Safeco Field Could Be Paid Off Early

Summary

King County's thriving restaurant business means tax revenue is ahead of schedule, and could mean the park could be paid off four years early.

Story Published: Jun 12, 2006 at 5:13 AM PST

Story Updated: Aug 31, 2006 at 7:27 AM PST

Safeco Field Could Be Paid Off Early
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.