Sonics arena analysis offers rosy look

Under the most optimistic of circumstances, a new arena for the Sonics would help support 5,799 jobs and generate $340 million in taxes for state and local governments over 25 years, according to an economic analysis released Wednesday.

However, a more conservative projection shows that if the arena lasted for a quarter-century, it still wouldn't produce enough tax revenue to cover the initial public subsidy the professional basketball team is seeking from the Legislature.

Those were among the key findings in a report by Berk & Associates, a Seattle-based consultant that also showed the city of Renton could reap up to $20.5 million in taxes over 25 years from the arena.

Renton Mayor Kathy Keolker, whose city commissioned the economic analysis, urged lawmakers to use the report as justification to fund the Sonics arena. However, two others -- an advocate for taxpayers and an economics professor who studies arena financing -- criticized the plan as too rosy and questioned whether the projections would come to fruition.

"It just doesn't pencil out, but that doesn't surprise us at all," said Chris Van Dyk, founder of Citizens for More Important Things. "This is not a comprehensive cost-benefit study. That is what is wrong with this thing."

In Olympia, legislation that would authorize a $300 million subsidy for the Sonics arena likely has enough support in the state Senate, but its fate in the House is unclear. Democrats control both chambers. The subsidy would come from taxes on hotel and motel rooms, car rentals, restaurant meals and a sales tax credit.

Senate Ways and Means Chairwoman Margarita Prentice, D-Renton, briefed her colleagues on the legislation and the economic benefits of the proposed $500 million, multipurpose arena. Prentice has been a major supporter of a new arena, but senators said they are reluctant to take a vote unless there's some sign of support in the House.

While Keolker lauded the benefits a new arena would bring to Renton, she also said the city has not made a firm commitment on how much it would contribute for the arena. Earlier reports indicated Renton could be on the hook for up to $100 million.

Alex Pietsch, Renton's economic development administrator, said the city has up to $72 million in debt bonding authority it could use without a public vote. He also said the mayor is not willing to commit any of "this capacity without sufficient revenues to pay the debt back over time."

Jim Kneeland, a Sonics spokesman, said the private sector -- or the amount the Sonics are responsible for -- is "in the neighborhood of $100 million or more."

"One of the reasons we can't give a precise amount is because we don't know what the city will do," Kneeland said. "Our commitment was, we would fill the gap."

In addition to Keolker, the report garnered support from the Washington Labor Council, the Seattle Sports Commission, Renton's Chamber of Commerce and some Renton business owners.

The report said a new arena would generate nearly $205 million in state and local taxes over 25 years if the facility has 153 event dates, which includes Sonics and Storm games, concerts, family shows and meetings.

That tax figure is two-thirds of the subsidy that lawmakers are considering.

The report also said the total tax revenue jumps to $340 million if the arena hosts 223 events and becomes home to a National Hockey League team, two major conventions and five corporate meetings. That projection also assumes the Sonics and Storm will make the playoffs at least every other year and the arena attracts a significant NCAA event every other year.

Rod Fort, an economics professor at Washington State University, doubts the figures will pan out, and he said a new arena in Renton would just shift money from Seattle.

"Just because you have a new arena doesn't mean you will get it booked up solid," said Fort, who studies the economics of sports arenas.

Fort also questions whether an arena would create new jobs.