Seattle Times heir Ryan Blethen writes today that "Politicians should seriously consider" subsidizing a proposed NASCAR racetrack to the tune of nearly $200 million.
Posted by Stefan Sharkansky at April 14, 2006 12:13 PM | Email ThisIf Ryan thinks that a racetrack is such a wonderful idea, perhaps he should write the first check to prove just how much he really supports taxpayer-financed handouts to those who least need it?
In fact, if $200 million is available, I know of a few gridlocked roads that could use some much-needed improvements.
Posted by: MJC on April 14, 2006 12:26 PMWith that said, why not use a bank instead of the taxpayers. As they want to go to the taxpayer, it implies the finances are not quite on the level and taxpayers will end up footing some of the bill.
Posted by: Fred on April 14, 2006 12:51 PMThis is similar to the State's involvement with our states healthcare system. Hospital's have used the States authority to to issue tax-exempt bonds for hospital construction through a State agency. The Hospitals repay the bonds from their own operations.
I'm not sure what the Sonics were asking for.
Don't get me wrong. I have the same desire to see a car race as I have to be admitted to a hospital.
Posted by: Gary B on April 14, 2006 01:00 PMNASCAR fans are out there. If the market data shows that they would support a track, then get private money and build it. Don't turn to the public to raid the tax coffers, because all that's going to do is diminish your fan base and create an artificial scenario for a business that may not actually be financially viable.
Posted by: Jeff B. on April 14, 2006 01:06 PMThe "way" is easy. Have these people pay for ALL of it. Not one DIME of taxpayer money. For this track... for the Sonics... for ANY professional sport.
We got screwed by the Mariners, We're getting screwed by the Seahawks, and there are so many other things our tax dollars need to go for first.
With Seattle Schools as messed up as they are... I'm surprised you didn't know that.
Simple. They have no way - and no real desire - to control their labor costs.
There are a lot of other factors, but that's the bottom line. Pay your 'workers' millions and millions and millions of dollars - with no limit in sight - and expect to have a flawed business model.
Posted by: jimg on April 14, 2006 01:37 PM"International Speedway Corp.'s attempt to build a racetrack in Washington is running on fumes"
Actually, the cars would be running on vapors. Fumes are solids, much like smoke, whereas a liquid such as gasoline would evaporate into a vapor.
"ISC has done the groundwork legislators blasted the Seattle SuperSonics for not doing."
Should be
"ISC has done the groundwork that legislators blasted the Seattle SuperSonics for not doing."
"ISC should seriously reconsider its site, though."
(comma usage)
I am not an english major, so I may be wrong about a few of these things, but I do know that the editors at the times need to be sacked, as some of what he writes needs to be re-read by me for me to understand what he is trying to state.
Posted by: Jason Woodruff on April 14, 2006 02:56 PMWhy do sports go to the government to get money? Because as taxpayers and as politicians across this country, we have a hard time saying "No."
Posted by: Jonathan Gardner on April 14, 2006 04:06 PMI hope that you're right! However, I would not be shocked if this legislature finds a way to make it happen, especially if they are spending our $$$.
BTW, will the track have a roof? If not, how many races will be canceled due to rain?
Personally, I am sick of sports franchises holding out their hats. If they can't figure out a way to finance their business, too bad.
Posted by: Shaun on April 14, 2006 06:25 PMBusinesses of all sizes and shapes don't use lobbyists and trade assocations to advocate for earmarks that will fund research and development or build infastructure that will assist in operating their businesses.
Yeah, it's too bad sports teams can't be run more like a business.
I have no qualms with the idea of the Sonics seeking taxpayer assitance for bonds or stadium funding - I doubt anyone can name 10 Seattle based businesses who employ more than 150 people that haven't attempted to seek some form of benefit from the government that ultimately comes out of the pocket of the taxpayers.
I do have a problem when I go to a Sonics game and the seats are half empty and then later have someone tell me that the reason the place was empty is because the stadium isn't nice enough. That leads me to believe that the Sonics management aren't terribly intelligent. Afterall, have you ever heard someone talk about a sporting event they attended along the lines of "man that was a great game, but that place they play in is a dump, I'm not going again?"
Posted by: Chris on April 14, 2006 06:46 PMActually, the financing proposal released on November 30 calls for an investment of $166 million by International Speedway Corporation through its subsidiary, Great Western Sports, Inc.
The state, through a "public speedway authority," would issue bonds totaling $166 million which would be paid by the state sales tax, and another group of bonds totaling $13 million which would be paid by a tax on admissions tickets. (The county's authority to impose a 5 percent tax on admissions tickets would be handed to the PSA. The county would then get one fifth of the revenue from the PSA's admissions tax to offset costs of hosting the track, leaving 80 percent of the tax to retire the bonds.)
