If a proposal to allocate about $180 million in lodging tax revenue for future Safeco Field maintenance is not approved, the Seattle Mariners could scrap a planned lease extension.
The Mariners are currently playing at Safeco Field under a lease that expires at the end of this year. In May, the club announced a 25-year lease extension with the Washington State Major League Baseball Stadium Public Facilities District (PFD), with two three-year options that could extend the team’s stay through 2049. It also called for future Safeco Field upgrades. The two sides commissioned a study by Populous, which found that $385 million over 25 years will be needed for capital improvements to ballpark infrastructure. Additionally, another $160 million is expected to cover upgrades beyond any infrastructure enhancements. Over the course of their new lease agreement, the Mariners would be expected to pay $250 million toward ballpark maintenance, plus $120 million toward a capital expenditure fund.
To cover funding for some of the future upgrades, King County executive Dow Constantine proposed directing 12 percent of hotel/tax revenues to the PFD, with roughly $180 million over time going toward Safeco Field. That plan has not been brought up for a vote yet, and it has been met with skepticism from some King County officials who contend that the revenue could go toward affordable housing. It initially seemed that the proposed lease extension was a stand-alone agreement from the approval of those funds, but a new report shows that the Mariners view the extension as being contingent upon approval. If the funds are not approved, it would likely require the Mariners and the PDF to go back to the drawing board in their negotiations. More from Seattle Weekly:
The Seattle Mariners began negotiating terms for the lease renewal with the Public Facilities District (PFD)—the municipal corporation that manages Safeco Field—roughly a year ago. The Mariners’ current lease expires at the end of 2018. On May 23—the day the county announced its plans to fund stadium upkeep—the team said it had agreed to terms on a potential new 25-year lease. At the time, representatives of the PFD portrayed the agreed-upon lease terms as not tied to the proposed tax-revenue allocation. Kevin H. Callan, executive director of the PFD, told Seattle Weekly that the lease agreement was a “stand-alone set of terms.”
But according to emails between representatives from both the PFD and the Mariners obtained by Seattle Weekly through a public-records request, the team was explicit about its position that receiving the $180 million from taxpayers was part of the deal even though it was not specifically spelled out in the language of the lease’s contract. “As confirmed and set forth in prior communications with the PFD’s lease negotiation team, final lease agreement is conditioned on King County’s approval of an allocation of a portion of the county’s lodging tax revenues,” wrote Fred Rivera, Seattle Mariners executive vice president and general counsel, in an early June email to PFD board member Virginia Anderson.
“We’ve always heard that the term sheet would be conditioned on receiving a portion of the hotel/motel tax,” Callan told Seattle Weekly on June 26. He said that the Mariners are “pretty serious” about the condition: “If they don’t get something that is satisfactory or substantial enough to meet that condition that they’ve written, then we’ll probably be back at the drawing board and we’ll be starting over again.”
The Mariners are not shy about discussing this condition—the team views it as fair for King County to contribute to maintaining the publicly financed Safeco Field. “This [stadium] is owned by the county, and the question is how much should the county pay for its building?” Rivera told Seattle Weekly on July 20. “The discussion [between the Mariners and the PFD] was ‘What’s a fair amount for the club and for the PFD to contribute to make sure that those nuts-and-bolts items are appropriately taken care of over the next 25 years?’ and that’s what resulted in this financing plan.”
To be clear, the Mariners are not threatening to relocate from Seattle. Rather, the implications are that the Mariners and PFD will have to begin lease extension negotiations anew if the lodging tax funding is not approved.
Under state law, at least 37.5% of lodging tax funds are to go affordable housing, with at least the same portion going toward arts programs, leaving the rest available for tourism promotion (which is where the Safeco Field funding would come from). Some King County officials, however, contend that the county could spend more than the minimum required for affordable housing by diverting funds away from tourism. Historically, lodging tax revenue has been a key funding source for professional sports facilities in King County and is currently being used to pay off construction debt from CenturyLink Field–home to the NFL’s Seahawks and MLS’s Sounders. However, the last of that debt is slated to be paid off in 2020, freeing up $36 million per year for other expenditures starting in 2021.