The city of Kent-owned accesso ShoWare Center will get capital improvement funds from the King County lodging (hotel, motel) tax if revenue exceeds the baseline projections.
The King County Council on Monday unanimously approved an amendment to a lodging tax ordinance to include $200,000 per year until a total of $2 million is reached for upkeep at the ShoWare Center as long as revenue comes in higher than projected. The arena would start receiving funds in 2021.
Last week, the council dropped the 6,200-seat arena from the ordinance that approves spending $135 million of the lodging tax for maintenance and repairs at Safeco Field. An amendment to the measure cut the funding to the arena and other tourism dollars to South King County to spend more on affordable housing.
But King County Council members Reagan Dunn, whose District 9 includes part of Kent, and Pete von Reichbauer, whose District 7 includes Federal Way and Auburn, co-sponsored the amendment to get funds for the ShoWare Center. The arena is first in line for any funds higher than projections. Kent Mayor Dana Ralph testified at the meeting in favor of funds for the events center.
“Any overage over what has been allocated, the first $200,000 of that per year, comes back to ShoWare Center,” Ralph said during an interview Tuesday at City Hall. “The thing that gives me confidence is they took their baseline projections and backed them down to about the 65 percent level, so the economy would have to really drop before we wouldn’t see an overage in that estimate. It’s an extremely conservative estimate about what will come in.”
The lodging tax is expected to bring in about $1.3 billion from 2021 to 2043, according to county documents. County staff estimates about $38 million in lodging tax revenue in 2021 and as much as $53 million in 2031 and $82 million in 2043.
The initial proposal by County Executive Dow Constantine included funding for the ShoWare Center. The revised measure took those funds away as the council shifted about $115 million from general tourism promotion to increase the amount allocated to affordable housing to $661 million.
“It doesn’t give me huge concern,” Ralph said about the arena not being part of the baseline funding. “We would have loved to be included in that package as a guarantee, but I’m reasonably confident we will see that money. It will be a good infusion of capital as that building starts to age. We are very grateful to the King County Council.”
Since 1967, hotel/motel taxes have funded regional sports stadiums (starting with the Kingdome) and also, later, arts programs. With the last of the CenturyLink Field debt paid off by 2020, King County leaders looked at new ways to spend funds from the tax starting in 2021, according to a county news release. As created by state law, the tax has no sunset.
State law requires King County to spend certain minimum amounts of the new hotel/motel tax money on specific purposes, such as arts/culture and housing. State law also stipulates that the remaining funding (up to 25 percent of the money) can be used for tourism promotion.
The council voted 5-4 to approve the ordinance on Tuesday. The measure reduced Constantine’s proposal of $180 million targeted for Safeco Field to $135 million.
Councilmembers Kathy Lambert, von Reichbauer, Dunn, Claudia Balducci and Joe McDermott voted to approve the measure. Dave Upthegrove, Larry Gossett, Jeanne Kohl-Welles and Rod Dembowski voted against it because too much money went to Safeco Field, the home of the Seattle Mariners.
“This proposed policy, giving $135 million to the benefit of the Mariners is fiscally irresponsible, economically dumb and out of step with the voters,” said Councilmember Upthegrove, whose District 5 includes parts of Kent.
The ShoWare Center opened in 2009 and has lost money each year although revenue is up so far in 2018. A Public Facilities District board oversees the arena similar to the board that oversees Safeco Field.