His idea of putting the track in eastern Washington is silly. It would take roughly 25,000 hotel rooms to house the fans. There aren't that many hotels out there -- and no one is going to build them when they're only used a few days a year for the two major racing event weekends.
Posted by: Micajah on April 14, 2006 07:39 PMThe phrase “testimonials slathered” actually is something special. Googling it with my browser gave only one return (a pretty funny one). Of course maybe that site wasn't where RB copped the phrase . . ..
Posted by: grabowski on April 14, 2006 07:54 PMNASCAR would be a BOON to this pathetic, tree huggin, development complaining, save the forest state!
I would vote FOR NASCAR waaaayy ahead of a handout to Mr. Shultz and his Super Sonics!
Posted by: SP Fan on April 15, 2006 09:29 AMAny number of stadiums on the East Coast were built with the owner's money, not the taxpayers. Yankee Stadium was built by the owners.
West Coast tradition demands that taxpayers are expected o finance all manner of things including sport palaces.
Obviously, profitable enterprises neither require or desire taxpayer financing. Owners are quite content to keep the wealth. So with that in mind one may conclude that taxpayers frequently fund losing propositions.
For all of you that were around Seattle in the sixties remember when the Kingdome was advertised as the finest. It seems that many of the public edifices built to last in the Northwest experience a short life. Guess once the taxpayers get use to paying the bills, why disappoint, keep the bills coming.
Perhaps a polo field may be built in the near future.
Posted by: Snuffy on April 15, 2006 09:44 AM"What Arabs, including those masquerading as their newspaper editors, have yet to learn is that a free press, a truly free press, is a moral imperative in society. Subvert it, and you subvert the public's sacrosanct right to know and a newspaper's traditional role to expose. If the Western democracies work better than many others, it is because to them the concept of accountability, expected from the head of state on down, is a crucial function of their national ideology.
What Arabs have yet to learn, in addition to that, is that newspapers are not published to advance the political preferences of proprietors, or the commentary of subservient analysts who turn a blind eye to the abuse of power by political leaders running their failed states."
http://www.washingtonpost.com/wp-dyn/content/article/2006/04/14/AR2006041401116.html
Substitute liberals for Arabs and re-read the quote. The libs should heed his advice. I can't think of a better example of where are his words are true than the local newspapers' failure to investigate KCE.
Posted by: Obi-Wan on April 15, 2006 10:48 AM(1) The speedway would attract tens of thousands of fans to this state, and those fans would spend millions of dollars -- including millions in taxes.
(2) The $166 million in bond debt which would be incurred by the state's newly created Public Speedway Authority would be repaid, plus interest of course, using the additional tax revenue generated by the spending of those tens of thousands of fans. A little of the additional tax revenue would be used to offset the state's costs resulting from the presence of the speedway, and a little (about $43 million over 25 years) would be available to the state for other purposes.
(3) Only if the projected numbers of out-of-state fans, their spending totals, and the total tax revenues generated by their spending turn out to be overly optimistic would the state general fund take a hit. If the additional revenues turn out to be lower than needed to repay the debt and have anything left over for the state, then the bond debt would still have to be paid -- so it would in that situation be paid in part by taxes paid by people other than the out-of-state fans and people who earn wages or make profits by selling goods and services to those fans. (If the tax collected by the PSA and credited against the state sales tax turns out to be less than needed to pay principal and interest, then the bond holders would not get paid all they had expected -- unless, of course, the PSA buys bond insurance to cover that situation.)
(4) The proposal from the International Speedway Corporation is essentially a request for tax exemptions and public funding, so that their prospects of a good return on their own $166 million investment in the construction of the speedway are better. The speedway's public areas would be owned by the PSA, thus not subject to any property tax. The ISC subsidiary, Great Western Sports, Inc., that would have a long-term lease on the speedway would be exempt from paying the leasehold excise tax that otherwise would take the place of the property tax. Of course, using the taxes generated by their out-of-state fans' spending to pay almost half the cost would lower ISC's necessary investment, and thus lower their costs of doing business -- meaning their bottom line is better off. The admissions ticket tax the county can now impose would instead be imposed by the PSA and mostly used to pay off another $13 million in construction bond debt -- again using the fans' spending to pay part, so ISC doesn't have to pay it all. Instead of needing to charge enough for tickets to pay the leasehold excise tax or property tax and to pay the cost of construction, ISC proposes to be exempt from the property and leasehold excise tax (except for the private corporate offices in the facility) and to use the fans' taxes (rather than a higher ticket price or other income available to ISC) to pay a little more than half the total cost.
(5) Absent some degree of tax exemption and public financing, no speedway would be built in Washington, so no additional economic activity or tax revenue could be generated by a speedway.
