Final Analysis: The Sporting Life in 2017

Three predictions for the coming year on a new arena, an old arena and the Mariners.
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As every first-year business student knows, a city’s economy is not considered “world class” until said city has erected at least four shrines to professional sports and these shrines remain empty and unused most days of the year. Seattle is knocking on the door of world classiness because it already has KeyArena, Safeco Field and CenturyLink Field up and running. Occasionally. Just one more monument to appease the great mass of athletic supporters and we’re there. Hallelujah!
 
It’s only a matter of time because Chris Hansen, the San Francisco rich guy who wants to build a new arena on First Avenue South and bring pro basketball and pro hockey to Seattle, is this close to getting his way. In October, Hansen revealed that he and his investors are now willing to pay the whole honkin’ bill for plopping a new arena into the SoDo neighborhood a block from Safeco Field. He still wants a piece of Occidental Way vacated and also expects some tax breaks from the city, but that’s how rich guys are. (See: Trump, Donald.) Besides, the people who believe we’re not world class until the NBA returns to Seattle are salivating over this deal because it’s the best deal we’re ever going to get
 
Of course, these same people said Hansen’s previous offer, which would have required that $200 million in public money be plowed into a new arena, was also the best deal we were ever going to get. 
 
Hansen’s decision to pay more for his arena places the sports economy clearly in the local spotlight this year. Heaven knows we could use more opportunities to pay $9 for a beer and see millionaire athletes selling Jaguars and BMWs on TV. It’s the kind of economic shot in the arm that only comes around whenever a sports league is in a coercive mood. 
 
And so, in the spirit of this January issue’s “looking ahead” theme, we offer three predictions relating to the regional economy as the Hansen arena intrigue continues to unfold.
 
Prediction 1: Hansen, who has already spent more than $120 million buying up property in the area of his proposed arena, will persuade the Port of Seattle, his arch nemesis in this melodrama, to fold up its tent and send all cargo-handling operations to Tacoma. That decision will pave the way for so many trendy bars and restaurants with names like Kale & Kumquat or Cobblestone & Wingtip that Hansen will be persuaded to create a private streetcar system to connect Pioneer Square with the burgeoning Stadium District. 
 
Prediction 2: The city-owned KeyArena, whose very future is clouded by the Hansen proposal, will announce plans to house up to 10,000 homeless persons every day. Even on days when the Seattle Storm and Seattle University basketball teams need the building, the city believes the Storm and the Redhawks could use the attendance boost, so it becomes a classic win-win.
 
Prediction 3: The Seattle Mariners, who still don’t like the arena proposal, will channel their hostility onto the field of play — and still not win the World Series. (This is called pattern-recognition analysis.) However, always mindful of improving the fan experience — because it’s not whether your team wins or loses, but whether you’re inclined not to press charges for being gouged by a vendor — the Mariners will introduce several new fan-friendly food items, plus mani/pedi stations in the pricey seats and roving loan officers to assist anyone trying to finance the purchase of hot dogs and sodas for a family of four. 
 
JOHN LEVESQUE is the managing editor of Seattle Business magazine. Reach him at john.levesque@tigeroak.com.

Editor's Note: A Reason for Optimism

Editor's Note: A Reason for Optimism

Donald Trump notwithstanding, 2017 in Seattle may be brighter than anticipated.
| FROM THE PRINT EDITION |
 
 
 
It’s easy to be pessimistic about the outlook for 2017. After 90 months of growth, the economic expansion is aging and may not have much life left. Interest rates, which have fallen pretty steadily over the past 35 years, seem headed up again. If they reach anywhere near their 100-year average of 5 percent, that could choke off growth. And global trade, which has been on a growth path for 70 years, benefiting our technology, manufacturing and agriculture exports, could hit a wall if President-elect Donald Trump follows through on threats to slap tariffs on partners, triggering a trade war. 
 
But 2017 could well be far more prosperous than we have any right to expect. While Trump may be bad news on issues of immigration and inequality, it’s hard to argue that his plans to slash taxes on business, encourage local manufacturing and raise infrastructure spending won’t be good for business in this region. Michael Butler, CEO of Cascadia Capital, who has done a booming business representing entrepreneurs who want to sell their companies, says some clients are now putting off plans to sell their firms, believing the economic outlook is now much brighter.
 
Even if Trump’s pro-business policies don’t come to pass, there is a strong argument to be made that the Seattle region will continue to prosper. When it comes to new infrastructure spending, for example, our region has enough projects in the pipeline to keep workers busy for years, including tens of billions of dollars in new Sound Transit spending, the remodeling of Sea-Tac Airport, the convention center addition and the Manhattanization of downtown Seattle.
 
And the number of new jobs posted continues to rise, driven by strong growth among the region’s ever-expanding tech sector. “We don’t fully appreciate the number of jobs, people and households that will be added over this next cycle,” says Peter Orser, director of the UW’s Runstad Center for Real Estate Studies. Despite an unprecedented building boom during the past five years, Orser says the region has failed to keep up with housing demand, adding just a fourth the number of residential units needed to house the new residents moving into the area.
 
Just five years ago, few institutional and international investors paid much attention to Seattle. “Today, we are their darling,” says Orser. The inflow of new money and young talent is “fueling investment in development, the UW, buildings and new ideas at a scale that is exponentially greater than five years ago.”
 
While there will be cyclical corrections as we overbuild, Orser says it would take “a major event” to knock the regional economy off its trajectory of rapid growth. “I don’t see job creation slowing,” he says. “I see a shortage of labor, land, investment dollars and housing. The breadth and depth of the economy is radically different [from five years ago].” 
 
Matt McIlwain, managing director at Madrona Venture Group, agrees, pointing to Seattle’s strength in rapidly growing technology sectors like cloud computing, virtual reality and “intelligent applications” that incorporate the power of big data, the cloud and artificial intelligence.  
 
More needs to be done to retrain local residents for the jobs being created, build affordable housing and improve transportation infrastructure. But if Orser and McIlwain are right, our economy will continue to be strong enough to expand financing for such activities. 
 
LESLIE HELM is executive editor of Seattle Business magazine. Reach him at leslie.helm@tigeroak.com