No matter how you spin it, the Performing Arts and Events Center will cost our community a TON of money.
Even if the estimated construction costs and required annual subsidies are correct (which they aren’t), this project will be one of the most expensive in our city’s history. Even if we were to believe that the events center will magically revitalize our troubled downtown, how are we going to pay for it?
So far, supporters of the events center have been able to raise approximately $650,000 of their promised $1 million in donations. Even if they met their promised amount, it would represent less than 4 percent of the total cost of construction. To put this in perspective, their donations, while admirable, won’t be enough to even pay the sales tax on this project. If these supporters, including the mayor and City Council, are so passionate about building an events center, why aren’t they willing to pay for even 10 percent of the project?
Sadly, the shortage of donations is only the beginning of the events center’s financial problems. While the mayor and council are dead set on starting construction in October, they are still a long way from raising the required $32 million.
To their credit, the city has managed to secure $2 million from the state’s budget and another $2 million from the county’s 4 Culture budget. For those of you following along at home, this gives the city approximately $5 million, leaving them less than six months to raise the remaining $27 million.
How, you ask, can the city start construction this fall if they are short $27 million? Unbeknownst to most people, the mayor and City Council are prepared to drain some $10 million from an assortment of reserve funds, which includes canceling at least one major traffic improvement project and reducing services to some of our most impoverished citizens. The city has claimed this to be “extra” money, which begs the question: Why hasn’t the city used this so-called extra money to hire more police officers or improve our traffic congestion?
Even with this $10 million of “extra” money, the city is still short by roughly $17 million. While there are still a couple of pending sources of money, in a recent letter to the state of Washington, the city made it clear that they were prepared to borrow as much money as was necessary to build the Performing Arts and Events Center.
Just for the sake of discussion, let’s say the city gets a few million from their pending sources and has to borrow “only” $15 million. The payments on this loan would be approximately $1 million annually for the next 20 years. This already-staggering loan payment does not include the grossly underestimated $200,000 in annual losses that the city will need to cover just to keep the lights on.
To put these numbers in perspective, the cost of hiring a police officer is roughly $100,000 annually. In other words, the city is prepared to spend the equivalent of 12 police officers annually for the next 20 years in order to build and operate the events center.
Even if we ignore all of these costs, what happens during the next recession when money gets tight or when the events center losses greatly exceed projections? Will the city be willing to temporarily shut down the events center to save money, or will we be faced with even more cuts to police? During the last recession, the city significantly reduced funding to street maintenance while keeping their other pet projects fully funded.
Though I am very doubtful, it is possible that building the events center will be the best thing to ever happen to Federal Way. Maybe it really will be the catalyst to bring more businesses and jobs to the downtown area. But is it worth the cost and the risk?
What if successful business owners like Jeff Stock and Byron Hiller are correct in projecting that the events center losses will be significantly higher than the city is claiming? What if instead of being a miracle cure it becomes another money pit? What if instead of bringing in new business to Federal Way it leads to higher taxes and fewer services — a result that will likely chase out more businesses than it attracts?
Without a crystal ball, we have no way of knowing whose predictions for the future will turn out right. But with so much on the line, shouldn’t voters be given a say in the matter?
One of the most dangerous mindsets in business, investing, poker and especially government is to think that you are too far in to stop. It is never too late to stop, take a deep breath and make sure you are thinking clearly.
After all, throwing good money after bad has never led to success. Committing the equivalent of 12 police officers, and/or miles and miles of potholes for the next 20 years to fund a pet project should not be done lightly, or without voter approval.
We can be certain that both City Hall and the unofficial events center spokesperson Joann Piquette will respond to this column claiming that all of my numbers are wrong and that magically everything will turn out OK. While only time will tell whose numbers are more accurate, perhaps they could include in their response why voters are not being given a say in this major project.
Contact Federal Way resident Matthew Jarvis at jarvismp@outlook.com.
