewstribune.com blog.thenewstribune.com/politics
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