The Kent Events Center could wind up costing nearly $6 million more than originally planned.
City staff this week asked the Kent City Council for an extra $5.9 million to fund additional costs and features at the Kent Events Center.
The City Operations Committee voted 2-1 Tuesday to recommend the Council approve the extra funds for the arena. The Council will consider the proposal at its next regular meeting, July 15. The Operations Committee consists of Council members Debbie Raplee, Les Thomas and Tim Clark. Clark voted against the proposal because of its potential impact on the city’s general fund.
Most of the project funds to build the arena will come from the city issuing bonds that would be paid back over the next 30 years from fees collected from events and activities at the facility.
An estimated $400,000 in additional revenue will be brought in each year due to the new features. Those features include better lighting, a scoreboard, and padded seats in the general-admission area. Every $100,000 translates into $1 million in bonding capacity, which creates the additional $4 million in revenue that the city could use toward the project, said Ben Wolters, city economic development director.
The remaining $1.9 million of the extra costs will be funded through the capital improvements budget at a cost of about $180,000 per year.
“With the additional revenue, we’re confident the city can afford this,” Wolters said.
The Council approved construction of the events center last July at an estimated cost of $78.6 million. The additional costs would raise the project to $84.5 million.
“Considering the size and cost of the project, I’m surprised it’s within 10 percent of the estimated cost,” Thomas said at the committee meeting. “There are so many unknowns. To come this close is amazing. But I’d be hesitant if you come back again (for more funds).”
The 6,025-seat arena is under construction at West James Street and Fifth Avenue North. The project is on schedule to open on Jan. 2, 2009, said Ben Wolters.
Costs of the project jumped $2 million from what that the city already had committed to when it approved the arena last July, Wolters said. That includes an increase of $898,000 in sales tax, city permit fees and insurance; another $592,000 for equipment already ordered; and another $510,000 in professional services for testing the soil and steel, and extra fees for architecture and engineering.
“Prices of materials went up,” Wolters said.
The cost of the bricks for the center jumped $350,000 over the original bid, mainly because subcontractors had to hire out-of-state bricklayers because of a shortage of workers with so many projects under construction in the state.
City staff also has recommended $3.9 million in additions and improvements at the arena to help bring in more revenue. That includes $1.2 million for a scoreboard in the center of the events center that staff anticipates will be self-financed through businesses buying advertising spots on the board.
Another $500,000 would be spent on better lighting for the plaza in front of the arena to improve the appearance of the building. The budget also includes $91,000 for padded seats in general admission area so patrons would be more comfortable than using the non-padded plastic seats in the original design.
“With $4 million to be paid back by revenue, it makes sense in the long run to do this,” Raplee said at the committee meeting.
Clark said he opposed the additional funds because of concerns about what happens if revenue projections are not met. That could lead to a potential of bond debt that could impact the general revenue fund.
But with 13 of the 20 private suites at the events center already sold by the Thunderbirds and other groups interested in leasing the remaining suites, Wolters said the revenue projections look promising.
In addition to city bonds, the state will pay about $21 million toward the arena through a Public Facilities District that allows Kent to keep 0.033 percent of the state’s share of the sales tax, or 3.3 cents on every $100 purchase, collected in the city.
Besides 40 Thunderbirds games per year, concerts, trade shows and other events also will be lined up for the 154,400-square foot facility, expected to generate $34 million per year to the Kent economy.
So far, SMG, which contracts with the city to operate and manage the facility, has booked dates in 2009 at the events center for Disney on Ice, the Harlem Globetrotters and the Barnum and Bailey Circus. The Kent School District also plans to book June 13, 2009 for graduation ceremonies for its four high schools, Wolters said.
The city continues to try to sell naming rights to the arena, but no deals have been reached.
The Seattle Thunderbirds minor league hockey team will be the anchor tenant of the facility. They plan to move next January to Kent from their current home at KeyArena in Seattle. The city of Kent has a 30-year lease with the Thunderbirds.
Contact Steve Hunter at 253-872-6600, ext. 5052 or shunter@reporternewspapers.com.
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