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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

July 12, 2012 at 9:30 AM

The arena and the port

Amid the legitimate scrutiny, honest differences of opinion, deliberate misinformation, hidden agendas and outright hysteria over the proposed Seattle arena, one thing puzzles me the most: Why would the Port of Seattle choose to take an aggressive stance that will make it come away as the “arena killer” if successful? Why risk alienating a huge base of arena supporters who are also needed to back the port?

I’m not convinced traffic is going to be that big a deal. Seattle already needs to make infrastructure improvements, arena or no, to help access to the port, especially a Lander overpass. And where was the port outcry when the high-rises were being approved for the area around King Street Station? They will produce — cue gasps — traffic. If one chooses to drive.

I can only guess. Hedge-fund boss Chris Hansen made a tactical error in not approaching port commissioners and officials before rolling out the plan. But the arena is really a proxy for deeper anxieties trending to panic for the seaport. With the loss of the Grand Alliance and Hamburg Sud shipping lines to the Port of Tacoma, Seattle will see a decline of about 20 percent in its container business.

Other contracts will be coming up, especially Hanjin’s, whose lease runs out in 2015. These are long leases, some going into the 2030s, so the stakes are high. Seattle can’t underbid Tacoma — that much was shown with the Grand Alliance loss (would the arena opponents support more public money to allow Seattle greater room in its negotiations? Of course not). Tacoma has excess capacity and Pierce County supports its seaport whatever the ultimate bottom line. None of this has happened because of the arena, but one can imagine the climate of concern at the port.

Another worry may pivot from the entertainment district that might grow around the arena. Will landlords throughout the Sodo district start to kick up rents and decline to renew leases for industrial, logistics and other port-related businesses? That’s a huge unknown, although a steady gentrification and loss of industrial property is a legitimate concern.

I continue to believe this is the best deal any city could hope for and Seattle will be foolish to kill it, or cause it to be built on a suburban site (talk about traffic). The goal should be to push the gentrification north toward Pioneer Square while enacting policies and incentives to preserve industrial uses in Sodo, as well as improving truck access to the port. The arena alone won’t create many well-paid jobs. The port does. But it’s not either/or; a successful city can walk and chew gum at the same time. An arena and NBA team are valuable civic assets in themselves (or 30 NBA cities are fools and somehow we’re smarter).

The deeper port issues need to be addressed, constructively and with a bias for action. The Century Agenda is fine, but where are the specifics? Even with Tacoma’s coups, the Puget Sound is losing market share. The wider Panama Canal and Prince Rupert are major competitive risks, as is the big investment being made at LA/Long Beach. Oakland is undertaking a $1 billion expansion (and still faces challenges). These are bigger issues than the Sonics or the arena, and they will remain and intensify even if the arena killers succeed.

And Don’t Miss: Will Amazon.com’s same-day delivery destroy local retail? || Slate

Today’s Econ Haiku:

Hail job creators

They’re a growing middle class

Not Wall Street playerz

Comments | More in Port of Seattle drivers shutdown, Sonics, Sports business

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