The questions, then, are:
(a) How much risk would the taxpayers be taking by relying on the projected numbers of out-of-state fans and their spending?
(b) How much of a tax break and how much public financing are really necessary to cause the speedway to be built? (Giving more than is needed simply enriches ISC and reduces the net gain to the state.)
(c) Is it worth it to give that favorable treatment to ISC compared to the net gain in tax revenue the state would get on its own bottom line?
Some supporters argue that the state gets nothing now from such a speedway, so it wouldn't be losing anything by giving all the tax breaks and public financing ISC wants in order to get the little net gain that would occur under the projected numbers.
But, that view seems to ignore the nature of the proposed arrangement. Under the proposal, the profits of ISC would be higher, and the prices paid by their fans would be lower, since the tax breaks and use of taxes to fund part of the construction cost reduces the cost of ISC's doing business. Of course, there would be nothing additional coming to the state without the speedway, but the question is whether the state must give up any part (and, if so, how much) of the potential revenue in order to get the speedway built.
"Running on fumes." Now there's an original metaphor. A first sentence like that makes you stop reading right right there and go on to more important things in the Times, like the Les Schwab tire ads. Gee whiz.
Posted by: stu on April 15, 2006 11:42 AMThe people who invest in those teams or sports are not neophytes. They are wealthy people who want to earn more return on their invested funds. If it is a good deal, then they should have no trouble obtaining bank financing. If the banks won't loan them money, then the taxpayers should not either. Aren't we still paying for the Kingdome, plus the other stadiums that have been built in Seattle?
We don't need any more traffic in the crowded Puget Sound area where the roads are so inadequate. It would be far better to build it in a less populated part of the state where there is more space & more access. What's wrong with putting it south of Olympia, for instance? If the demand is there for hotel rooms, the attendees will drive to get there. Besides, didn't someone say that lots of them come in RVs? Doesn't sound like they need so many hotel rooms, does it?
There are too many unknowns, too many hands out for public funding, and not enough oversight from the public. Let them go someplace else, if they can't fund it privately.
Posted by: Clean House on April 15, 2006 01:12 PMhttp://www.seattleweekly.com/news/0415/040414_news_blethen.php
Posted by: Janet on April 15, 2006 07:33 PMAs proposed, the track would be built on public land. From an article at the site linked by Micajah:
"Tom Donnelly of Kitsap Citizens for Responsible Planning said he sees an array of land-use issues on the horizon, including the track’s impact on South Kitsap Industrial Area, where it is proposed. That industrial area was approved by the Kitsap County commissioners with the idea of promoting light industry to support 9,000 family-wage jobs. The track will do nothing to support that goal, he said."
Then there is this nugget, from the Q&A's:
"2. Next are ISC's obligations. The company would sign a 75-year lease or longer. It would be required to host two major motorsports events per year, make a good-faith best effort to get a Nextel Cup race or something comparable (since 12 years from now, something else might outflank Nextel Cup) and would not petition NASCAR to move a cup event elsewhere."
Perhaps this why ISC isn't looking at other sites? Elsewhere, the project costs would be increased, if they had to buy the land.
As an aside, assuming that Donnelly (of Kitsap Citizens for Responsible Planning) is describing the situation accurately, doesn't putting the track on land originally set aside for another purpose constitute bait-and-switch?
Posted by: ewaggin on April 15, 2006 07:33 PMThe land that the speedway facility would be on would be purchased by the Public Speedway Authority from ISC. ISC has an option to buy that 950 acres from the Orton family. Some part of it wouldn't be needed for the speedway, so the PSA wouldn't buy it all from ISC.
What is left of the 950 acres would be developed in some other way by ISC or whoever buys it from that corporation.
The land is located partly within the South Kitsap Industrial Area and partly within an area that is zoned for "business center" development. I think part is even in a "rural residential" zone.
If the SKIA and business center zoned acreage is used for the speedway, then it obviously couldn't be used as hoped for in the county's land-use plan.
But, you have to consider that the old adage about a bird in the hand may fit. No one else seems to be standing in line waiting to develop that land for industrial or business center use, so tossing away the "bird" that is the speedway in hopes of later getting the "two birds" that are still "in the bush" may be a waste of an opportunity.
I think it comes down to figuring out how much the state wants the added economic activity and tax revenue that would be generated by the speedway's operations -- and then striking a deal that allows a lot more of that additional tax revenue to be used for things other than paying to construct the speedway.
If we cannot get more than the piddling $43 million over 25 years that the ISC proposal projects to be available for the state to use for other things, I hope we have legislators who would walk away from the offer. I would walk away in a New York minute, if that's the best ISC will do.
