The City of Seattle's Office of Economic Development plans on exempting a KeyArena renovation from a voter-approved initiative to limit city subsidies for pro sports venues.
Initiative 91 was approved nearly three-to-one back in 2006 and mandated that Seattle received fair value on the return of investments no less than the rate of return on a U.S. Treasury Bond. It came amidst a voter revolt about taxpayer-funded subsidies for professional sports teams and the construction of Safeco and CenturyLink fields. It was a contributing factor to the Sonics' inability to build a new arena and their departure to Oklahoma City.
There were questions raised at a council review on Monday that the city could have to bond a transportation fund as part of a KeyArena renovation package. There have also been questions raised about the construction of the tentative Memorandum of Understanding, and whether tax breaks or parking revenues could equate to public financing.
City leaders, however, did not reveal the language of the ordinance for the renovation proposal, which shows the legislation "exempting the redevelopment and future operation of the Arena from the requirements of Chapter 20.47 of the Seattle Municipal Code; and ratifying and confirming certain prior acts."
Three city officials told KING 5 Tuesday it wasn't a big deal, equating the issue to semantics.
Mercedes Ellzalde, a legislative assistant for Councilmember Debora Juarez, called I-91 and this KeyArena proposal like trying to fit "a square peg into a round hole." Juarez is the chair of the Civic Committee on Civic Arenas. Ellzalde noted since the city isn't putting money into the private project, I-91 doesn't apply. She also noted that the city is also leasing the space, and maintaining ownership of the property.
"(It's all about) what fair value we think we're getting," she said.
"We are pretty confident it is compliant with I-91," OED Director Brian Surratt said. "We added that provision because I-91 was written at a different time, in a different circumstance."
Surratt also noted that the city has a similar arrangement with the WNBA's Seattle Storm.
The SODO Arena proposal went to court after it was first approved, over allegations it violated I-91. At the time, the SODO group asked for $200 million in public bonding. That case was thrown out of court. The man who helped craft it on the council side is now mayor.
Tim Burgess was sworn as Seattle's newest Mayor on Monday and was asked about whether he believed the KeyArena MOU was I-91 compliant.
"I do," he told KING 5, "but I think the City Council will also make a judgment about that that solves that issue."
The new mayor added, "Depending on the decision the City Council makes on that proposal, while that’s important, how that affects Seattle Center as a whole and the Uptown neighborhood is critically important to me. If the KeyArena proposal is accepted, it gives us an excellent opportunity to make sure that that neighborhood is able to thrive and grow as that arena is developed."