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Hacks & Wonks


Dec 4, 2020

Today, host Crystal Fincher and local journalist Ashley Archibald dive into King County Executive Dow Constantine’s plan for a $100 million bailout of the Convention Center, and why that doesn’t make sense in a Covid-19 economy. Also, Renton is seeking to oust over 200 folks experiencing homelessness in the middle of a winter spike in the pandemic. Crystal and Ashley discuss why this is bad idea.

A full text transcript of the show is available below, or at https://www.officialhacksandwonks.com/post/week-in-review-dow-s-convention-center-bailout-renton-evicting-homeless-people

Articles referenced:

King County to bail out Washington State Convention Center expansion with possible $100 million loan by David Gutman
https://www.seattletimes.com/seattle-news/king-county-to-bail-out-washington-state-convention-center-expansion-with-possible-100-million-loan/
 
The convention business is cratering, and cities are getting stuck with the bill by Mike McGinn and Joe Cortright
https://cityobservatory.org/the-convention-business-is-cratering-and-cities-are-getting-stuck-with-the-bill/
 
General Publicola news coverage by Erica C.Barnett (another friend of the show) at publicola.com.
 
Find the host, Crystal Fincher on Twitter at @finchfrii, Ashley at @AshleyA_RC, and more info at officialhacksandwonks.com.
 

TRANSCRIPT

*This transcript was automatically generated then lightly edited, and may not be an exact replication of the audio.

 

Week In Review with Ashley Archibald: December 4, 2020

 

Crystal Fincher: [00:00:00] Welcome to Hacks and Wonks. I'm your host, Crystal Fincher. On this show, we gather insight into state and local politics and policy through the lens of those doing the work and provide behind-the-scenes perspectives about politics in our state. Today, we're continuing our Friday almost live shows where we review the news of the week with a friend of the show. Welcome back to the program today's guest, local journalist, Ashley Archibald.

 

Ashley Archibald: [00:00:36] Hi, thank you for having me!

 

Crystal Fincher: [00:00:39] Thank you so much for joining us again. I wanted to start out talking about something that Dow Constantine rolled out this week as something he's planning to do, which is a bailout of the Washington state convention center, which has a total project cost of $1.8 billion.

 

And right now is $300 million short and saying they could run out of money within the next couple months if they don't have something happen. And so Dow Constantine has said, Well, you know what? Sign the County up for a $100 million dollars of that $300 million price tag. We want to fill the gap because Dow Constantine believes that the convention center is critical and necessary, and that is the most effective use of those funds at this time. So just starting out with what is happening. I guess starting off previewing, how did you hear about this, Ashley, and what are the nuts and bolts of what this plan is?

 

Ashley Archibald: [00:01:45] I remember hearing about it yesterday on the Twitterverse because I'm sick like that. But the first that I've really read about the details was in the Seattle Times today. And I have to say, I'm a little confused by the overall cost benefit analysis. I clearly haven't spoken to the Executive's office, I don't know what he's looking at, but I'm struggling to understand why we would extend a publicly financed loan, using your money and my money, to save a business that isn't going to be able to open for quite some time, versus the individuals and businesses that exist now that can be served by money like this.

 

Crystal Fincher: [00:02:34] Yeah. And certainly the reaction to this has been swift and strong and a lot of people felt the exact same way that you have. And I have several of those same questions - but wait a minute, why are we bailing out this business in effect and not actual people who may be facing losing their home in a pandemic, losing their jobs, just a lot of people who are experiencing real pain and on the brink. And so the issue with this is, when the convention center decided to embark upon their big new redesign, restructuring, this big project, big price tag, $1.8 billion. And when initially the project was funded by a couple of bonds totaling $1.8 billion. And when those bonds were issued, revenue from the hotel tax, which is what funds those bonds was, had risen by 8% every single year since the prior recession.

 

And so this looked like a really great source of funds that was secure and rising. The convention center was going gangbusters. They were, they had so many people wanting to come for conventions that they were turning people away. And so it looked like at that time that this was a reasonable investment, with the thought being that, Hey, the convention center attracts businesses who bring hundreds of people into the city and County every year, who stay in hotels and eat at restaurants and go visit tourism sites and bring money into our economy. Tourism certainly is a significant chunk of our regional economy here. So that thinking was okay, this looks great. So after the pandemic, hotel revenue fell by 96% from the same period in 2019. A quarter of Seattle's downtown hotels have at least temporarily closed. Bookings on Airbnb have absolutely plummeted so the source of funding has been decimated. Cruise ships, which bring a lot of people in like just the overall tourism economy, obviously with COVID and travel and congregating being dangerous, has just eviscerated this whole thing.

