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Restaurant boom may pay Safeco Field bonds early
Seattle Times staff reporter
When Safeco Field was built in 1999, bonds worth $325 million were earmarked for the project — paid with a combination of taxes to be collected through 2016.
But largely because of the booming restaurant industry, the bulk of the bonds could be paid off four years early.
"If people are dining out more these days, we get that half a percent tacked onto the food and beverage tax," said Bob Cowan, King County finance director. "Restaurants are booming in King County, and that's helping."
Cowan said he's certain the Safeco Field bonds will be paid off by 2013, and perhaps by 2012.
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, by far, is from the restaurant tax. In 1999, it generated $13.5 million; last year it brought in $17.7 million. 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 (PFD), which built and arranged the financing for Safeco Field. "We're tickled to death [the money] is coming in so strong. There's been a heck of a comeback in restaurants."
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," he said.
According to Anton, the average menu price has increased 40 percent since 1998.
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 them 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. The Kingdome, in contrast, was financed by a hotel-motel tax that will continue until the bonds are due to be paid off in 2016.
Cowan said the bonds that paid for the construction of Qwest Field also 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 are looking at the income from the bonds as a possible source of revenue.
Lane Hoss, former head of the Washington Restaurant Association, said restaurants were promised the tax would end when the bonds were repaid. "There was a promise to the association: When the tax was done it would be sunsetted," she said.
"We take the strong position that the restaurant industry had done its share. It [the tax] should go."
Seth Howard, owner of the Collins Pub in Pioneer Square, said he doesn't believe the tax will ever come off. "There's no way they'll peel it back," he said. "They'll find some other place for it."
Susan Gilmore: 206-464-2054 or email@example.com
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