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Group building new Seattle arena seeking $90 million in tax relief

The group building a new arena and headquarters for a new NHL team in Seattle wants a sales tax deferral of $80 million to $90 million.

The Seattle Arena group is seeking tax relief in Olympia for three different construction projects, including the new arena at Seattle Center.

Oak View Group Chairman Tim Leiweke was at the state capitol Wednesday seeking a three-year sales tax deferral from state lawmakers. That would amount to $80 million to $90 million, which would be repaid. 

“This is just the final piece of trying to lock everything in,” Leiweke told KING 5 while on his way to Olympia. “The city will always continue to own the asset, so because of that, we had to sit down with the state and work through exactly how we're going to pay the sales tax on the project.”

That means seeking legislation to allow for a repayment plan, with interest, on the cost to build the arena, parking garage, plus the new training facility and headquarters at Northgate

House Majority Leader Pat Sullivan, D-Covington, is believed to be interested in sponsoring the bill. His spokesperson said the introduction of the bill could happen by the end of the day.

"It’s great for the taxpayer, who won’t have a dime of their money involved, and it’s also great for our state," Sullivan said in a statement. "We get two brand new facilities, a professional NHL hockey team, and an economic development opportunity that works for everyone.”

There is significant precedent for such a move. Boeing and Amazon have both benefited from tax deferrals, and legislation allowed similar sales tax construction deferrals for the building of Tacoma’s LeMay Car Museum, Seattle’s CenturyLink Field, and Safeco Field - now T-Mobile Park.  

The Washington State Department of Revenue has a full page of incentives to attract business and lists tax deferrals as one of them.

Of course, some deferrals are larger than others. First and Goal was able to pay back more than $30 million on what is now CenturyLink Field. 

The Washington State Public Facilities District says roughly $32 million was paid back on the then-Safeco Field construction between 2005-2015. The ballpark opened in 1999. Kevin Callan, spokesperson for the PFD, says payments of roughly $3.2 million were paid annually with no-interest to the state.

OVG is asking the state to pay back the $80-90 million beginning in 2022, through 2030, with interest.

“It's a mirror image of what they did on the baseball stadium and the football stadium,” Leiweke told KING 5.  “This is all private and all we're doing here is living within the precedent that they've created on these facilities, although ours is unique because it's the private sector that is paying for this.”

RELATED: New Seattle Center arena to cost an estimated $850 million

He stressed, “We're paying taxes on everything, we're going to pay all the taxes on the arena, all the taxes on the parking garage, and all of taxes on the training center, and we're going to wrap all of this in, so it's between, the project as a whole, we're at a $1.7 billion including the hockey team, and the purchase of the hockey team, so this is on the construction side of the equation and if you look at the straight construction it's about $925 million we're spending privately to build all three facilities.”

Leiweke says his company is trying to finalize the legislation by February 15, which he says is the date the city should finalize financing and other agreements.  There has already been work done inside the existing KeyArena on the $850 million arena project. But, he says, based on the timing of the legislative session, this is the first time his group has had a chance to talk with lawmakers.

Seattle’s mayor nor council members could be reached for comment.

The National Hockey League awarded a franchise to Seattle, to begin play in 2021, at the New Arena at Seattle Center.

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