HomeMy WebLinkAbout090525 - Financial Projections for the Downtown Stadium Project_ALERT: BE CAUTIOUS This email originated outside the organization. Do not open attachments or click on links if you are not expecting them.
Dear Commissioners,
Yesterday, the Office of Financial Management projected tariffs could cost Washington $2.2 billion over the next four years. The nonpartisan report also projects rising prices and about
31,900 fewer jobs by 2029 in Washington.***
The projections were made using the Washington State tariff adjusted 2012 Input Output model.
What does this have to do with financial projections for the New Downtown Stadium project?
The projections for the new stadium were based on a non-tariff adjusted regional 2012 Input Output model.
This means the business revenue, jobs, and labor income projections are overly optimistic and do not include the economic impacts of tariffs.
The financial projections for the stadium are wrong and may have led to a gross overstatement of revenue for the City of Everett stadium project.
The downtown stadium may be unaffordable. It is likely that there will be additional taxes and additional bonds not included in the current Everett City planning presentations.
Citizens, the Everett City Council, and the Snohomish County Council should vote NO on a New Downtown Stadium.
The Office of Financial Management does not have an I-O model that incorporates elasticities (tariffs) for sub-state regional impact analysis and, while regional analysis would be helpful,
it is out of scope for OFM's current work.
Since no viable regional I-O model exists, using plain numbers from the "design build" application might be a better approach.
The "design build" application shows that Refurbishing Funko Field would cost $71.3 million less than building a New Downtown Stadium - a potential $71.3 million savings for taxpayers.
Why build a New Downtown Stadium??
Why not use the one we already have - Funko Field - and embrace a potential $71.3 million savings for taxpayers?
Best Regards,
John E. Martin
425-361-2854
jmartinnoj@hotmail.com
No Frogs Downtown
BCC Citizens and various media
https://www.snoho.com/news/2025/sep/03/force-transparency-on-projected-everett-stadium-earnings-projections/
Force transparency on projected Everett stadium earnings projections <https://www.snoho.com/news/2025/sep/03/force-transparency-on-projected-everett-stadium-earnings-projections/>
Scott Pattison, special projects manager with the City of Everett, said that “.... naming rights is a large source of Revenue.” An estimated $6.8 million or more over a 30 year period
is the “large source of revenue.” It does not belong to billionaire Major League ...
www.snoho.com
https://mltnews.com/letter-to-the-editor-everett-stadium-naming-rights-is-this-is-a-construction-subsidy-in-disguise/
<https://mltnews.com/letter-to-the-editor-everett-stadium-naming-rights-is-this-is-a-construction-subsidy-in-disguise/>
Letter to the editor: Everett stadium naming rights — is this is a construction subsidy in disguise?Letter to the editor: Everett stadium naming rights — is this is a construction subsidy
in disguise? - MLTnews.com <https://mltnews.com/letter-to-the-editor-everett-stadium-naming-rights-is-this-is-a-construction-subsidy-in-disguise/>
It appears that the Everett City staff may be attempting to use $6.8 million or more in naming rights revenue as a construction subsidy for the “New Downtown Multipurpose Stadium” in
Everett, Washington. (Editor’s note: Read background information on the stadium issue in this Everett Herald ...
mltnews.com
A more through economic evaluation follows (see below).
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No matter who is elected mayor or councilmember, the Community Attributes Inc study commissioned by the City of Everett needs to be redone and reevaluated. The study is not valid or
reliable.
The study was done in 2022 by Community Attributes Inc., commissioned by the City of Everett, and used the 2012 Washington State Input-Output (I-O) Model published by the Washington
State Office of Financial Management (OFM) with customizations to allow for sub-state regional impact analysis.
The Office of Financial Management I-O model itself assumes:
(1). No Supply Constraints: -- no limitations on the availability of inputs, raw materials, or labor, allowing for unlimited production.
(2). Fixed Input Structure: -- the mix of inputs (raw materials, labor, etc.) used by an industry to produce its output stays constant, even if the overall output level changes.
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The Community Attributes Inc. I-O analysis we are concerned with was done in 2022.
On April 2, 2025, a day he called "Liberation Day", Donald Trump declared a national emergency regarding the national trade deficit and announced "reciprocal tariffs" on all countries
not subject to other sanctions.
Now, we have tariffs.
For the analysis of tariffs, the Office of Financial Management (OFM) combines a trade elasticities framework with the I-O model to address some of the assumption limitations described
above.
