Summary

King County Executive Dow Constantine today announced a financing package of $100 million to the Washington State Convention Center, which faces a $300 million financing-crunch that threatens to mothball the project, sending hundreds of construction workers home and putting future economic development at risk.

Story

The Washington State Convention Center is a King County public facilities district in the middle of a $1.9 billion expansion project that is one of the region’s largest construction projects, financed by bonds to be repaid from future lodging tax revenues.

The Center needs a final installment of about $300 million to complete construction, but with coronavirus restrictions limiting travel and tourism, investor interest in lodging tax-backed securities has disappeared.

Executive Constantine and King County Council Budget Chair and Executive Finance Committee Chair Jeanne Kohl-Welles are working with King County Councilmembers as well as the County’s finance and legal experts to come up with a financial package at manageable risk to County finances.

One concept under consideration is a $100 million loan to the Convention Center that would come from the County’s available cash in its investment pool, which is currently about $3.4 billion. The loan would likely carry an interest rate of about 1 percent, which matches the current earnings rate for the investment pool. (The investment pool is comprised of State-authorized fixed-income securities with an average duration of one year).

The loan would be paid back from future lodging tax revenues.

Attorneys for King County are currently reviewing the form and structure of the Convention Center loan and other potential financing arrangements.

The Convention Center is expected to be completed in 2022.

King County and other governments around the region benefit from the project in a number of ways, including sales taxes on restaurants and hotels that fund local services. King County levies its own lodging tax that is devoted to affordable workforce housing, services for homeless youth, arts and culture, and tourism promotion

The Convention Center indicated that if a solution to the $300 million funding gap is not found in the coming weeks, it will be begin taking steps to shut down the project in the spring, letting go of 1,000 construction workers.

“I have always advocated for sustainable economic development and family-wage jobs. That's why this has been a priority project for me over the course of a decade,” said Executive Constantine. “Particularly at this moment – with so many people struggling – this is good and compelling public policy. We have an obligation to help our region compete for convention and visitor dollars. King County will be fully repaid from future lodging tax revenues, but the real benefit will come in the form of thousands of good jobs and growth opportunities for local businesses.”

“Perhaps at no other time in our region’s history has it been more critical to fight tooth and nail to save every existing family-wage job,” said Councilmember Jeanne Kohl-Welles, King County Council Budget Chair. “And I believe we have a fiscal duty to do everything it takes to keep this highly significant project for our economic recovery moving forward. This world-class facility will serve as an economic engine and attraction for generations to come driving our economy and creating job opportunities throughout King County.”

NOTE: If media would like live photos/video, construction site access will be provided at the corner of 9th Avenue and Pine St. on 12/3, between 4:00 and 5:30 p.m., by Allen Beell (206-650-2063) of the Clark-Lewis team.
If media would like access on 12/4, please contact Troy Brinkerhoff  (805-212-2063) to arrange.

Quotes

I have always advocated for sustainable economic development and family-wage jobs. That's why this has been a priority project for me over the course of a decade. Particularly at this moment – with so many people struggling – this is good and compelling public policy. We have an obligation to help our region compete for convention and visitor dollars. King County will be fully repaid from future lodging tax revenues, but the real benefit will come in the form of thousands of good jobs and growth opportunities for local businesses.

Perhaps at no other time in our region’s history has it been more critical to fight tooth and nail to save every existing family-wage job. And I believe we have a fiscal duty to do everything it takes to keep this highly significant project for our economic recovery moving forward. This world-class facility will serve as an economic engine and attraction for generations to come driving our economy and creating job opportunities throughout King County. 

The Convention Center Addition project is one of the largest construction projects in our state and we need to do everything we can to protect workers from further economic uncertainty. The project is also a symbol of our regions ability to come out of the pandemic and begin to rebuild. When it’s up and running, the new Convention Center will employ hundreds with access to union wages and benefits, boosting our economy in the coming years. We need to keep this project going now more than ever.

As we have painfully learned over the past 10 months – recovery for the travel, tourism and hospitality industry in King County will take years. A cornerstone to that recovery is the completion of the Washington State Convention Center addition project, slated to open in mid-2022. Since ground breaking on the Summit we have seen excellent future demand for both convention centers and we currently have 32 confirmed conventions scheduled for the Summit from 2022 – 2026. It is critical for our region’s recovery that construction continues. Attendees to these national meetings spend broadly throughout the region – impacting restaurants, retail and cultural organizations in addition to our growing lodging sector. 

We have to do everything we can to keep major construction projects going during this difficult time and we appreciate King County’s efforts. Continuing work on the Addition project is essential for construction workers and the thousand plus families that will be impacted if the project shuts down. 

Last May we said that if we didn’t have a financing plan for the last $300 million by the end of the year, we’d need to start steps to close down the project in the Spring. Now we’re there. This project has the potential to be a crucial community asset for our recovery. Delaying it would be a huge loss for the region. 

For more information, contact:

Alex Fryer, Executive Office, 206-477-7966