State Treasurer Approves Convention Center Financing Agreement: Avoids $315 Million in Government Loans
Washington Treasurer Mike Pellicciotti approved a financing plan today that will allow the Washington State Convention Center Public Facilities District to complete its expansion with private funding through the municipal bond market, thereby avoiding the need for $315 million in government loans that was being considered by the State, the City of Seattle, and King County.
“Whenever we can keep Washington moving forward, while also saving taxpayers from having to provide $315 million in emergency funding, we are best serving the economic and financial interests of the people of our state,” said Pellicciotti. “The financing plan I approved today shows that the private market has confidence in the future tourism growth of our state, while also freeing up public money so state and local governments can spend now on Washington’s other critical recovery and investment needs.”
In 2018, the Convention Center issued just over $1 billion dollars of bonds backed by lodging taxes to finance the majority of the expansion project. In 2020, the Convention Center had expected to compete the project by issuing additional debt. However, the pandemic decimated tourism and resulted in a major drop in hotel revenues, creating an uncertain revenue stream, which put the financing on hold and calling into question whether the Convention Center addition would be completed as scheduled. Today’s financing plan is an important step forward in the state’s economic development after COVID and ensures that the state will be prepared to welcome tourism back to Washington.
With the majority of the project already funded, the Convention Center is now authorized to complete the expansion with private funding through the municipal bond market. The amended agreement approved by Pellicciotti today on the behalf of the State of Washington provides a path forward for the Convention Center to finance the $350 million in remaining expansion costs through private investment. According to the District, the completed facility is expected to generate as many as 3,900 direct and indirect jobs and approximately 1,000 new construction jobs during the final phase of the project. Once completed, it will allow for more tourism – and visitors’ related sales tax revenue – to come to our state.
“I want to thank my team at the Treasurer’s Office, who have been focused on all aspects of this issue over the last few months to ensure that the public financial interests of the people of our state came first,” said Pellicciotti. “I hope that by avoiding $315 million in government loans today the City of Seattle, King County and the State will be able to use this freed up funding to better meet the immediate needs of the working families and retirees of Washington as we reboot our economy after COVID.”
Located in downtown Seattle, the Washington State Convention Center’s expansion is scheduled to open mid-2022.