The OFM I-O model used in 2022 does not give valid or reliable business revenue, jobs, labor income, or revenue forecasts for the City of Everett. It does not incorporate tariffs.
The OFM does not currently have an I-O model that incorporates elasticities for sub-state regional impact analysis.
The City of Everett employment, income, and revenue projections might not be possible using an Office of Financial Management I-O model, the projections might be flat wrong, and the
projections may have led to a gross overstatement of revenue for the City of Everett stadium project.
The downtown stadium may be unaffordable --- implementing additional taxes and additional bonds not included in the current Everett City planning presentations are likely.
----
Further Limitations of the Office of Financial Management Input-Output Impact Analysis:
Time:
The model will better approximate the economy the closer to the year for when the model is
constructed. In other words, the farther away from the model year (2012), the less accurate the
impact estimation would be.
Combined with impacts of tariffs on the State of Washington’s economy, this limitation on accurate forecasting is substantial.
Multipliers - - a "net" impact
The Community Attributes Inc. I-O analysis must be evaluated to determine if a “net” impact analysis is included.
When a project’s funding is not external, such as a local government investment activity funded by tax dollars, the impact needs to be evaluated on both the activity (positive effect)
and the corresponding funding
(bonds and taxes’ negative effect on consumption) to derive a “net” impact.
One such negative effect was brought to the attention of Everett Director of Economic Development Dan Eernissee, Mayor Franklin, and the Everett City Council on April 5, 2025. Specifically,
the use of federally tax-exempt bonds (see April 5, 2025, email) and the lowering of the purchasing power of workers.
-----
When interviewing Everett mayoral candidates, the Everett Herald reported "... independent researchers ... have previously found many Stadium construction projects have little positive
financial impact on cities..." indicating that the stadium construction project may not produce money for the City of Everett.
The Everett and Snohomish County Councils, candidates, the media, and the general public cannot rely on the overwhelmingly flawed pro downtown stadium analysis endorsed by some councilmembers,
the City of Everett Stadium Fiscal Advisory Committee, Mayor Franklin, and the mayor's "team."
The forecasts and recommendations are based on invalid and unreliable worksheets, tables, and models.
This will be true, no matter who is elected mayor or councilmember.
Best Regards,
John E. Martin
425-361-2854
jmartinnoj@hotmail.com
No Frogs Downtown
==================
The City of Everett Stadium Fiscal Advisory Committee uses The Community Attributes, Inc. (CAI) Report to evaluate economic impacts.
Https://www.everettwa.gov/DocumentCenter/View/40286/Final-FAC-Report--12-5-24
the 2012 Washington State Input-Output (I-O) Model is published by the Washington State Office of Financial Management (OFM)
Https://ofm.wa.gov/washington-data-research/economy-and-labor-force/washington-input-output-model/2012-washington-input-output-model
The 2012 Washington Input-Output Model - Office of Financial Management <https://ofm.wa.gov/washington-data-research/economy-and-labor-force/washington-input-output-model/2012-washington-input-output
-model>
Released February 11, 2021 This model was developed by Dr. Fanny B. Roberts, Forecasting and Research Division, Office of Financial Management and Dr. William Beyers, University of Washington
Geography Professor. The authors are grateful to Marc Baldwin and Jim Schmidt, Office of Financial Management, for the encouragement and support throughout the 2012 model study period.
ofm.wa.gov
The Community Attributes, Inc. (CAI) Report evaluates economic impacts.
Https://www.everettwa.gov/DocumentCenter/View/40313/Final-CAI-AquaSox-Economic-Impact-Study-Update-May-2024
Page 14 of the CIA study indicates:
"2012 Input-Output (1O) table to estimate total vendor employment and wages.4"
See also footnotes:
4 Note: "The 2012 IO table is the latest available IO table and was released by OFM in 2021."
Page 14
***
https://ofm.wa.gov/about/news/2025/09/tariffs-could-cost-washington-22-billion-over-next-four-years
Tariffs could cost Washington $2.2 billion over the next four years <https://ofm.wa.gov/about/news/2025/09/tariffs-could-cost-washington-22-billion-over-next-four-years>
Nonpartisan report also projects rising prices and about 31,900 fewer jobs by 2029 in Washington OLYMPIA — Governor Bob Ferguson held a press conference today to detail the Washington
State Office of Financial Management’s stand-alone, nonpartisan analysis of the potential effects of the 2025 federal tariff action s on Washington families, employers, and the state
budget. To our knowledge ...
ofm.wa.gov
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