 

And ongoing financing, the financing needed to finish paying for this project. Banks have looked at the project and said, you know what? We actually think that this is a bad idea. We think if we give more money, it's going to be throwing bad money after good money. So why don't we just not? And they're saying, Hey, we ran up against a brick wall. They're saying that we're in a money-losing business and that not only are things looking bad now, but that they're not projected to look better for years, even after we get beyond the immediate COVID threat. So we're now faced with a situation as a County. And Dow Constantine has thought, you know what? It's actually a good idea to use a $100 million of the county's ability to loan them this money, even though they're saying we actually need $300 million. So we're giving them money that comes at significant cost to the city, perhaps. And the mechanism to even fund these bonds is very shaky, and saying, but this isn't even gonna solve the whole problem. You still need $200 million more while you're telling us that banks are saying this is a bad idea. And traditional public private financing is saying, no, this is a sinking business and a sinking line of revenue. Overall tourism may come back, but giving it to this one entity and thinking that is going to stimulate the wider economy is not a realistic thought.

 

Ashley Archibald: [00:06:46] It surely seems to me that there should be strings attached to this if it is actually going to be funded by public money. If we are going to put up a $100 million and the actual bill is $300 million. So they're not some conditions on it? Should it not say, Hey, if you can come up with this other $200 million, then yeah, we're going to chip in. At the minimum, I feel like that's a base level kind of ask.

 

Crystal Fincher: [00:07:17] That is a very base level kind of ask. And that has been a question put to the development team led by Matt Griffin here and to the County, and their response has been, well we're also talking to the city and the state to maybe get that money together from them. So basically all of these public entities, with the taxpayer on the hook and in the middle of a pandemic, to bail out this one organization. And it's dicey.

 

Ashley Archibald: [00:07:51] How would you like to see a $100 million of County money with 1% interest spent, Crystal?

 

Crystal Fincher: [00:07:59] On people who are facing issues that really might cause them to die or significantly degrade their quality of the most basic elements of life. People who can't afford food, people who can't afford shelter, people who can't afford childcare, who are trying to take care of loved ones in the middle of this pandemic. We're coming up on an expiration of the eviction moratorium. And we have a record number of people out of work because of this pandemic. We have a record number of people who are late on rent or not sure how they're going to pay next month's rent. And there are no protections for them.

We're going to see, unless there is some help provided to them, just an enormous amount of human suffering.

 

So if we have the ability to spend $100 million, I would like that to go to actual people, and keep them housed and healthy and fed. That seems like at the most basic function of our government. And as we collectively give our money to say, Hey, we want at the very basic level, to keep people safe and provided for, that keeping roofs over people's heads and feeding them seems like it should be really high on the priority list. And to not even do this in a sense of we're directly benefiting people harmed by the pandemic. If we could give this to workers who would be laid off and displaced by this project to prevent us from having to spend hundreds of millions of other dollars to finish bailing this out and complete it. We could give it to the small hotels and small businesses who are not having the resources of big national chains, but who do a lot to prop up our local economy. To help them as they deal with these closures related to the overall federal poor response to COVID. There are so many ways that we could directly help people and not give this to one organization. We're talking about one organization. We aren't even talking about the greater needs of an entire industry.

 

So, I guess I'll flip that question and ask you, what would you like to see happen with these funds?

 

Ashley Archibald: [00:10:31] I mean, from a completely personal view, I am terrified of the impending homelessness crisis that we are going to see when the eviction moratorium is end. And I know you touched on this, but that is completely capturing my attention. I mean, there are people out there who, for no reason that is any fault of their own, it's not like they're not working, it's not like they're doing any of the vices or who cares, but at the end of the day, these are people who should be housed, who are doing everything that they can, and a once in a hundred years pandemic strikes and they lose everything. And in a month or two, unless something good happens, they are going to be houseless. And if you thought, and that's a universal you, not a you, if you thought that the 2015 emergency declaration of homelessness in Seattle and King County was significant, you're about to see something that is far, far worse.

 

Crystal Fincher: [00:11:41] And you're absolutely right and adding onto this we're having this conversation in the midst of a Congress having discussions about another quote, unquote stimulus package that has most of the elements that actually stimulate the economy stripped out. This is now being presented as a bipartisan bill, but it's going to greatly benefit corporations. The, talking about getting monthly checks and support as Democrats talked about, Nancy Pelosi and democratic leadership at the federal level talked about, since the spring and holding out to, hoping that Biden gets elected and that there can be a robust bailout that we all know is needed to support our economy overall, and the people who comprise it, with another cash payment. But those looking at ongoing with eviction relief, with a lot of those elements that have now been almost entirely removed from that bill. So the help that was signaled was going to be on the way is no longer for most people. And any, relief that they get, perhaps there's going to be one small payment of a $1000 or $1500, but after months of being out of work, and not paying rent for months, that, is frankly insulting. So we know that there's going to be a lot of pain coming and that the reason why there isn't more now was due to the previous federal help given to States and localities that is now going to evaporate.

