The mayor's office will tell you that they're simply encouraging Allen to sink some of his fortune into Seattle to generate long-term wealth citywide. Sounds like admirable policy. In reality, though, the decision to direct city proceeds netted from Allen back to Allen undermines that strategy and sheds light on the misguided principles that are really shaping policy in South Lake Union.
The proposed property sale rebate says it all. The legislation would allow the city to spend its Allen proceeds from the 2001 sale on trolley construction--or more accurately, on Allen. Sending proceeds from the sale back Allen's way sinks the value that Allen's purchase originally provided the city at large. Originally, the city council only supported the 2001 land deal after mandating that $13.7 million of the proceeds go to a set of prioritized, long-overdue transportation fixes, including $4.7 million for the Fairview Avenue-Valley Street corridor realignment and some portion of the remaining $9 million to fix the Mercer Street mess. Needless to say, no trolley had been on that list. City council staff already reported that the trolley serves no real need--20 bus routes currently serve South Lake Union. But now the city is agreeing to siphon off previously earmarked transportation dough for Allen's glamour project. Keep in mind, there's a list of $500 million in deferred transportation maintenance needs citywide.
However, rather than making Allen's investments benefit the whole city, appeasing Allen seems to be the priority. In addition to the trolley payoff, Mayor Greg Nickels is thinking about funding South Lake Union development with a scheme that (similar to the trolley legislation) sends money right back Allen's way. Nickels wants future tax revenues that are generated from a revamped South Lake Union to pay off the new development rather than going into the general fund. That's a drag, given that the Nickels administration's stated purpose for encouraging Allen to invest in Seattle is to increase city coffers.
Sadly, if South Lake Union's profits are funneled back into South Lake Union, others lose. It's a cruel economic spiral: Neighborhoods that aren't prioritized with perks and rebates in the first place--areas in the South End, for example--miss out the second time around when the dividends from those perks don't enrich the general fund.
I've never been a fan of trickle-down economics, but the city's insistence on paying Allen's way with trickle-up economics is galling.
