Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.
July 3, 2013 at 9:57 AM
The City Council vote in Glendale, Ariz, last night to keep the Phoenix Coyotes in this suburban venue is no tragedy for Seattle. We were being used as a pawn, with a shaky proto-proposal by a group of little-known “investors.” This was nothing like the great deal promised by Chris Hansen to return the Sonics.
The same can’t be said for Glendale, which went deeply into debt to lure the NHL team from downtown Phoenix in 2003 and has been digging the hole deeper ever since. What passes for economic development in metro Phoenix is the suburbs stealing assets from the city, spec development for back-office operations and house building, also mostly in the suburbs. Plus tourism and retirement. The result is the lowest wages and weakest performance for a metro area this size (larger than metro Seattle). There are no major headquarters. There is the whiff of extremism and bigotry from SB 1070 and Sheriff Joe Arpaio’s thug tactics, guaranteeing that the region has a tough time luring young talent. Even if Glendale changes the name to the Arizona Coyotes, it’s an open question as to whether metropolitan Phoenix has the disposable income to support four big-league teams.
Seattle has no such constraints, being one of the richest major metros with plenty of well-paying jobs. Although the loss of the (first) Sonics was painful, it showed us as the first city willing to say no to the endless demands of team owners for new and better arenas. The Hansen deal showed we can do better, and one can hope under a new NBA commissioner we will reclaim our team. If the NHL never comes, we’ll do fine. Have a happy Independence Day.
And Don’t Miss: No love for Amazon’s ‘fulfillment centers’ from this UK blogger
Today’s Econ Haiku:
PIMCO got wasted
In the bond market shake up
The fallout was Gross
May 7, 2013 at 10:21 AM
James J. Hill was in the wrong game and lived in the wrong era. Hill, the “empire builder” who directed construction of the Great Northern Railway to Seattle as well as the newly renovated King Street Station, joined a cabal involving some of the richest men of the Gilded Age — John D. Rockefeller, E.H. Harriman and J.P. Morgan — to create a giant rail network including the Great Northern, Northern Pacific and Chicago, Burlington & Quincy. They pooled their holdings in a trust called the Northern Securities Co.
The 1901 deal was especially good for Hill and Harriman, the latter controlling the Union Pacific. The UP received favorable treatment from the Hill lines. The competing Burlington Route was taken out as a rival. Hill kept control of railroads to the Puget Sound. These rich men were saved from the cost of “ruinous competition.” Shippers were forced to pay high rates and had no alternatives. (The Milwaukee Road’s extension to Seattle and Tacoma would not arrive until later in that decade).
What none of them counted on was Theodore Roosevelt, the new president. Unlike his predecessors in the 1880s and 1890s, he responded to the popular outcry against the monopoly and sued Northern Securities under the Sherman Antitrust Act. The case went to the Supreme Court and the rich men lost. Northern Securities was broken up, the biggest coup of the Trust Buster. I wonder what TR, who enjoyed sports as much as he loved “fair play,” would make of David Stern and the National Basketball Association?
July 12, 2012 at 9:30 AM
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.
June 18, 2012 at 10:30 AM
The reader should know that I hated the Sonics. Growing up a Phoenix Suns fan, I dreaded the playoffs, when my team would have to get past Seattle in its glory days.
Economics is not a hard science, so don’t expect it to provide clear-cut answers on the arena. Studies have shown that stadiums and arenas usually fail to live up to their claims as economic-development engines. Suburban Glendale, Ariz., saddled itself with Greece-like debt to lure the NHL Coyotes from downtown Phoenix. Like much else in Arizona, the deal was part of a real-estate hustle that went wrong.
On the other hand, Coors Field in Denver was a great success in the redevelopment of Lower Downtown (LoDo). Cincinnati seemed a poster child of stadium-building gone wrong, raising its sales tax in 1996 to build new homes for the Bengals and Reds and then facing massing shortfalls during the Great Recession. Now, however, those stadiums are anchoring an impressive renaissance on the once-ramshackle riverfront.