Socializing the costs, not the benefits

by Carolee Colter and John V. Fox, Seattle Displacement Coalition – November 15, 2015

Yes, there is socialism in Seattle.  But not the kind where the incomes of those at the bottom are lifted and the costs as well as the benefits of growth are shared. No, here in Seattle, it’s socialism for the rich. We foot the bill with colossally regressive taxes and loss of livability and affordability of our communities, while most of the benefits go to an exclusive few.  It’s what city planners and most of city council call a “public-private partnership.”

From 2005 through 2014, no less than $925 million in city subsidies were poured into South Lake Union (SLU) for big-ticket projects such as those serving Paul Allen who owns over 45 percent of the developable land. Next door in the Denny Triangle, Amazon bought acres of real estate where city council has poured millions as well. They’ve followed that with upzones benefiting these and other corporate interests to the tune of tens of millions of dollars.

Meanwhile, the city accumulated a backlog of bridge repairs estimated at $1.5 billion and basic road repairs at over $1 billion. While the city has increased annual funding in Southeast and North Seattle and other areas without sidewalks, it will take at this rate, according to a city report, over 200 years for all our neighborhoods to get the sidewalks they need.

Council recently approved Seattle’s 2015 budget. From a general fund budget of roughly $1 billion, the Council found another $2-$3 million for the homeless and they covered the $1.5 million cost of raising wages for all city employees to $15 an hour.  Notwithstanding these marginal changes, it was business as usual.

Here are some goodies for developers in the 2015 city budget:

  • $4.5 to $6 million to study expansion of the SLU streetcar– an expansion that if ever built would cost taxpayers over $800 million for what the Seattle Times once described as nothing more than a tool to enhance property values along its route. Meanwhile our overcrowded buses starve for funding.
  • $900,000 to synchronize stoplights through the clogged Mercer Corridor. Don’t expect that to eliminate congestion, however. Three traffic studies since 2004 all said that when the $270 million plus redo of Mercer is completed, area traffic actually will be worse than had they simply left the street alone.
  • $2 million to bail out the Downtown Pacific Place Parking Garage for the fifth year in a row because the thing doesn’t get enough users or revenue. You may recall that’s the garage the city gave developers $100 million to build back in the mid 90’s even though later it was revealed it actually cost $70 million.
  • $500,000 to manage the rerouting of traffic through downtown because so many streets are closed or restricted due to construction.  Developers clearly cause these impacts but it’s taxpayers covering program cost.

Then there’s the Capital Improvement Plan for 2015-2020:

  • $2.8 million for Seattle Housing Authority’s redevelopment of Yesler Terrace – a plan that will result in the loss of several hundred desperately needed public housing units. About half the land at Yesler Terrace is being sold – most to Paul Allen’s Vulcan Inc – given the contract to redevelop the site into expensive condo’s and offices.  In 2012, the Council pledged $20-30 million in city dollars over the next decade for the project.
  • $464 million for a new substation and distribution lines serving growth in South Lake Union, with Amazon and Paul Allen as the beneficiaries. That $464 million will be passed on to the rest of us in the form of higher electrical energy rates. In 2012, then Mayor McGinn told reporters a key reason our electric rates needed to be raised 28 percent over the next six years was due to the cost of adding this infrastructure in SLU. Back in 2002, City Light considered “upfront capacity” and “installation” charges so SLU developers would cover these future costs. Whatever happened to that idea?

Every year, we run a google key word search of the budget and five year CIP.  It’s a great way to see where most of the city’s dollars are going. This year, South Lake Union, Denny Triangle and Downtown are mentioned 187 times. By contrast, Rainier Beach is mentioned only 18 times. Columbia City twice. Lake City 12 times,  Maple Leaf twice.  Othello 3 times.  Eastlake seven times. The UDistrict nine times.  Together 15 of the city’s largest neighborhoods, don’t come close to matching the attention and dollars going to these three downtown core areas.

Over 80 cities in our region require developers to pay impact fees to cover the cost of adding infrastructure demanded by their projects. Had we imposed developer impact fees back in 2005 similar to those imposed around the region for decades, they easily could have raised over $300 million.  (Kudos to Councilmember Rasmussen for inserting some funding in the budget to at least study and potentially develop a system of impact fees in future and kudos to Councilmember Sawant for standing up and saying no to a business-as usual-budget.

Our local electeds have granted private residential developers nearly $200 million in tax breaks since 2004, forcing the rest of us to make up that amount in higher tax bills. So it seems we’re subsidizing developers three times over: once directly at budget time, again with substantial upzones, and then again with outrageous tax breaks.  Yep, City Hall is crawling with socialists.

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