 

So now that we know we're going to have a lot more people in need of direct assistance, just to keep a roof over their head, we're now talking about giving money to the convention center, which by every metric of the business that is required to support the public money to support them, if we're going to bail them out and their ongoing prospects looks bleak and grim that they're not even going to be able to pay it back. Not even just a question of is this a smart expenditure? It just looks horrible all the way around and I'm just not sure why this is felt to be the priority right now.

 

This is just a reminder that you're listening to Hacks and Wonks on KVRU 105.7. I'm your host, Crystal Fincher and today my co-host is friend of the show, Ashley Archibald, who's a local journalist. And as we're talking about this, educated in this exact area of the economy. Do you want to just talk a little bit about your background, Ashley?

 

Ashley Archibald: [00:14:35] I left journalism originally well not left, I took a pause, to go to grad school at the London School of Economics and Political Science to get a degree in local economic development. So I have a lot of thoughts on how governments use and lose their money.

 

Crystal Fincher: [00:14:54] Yeah, a lot of thoughts and are a subject matter expert. And, it seems like you are in agreement with many of the other experts and people who are paid to support this, that they're saying, Hey, this is not a good idea. This is being built on a really shaky foundation and just really does not look good. And, just from, in public policy today, there are a lot of disagreements, but you kind of have to stop and pause when not only people who come from those stuffy establishment backgrounds and private financing, that entire industry, and just the general public, average person on the street all looks at this and says, what in the world are you thinking? This is a horrible idea. There is no data that backs this up. The only way you can think this is a good idea is if you just think in platitudes that, Oh yeah. The convention center is critical to our tourism industry.

 

However, looking at the details, it is a very small percentage of our local tourism industry. And the plan that is being floated is to tax the rest of the industry and give the proceeds of that to this one organization who is counting on companies nationally and internationally traveling here to house hundreds of, to put up hundreds of people and have conventions and trade fairs. And not only is that not happening during COVID, but every industry globally is going to be feeling the effects of this recession that hopefully isn't a depression by that time. And the prospects for companies turning the spigot back on and spending on conventions and these large-scale meetings are, It's just not realistic for the next several years. And it's really questionable to think, are we even, it doesn't make sense to assume that we're going to go back to what we considered normal. I don't think it does.

 

Ashley Archibald: [00:17:18] I am not a public health expert. I feel like I should just throw that out. I'm not an expert in much, but I have yet to hear a single person say that we are going to go back to normal, potentially ever, but definitely not anytime soon. Like we're not going to see a vaccine that actually gets rolled out to the entire American people until 2021. And I want to, first of all, say, Oh, my gracious, these scientists who have managed to make this happen faster than any time in human history, like we have a vaccine for this faster than we have ever seen one developed before by a factor of four. Like we didn't have, I think the last vaccine that was developed took four years. And so it's exceptional that they're doing this. But that being said, people will still need to mask up. They will still need to avoid big gatherings. And they're going to have to do that for a while. And I think things are going to change, and we're going to see them change, and it's going to feel like a real relief, but I really hope that people understand that we're not going to be able to do big things indoors for a while.

 

And I know nothing about the convention center business, but having worked at a nonprofit who has used the convention center, fairly comfortable saying that it takes a minute to put in a reservation there.

 

Crystal Fincher: [00:18:54] It definitely does. It definitely does. These are big logistical events. It takes months and months of planning to have an event at the convention center. These are big, significant events that require teams to plan and execute and yeah, it is, it's hard to see, one, thinking that this is going to be happening anytime in the short term. But it is extremely presumptive, especially when the bet you're making is with public dollars that, Hey, everything is going to bounce back even after we get done.

 

Ashley Archibald: [00:19:35] But there are businesses right now, right, who need that help? There are local businesses who employ local workers that local people shop at. And I don't know. I mean, I think that that is, if you're looking at it just from a capitalistic, economic point of view, does it not make sense to make sure that people can keep their businesses open and to make sure that people can spend money in those businesses?

