Council approves regional control for state Convention Center

July 19, 2010

Summary

Operation, taxing authority of regional economic powerhouse transferred to new Public Facilities District

Story

The operation of the Washington State Convention Center will become a regional responsibility with today’s unanimous adoption by the Metropolitan King County Council of legislation creating a new public facilities district for the center.

“This new structure for the Convention Center means the revenue generated by it goes right back into investments in the center, keeping it competitive,” said Councilmember Jan Drago, prime sponsor of the ordinance. “Solid management has created profits for a number of years, and I think today we’ve positioned it very well to be at the forefront of our region’s economic recovery.”

The adopted ordinance takes advantage of recent state legislation that allows for the ownership, operation, and financing of the Convention Center to be transferred to a public facilities district (PFD) formed by the county. Once the transfer is complete, decisions about possibly expanding the center in the future can be made without seeking approval from the state legislature.

“The Washington State Convention Center has been a bright spot in our economy, operating at a profit even during these bleak economic times,” said Councilmember Larry Phillips, whose district includes the Convention Center. “By forming a Public Facilities District, the Convention Center board can use those profits to expand, bringing more conventions and economic activity to our region.”

“Creating an independent public-facilities district to govern the Convention Center is a win-win decision,” said Council Chair Bob Ferguson. “This plan does not call for any new taxes and allows the Convention Center to have more control over its funding sources and spending decisions.”

“There’s an opportunity here for some real economic development,” said Council Vice Chair Jane Hague. “Today’s legislation allows the Convention Center to be more competitive and financially vibrant - something that should only help King County’s economic recovery.”

The Washington State Convention Center was created by the state legislature in 1982, with construction first completed in 1988. A major expansion of the center was completed in 2001. To meet immediate customer demand, the center will open an additional 71,000 square feet at the Conference Center on July 20.

The legislation transfers authority to collect the existing hotel and motel excise taxes from the state and the city to the new public facilities district, but no new taxes will be imposed, and existing tax rates will not be increased. Nearly all of the approximately $49 in annual hotel and motel excise tax revenue is dedicated to paying off the debt from those construction projects. The convention center also generated approximately $25 million annually from tenants, events, operations, and a marketing tax in the last four years, with operating profits each year ranging from $1.8 million to just under $4.7 million.

The convention center is a significant driver of the regional economy with a reported 290,000 out-of-state visitors and 140,000 local and regional visitors welcomed at the center in fiscal 2009, spending nearly $242 million while visiting. According to the Convention Center’s Fiscal 2009 Annual Report, approximately $57 million in King County tax revenue was generated by convention center events and visitors between 1989 and 2009, and an estimated $45 million in tax revenue for King County is expected in the next ten years.

The council’s action also included the appointment of the current nine-member board of directors to the board of the newly-created public facilities district, with future board member appointments to be made by the Governor, King County and the city of Seattle.


The adopted legislation advances the Council’s priority of Local Jobs and Economic Development.