ISC naturally wants to get as much of its revenue to its bottom line as it can. The initial proposal would move quite a bit to the bottom line by exempting them from virtually all taxes, requiring that they pay little in rent, and using the taxes paid by their fans and people who provide goods and services to those fans to pay for construction (rather than using more of their own ticket sales revenue, TV revenue, sponsorships revenue, etc., to pay that construction cost).
They call this a public-private partnership, but it appears that the "public" partner, i.e., the state, wouldn't share in the profits anywhere near as much as the "private" partner.
The state wouldn't see much of a return on its investment in the first 25 years, if it accepted the initial proposal. (When I say "investment," I'm referring to the additional tax revenue generated by the speedway's operations that would be used to pay for construction of the speedway. The supporters point out that the additional revenue wouldn't exist without the track so couldn't possibly go to the state if the deal is turned down; but it's also true that the additional revenue won't go to the state if the ISC proposal is accepted. If the best we can do is to get next-to-nothing as a return for the state, then I'd take the nothing we now have and tell ISC "no, thanks.")
ISC hasn't revealed how much their projected profit would be, but I would bet they don't expect to be earning a passbook savings account level of return on their investment in that first 25 years. (I doubt ISC would say what they expect to earn. I don't think they even divulge actual ticket sales and paid attendance figures for events at their tracks, so I expect them to keep their cards hidden.)
Posted by: Micajah on April 15, 2006 08:18 PMI've been to NASCAR events in 7 states as part of a business I was involved in, and I could bore you to death for days with tales of having to travel over 100 miles to find an available hotel room, fleets of RV's and campers on the event grounds that feature license plates and drivers from all over the country, and the amazing amount of money that these fans are willing to spend on hotel rooms, rental cars, trinkets, meals, etc.
NASCAR events are like having a Superbowl in your town. It really is. You just have to watch it to believe it. There is not substitute.
Compare the money that the state might spend on this track to the "Say WA" ad campaigns, numerous visitors bureaus and other wasteful government expenditures and this use of money would win hands down.
This isn't a case of the Sonics wanting to build another stadium for the same 2000 millionaires and corporate account holders they bring to the game anyway so they can charge them another $1,000 a year for tickets. This is money from out of state coming to fill the cash registers of hotels, restaurants, campgrounds, stores and other local businesses.
Posted by: johnny on April 15, 2006 09:56 PMI'm good with the out-of-state fan money. That's great. But that still doesn't justify the state paying for the track. And, you have to remember, the track would support only one NASCAR event per year. So all that money only comes once a year, not really a fair comparison to a basketball arena. Although I agree with you, building a new basketball stadium to cater to the same few fans is also a bad idea. A NASCAR track would probably be able to rent itself out for private track time for most of the year. If the numbers pencil out, the track should be able to turn a profit. If not, it's a bad business proposition for the state to waste a lot of money for a track that might generate tourism dollars for a few days a year.
I'm a car racing fan, F1, and I now that the events are like no other and have to be seen to be believed, but none of this justifies blowing more tax dollars.
Posted by: Jeff B. on April 15, 2006 10:18 PMIf you read the financing proposal, which is available at www.wewantracing.com, you will see that ISC/GWS is proposing that ISC pay half the total cost, approximately $176 million, all of the cost overruns, and contribute $13 million for infrastructure — sorely needed infrastructure that will be used by the citizens of Kitsap and Mason counties every single day of the year — whether it is a race weekend or not.
ISC is asking the state to issue tax increment financing bonds for the balance of the cost, similar to what the legislature authorized for the infrastructure needed to facilitate building the hospital in Gig Harbor. These bonds will be bought by investors, not the taxpayers, and will be paid off by the sales tax generated by the facility. It is those investors who will take the risks all of the opponents keep saying the taxpayers will, if the project fails. The taxpayers have NO risk in this proposed project, and pay nothing — unless they attend a race.
The "Big Lie" is at work here — if you tell a public lie often enough, to enough people, it becomes perceived as reality. The local Democratic Party, in conjunction with the local media, and the opposition group, C.H.E.C.K., have mastered this concept. They have continually and repeatedly hammered this lie home to anyone that will listen. You can't read a news story or Letter to the Editor that doesn't mention "Public Funding" of the track — even though they know full well there isn't any called for in the proposal.
What's even worse, is all the editorializing about how the tax money collected could be better spent on more liberal causes. What these pinheads fail to mention, is that without the track — there is NO money. All they are doing is intentionally confusing the issue.
The only local publication that has called for media accountability on this issue is the Kitsap Peninsula Business Journal (www.kpbj.com). Also, see West Sound Politics (http://westsoundpolitics.blogspot.com/) for some other examples of the local media's orchestrated campaign to continue perpetratrating the "Big Lie."
Posted by: Lary Coppola on April 24, 2006 09:24 AM