How the Mariners’ Request for Public Funding Is Different

Back in May, the Mariners agreed to a lease deal that would keep them in Safeco Field for another 25 years. At the time, I wrote that the Mariners appeared to be bucking a trend by foregoing public money for a new stadium in favor of staying where they were.

Then, last week, things seemed to change.

The Mariners say they will only sign their lease extension deal with Safeco Field if King County approves $180 million in public funding for the ballpark. | via @ByRosenberg https://t.co/OeVc9u3UTE

— Seattle Times Sports (@SeaTimesSports) July 26, 2018

Predictably, this was not well received.

"Fred Rivera, a Mariners executive vice president and the team’s legal counsel, said Wednesday that the lease deal would be signed only if the county approves the public funding for the ballpark."

I mean that's pretty clearly a pay-us-or-else kind of thing

— Nick Stellini (@StelliniTweets) July 26, 2018

If they can't run the business without public funding, perhaps they shouldn't be in business in the first place.

— Acme Rocket (@acmerocket) July 27, 2018

This is despicable. Public funding for parks is a proven farce. Extremely disappointed in the @mariners. https://t.co/0tJVEsqcvQ

— Casey Decker (@caseycdecker) July 26, 2018

I am a season ticket holder and I do not think the Mariners need $180 million in public funding. The President and CEO talks about how great Safeco Field is. Find the money in new naming rights and sign the long-term lease. https://t.co/Xge4yJLmHS

— Aaron Bregel (@ABomb88) July 26, 2018

Generally speaking, public financing for stadiums is a losing proposition for local municipalities. But all that is gold does not glitter, not all who wander are lost, and not all public funding for stadia is created equal. Here, it’s important to note that the Mariners’ demand for public funding isn’t actually new: in fact, it’s part of the proposed lease contract that was originally agreed to back in May. As Tim Cantu, an attorney, correctly noted for Lookout Landing,

The Mariners aren’t making a last-minute demand for new money here; they’re asking that the County pay what the County said it would pay as a condition of the Mariners signing a new lease.

The number wasn’t arbitrary, either; it was based on this comprehensive capital needs study conducted by an independent third party firm, Populous, contracted to look at what maintenance and improvements Safeco Field would need moving forward. (Remember that we talked about that study back in June.) And while some of the issues identified in the study were of dubious merit – a brewpub and beer garden, for instance – others are much more realistic. The capital study identified emergency systems, HVAC and plumbing systems, and other major systems as in need of update or repair; in fact, of the capital needs identified by the study, more than half (52%) were allocated to infrastructure, architecture, and building systems. That’s things like membrane roofs and expansion joints, which the study notes have already exceeded their planned 25-year lifespan; peeling paint in concession stands, posing a hazard to food preparation; missing grout in toilets; loose concrete causing water damage; and even water leakage into food preparation areas. The report also noted that the retractable roof is currently operated using software dated from 1999, support for which is being discontinued. Obviously, these are more than cosmetic defects.

The Mariners remain intent on contributing the majority of funds necessary to pay for the capital improvements, as Mike Rosenberg wrote for the Seattle Times:

A third-party study the Mariners helped commission said the team needs $385 million in capital projects over the next 25 years to keep the stadium in its current condition. That includes work on the retractable roof, elevators, escalators, HVAC and electrical systems. The public funding would cover $180 million of that cost, and the club would contribute $205 million.

Separately, the team is planning over the next quarter-century to pay for $180 million in various upgrades to modernize the stadium, and another $250 million for day-to-day maintenance and upkeep.

And it’s also worth noting that the Mariners’ demand for public funding isn’t exactly a threat along the lines of what the Diamondbacks did with Chase Field. Once again, per Rosenberg:

The team’s lease expires at the end of this year. But that doesn’t mean the Mariners would leave if the public funding is rejected.

If the county rejects the funding plan, the team would sign a short-term extension of up to five years to ensure the team continues to play at Safeco and then go back to the drawing board to figure out a different long-term lease structure, Rivera said.

“We are not moving from Seattle,” Rivera said. “That’s not in our plans.”

We should also keep in mind that, legally speaking at least, there is at least some argument that King County is required to pay a portion of the capital investments. Typically, even commercial leases make structural problems the landlord’s responsibility, meaning King County does owe a legal duty to pay some amount necessary to fix the structural problems in Safeco Field.

So what happened here? According to Josh Kelety of Seattle Weekly, it seems that due to an oversight by someone’s lawyers, the exact terms of the amount King County would pay, despite being discussed and confirmed by email, never made it into the final lease agreement.

But according to emails between representatives from both the PFD and the Mariners obtained by Seattle Weekly through a public-records request, the team was explicit about its position that receiving the $180 million from taxpayers was part of the deal even though it was not specifically spelled out in the language of the lease’s contract. “As confirmed and set forth in prior communications with the PFD’s lease negotiation team, final lease agreement is conditioned on King County’s approval of an allocation of a portion of the county’s lodging tax revenues,” wrote Fred Rivera, Seattle Mariners executive vice president and general counsel, in an early June email to PFD board member Virginia Anderson.

If that’s true, King County is on the hook. A binding contract consists of an offer and acceptance of that offer, plus consideration (something of value) paid in exchange for performance of the contract by the other party. In a lease, your rent is consideration paid in exchange for the landlord giving you a right of possession in real property. Here, King County evidently made an offer, and the Mariners accepted it with an agreement to pay rent (consideration). That’s a contract! So it’s not really the Mariners’ fault here. They’re still bucking a trend – they’re not demanding public money to build a new stadium, they just want their landlord to do what commercial landlords are generally supposed to do in long-term leases.

Yet the idea of spending taxpayer money to maintain a building for a tenant with a current valuation at nearly $1.5 billion and $288 million in annual revenue understandably doesn’t sit well with Seattle residents. Many argue that the money, which would come from motel-hotel taxes, would be better spent on the construction and upkeep of badly needed public housing. But given this particular fact scenario, the question isn’t whether the Mariners are a villain for demanding their landlord pay for certain things in a property they have no plans on leaving. Instead, the question is, if you’re opposed to public financing for stadia under even these circumstances, whether governments should be in the sports venue landlord business at all.