Story Published:
Jun 12, 2006 at 6:13 AM PDT
Story Updated:
Aug 31, 2006 at 8:27 AM PDT
SEATTLE - Because of King County's thriving restaurant
business, the bonds that helped pay for the home of the Seattle
Mariners baseball franchise could be paid off four years earlier
than expected.
When Safeco Field was built in 1999 at a cost of $517.6 million,
bonds worth $325 million were earmarked for the project - paid with
a combination of taxes to be collected through 2016.
But King County finance director Bob Cowan told The Seattle
Times that he's certain now that the Safeco Field bonds will be
paid off by 2013 and maybe by 2012.
"If people are dining out more these days, we get that half a
percent tacked onto the food and beverage tax," Cowan said.
"Restaurants are booming in King County, and that's helping."
The money to pay off the bonds comes from three sources: a half
a percent tax on food and beverage sales, a 2 percent car-rental
tax, and a 0.017 percent sales tax.
The largest is from the restaurant tax that generated $13.5
million in 1999 and brought in $17.7 million last year. The sales
tax brings in about $7.5 million and the car-rental tax about $5
million a year, Cowan said.
"All tax sources are in excess of what we forecast," said
Kevin Callan, executive director of the Washington State Major
League Baseball Stadium Public Facilities District, which built and
arranged the financing for Safeco Field.
Anthony Anton, head of the Washington Restaurant Association,
said the restaurant sales are driven in large part by the
population growth in King County, particularly in the rural areas.
Another reason for the increase in the restaurant tax is the
higher price of food, which was necessary to keep pace with the
minimum wage. He said the minimum wage, one-third of a restaurant's
budget, went from $4.90 an hour in 1994 to the current $7.63.
During the recent recession, people would go out to eat but
order chicken instead of steak and bypass appetizers and dessert,
Anton said.
"For the first half of 2006, people are dining out and willing
to pay more for what they're eating," Anton said.
Since 1998, the average menu price has increased 40 percent,
Anton added.
Cowan said that when the bonds were first discussed, the county
decided to be conservative in its estimate of revenue growth
because if the growth didn't match the estimates, King County would
have to make up the difference.
There are two eligible uses for the excess money: retire the
bonds early or spend the money on other capital projects. The
county opted to use the money to retire the debt early.
Retiring a debt early is unusual, Cowan said, but few projects
are built through a dedicated revenue source, such as Safeco Field.
Cowan said the bonds that paid for the construction of Qwest
Field, home of the NFL Seattle Seahawks, aren't likely to be paid
off early, nor are the Safeco Field parking-garage bonds, paid by
an admissions tax - the only revenue source tied to baseball-game
attendance. Of the $325 million in Safeco Field bonds, $25 million
went to the parking garage.
When the bonds are retired, the restaurant and car-rental taxes
will end. But the 0.017 percent sales tax will revert to the state
through the life of the bonds.
But some advocates of an expanded KeyArena, home of the NBA
Seattle SuperSonics and WNBA Seattle Storm, are looking at the
income from the bonds as a possible source of revenue.