 

Crystal Fincher: [00:20:05] Hundred percent. And there seems to be broad agreement about that. That, Hey, if we are going to provide help, it should be, and help especially from city government, County government, it should go to businesses and people who are directly beneficial to that. So, yeah, we talk all the time. We're in a conversation right now because of the dining restrictions, about how many locally owned restaurants have already been forced to close and that hundreds of others are on the brink, and they all employ people - many of our neighbors. So yeah, why are we not talking about direct relief? And to the extent that there were federal CARES funds available and some loans to other circumstances, the need is so much greater and everyone has talked about that even the money set aside before to help was grossly inadequate.

 

So this just doesn't seem like a good idea at all. And based on previous data - there's a good article that we can link in the show notes, that Mike McGinn and Joe Cortright wrote early in this pandemic, basically teeing this up. Saying, Hey convention center business is cratering, and they're going to come to cities and public entities for bailouts and here's why it's a horrible idea. Lo and behold, they predicted things really correctly and they detail why it is such a bad idea and why using the convention center, even as a proxy for, Hey, we have to support the tourism industry, we have to support our local economy. Convention visitors accounted for just 7% of the room nights in Seattle hotels. They're actually, a really minor element in our local tourism economy and our economy overall. So if we are talking about that sector of the economy being important, why don't we talk about the other 93%? What supports that? Instead of doing what, accounts for 7%. That seems like it would make sense at the most basic level.

 

But with that, I'm sure we'll be hearing much more about that in the coming week. There's already quite a backlash against that and so many people are feeling pain and going, why am I paying taxes, while I'm in pain, to support that building? I'm not quite sure. But moving on and talking about people in need, I want to talk about, and you certainly have been following this, the issue with housing people who are unhoused and the Red Lion in Renton. Can you brief us a little bit on what's going on there?

 

Ashley Archibald: [00:23:07] Yeah, so I, will freely disclose that I learned about this from Publicola and Erica C Barnett, who is a fantastic local journalist. And everybody should go and look at her work and that of her colleagues. But, the Red Lion is a hotel in Renton that is being used by the DESC organization to move people who are experiencing homelessness into individual rooms so that they can escape COVID. COVID was this, unfortunately, the reason that this happened, but it was not a bad thing, right? Like people have had real changes in their lives as a result of being inside and being safe. And the Renton city council has chosen to put boundaries on that so that the Red Lion will not be used for a shelter anymore. Their plan is to designate very specific areas of Renton where people can be housed, but according to Publicola, that will only be about half of the residents who were there. So we're talking about putting hundred, like literally a hundred plus people, who are experiencing homelessness out on the street, in the middle of a pandemic, which does not seem to me to be a logical public health outcome.

 

Crystal Fincher: [00:24:47] It is very much not a logical public health outcome. And it specifically has been recommended against, by the CDC. And a lot of the punitive actions actually that we see being taken by governments against homeless people are specifically recommended against for public health reasons by our own Centers for Disease Control. So it is perplexing and the question really needs to be asked - what public good is being served here?

 

Ashley Archibald: [00:25:21] I don't know the answer to that. I am sure that the reasoning that has been extended so far is that people are afraid of increasing crime, or invasions, or something of that nature. And let's be clear. I am not here to apologize for other people's actions. What I am here to say is that at the end of the day, these people need shelter and it is a regional response to homelessness that I've been told that we want. And it is absolutely necessary for the prevention of a spread of this disease to get people inside and safe.

And so I really feel on a personal level that it is a necessity that we house people. And it shouldn't have ever been this question. Obviously people should be housed anyway, but I am willing to see the argument. I have not seen it and I don't know that it exists, that we shouldn't try to prevent people from spreading COVID? Maybe if we can house them, it would be an ultimately cheaper, financially, and certainly a more moral stance to take.

 

Crystal Fincher: [00:26:46] Right. And this is just NIMBYism and people being classist and hating on people who don't have homes. And viewing not having a home as a moral failure in and of itself. And that these people are not deserving of human dignity and help. And it's just a shame.

 

Thank you for listening to Hacks and Wonks on KVRU 105.7 FM this Friday, December 4th. Our chief audio engineer at KVRU is Maurice Jones Jr. The producer of Hacks and Wonks is Lisl Stadler. And our wonderful co-host today was local journalist and friend of the show, Ashley Archibald. You can find Ashley on Twitter @AshleyA_RC. You can find me on Twitter @finchfrii (spelled f-i-n-c-h-f-r-i-i) and now you can follow Hacks and Wonks on iTunes, Spotify, or wherever else you get your podcasts, just type "Hacks and Wonks" into the search bar. Be sure to subscribe to get our Friday almost live show and our midweek show sent directly to your podcast stream.

 

Thanks for tuning in and we'll talk to you next time.