Understanding The Economics of Seattle’s New Arena Using the Analogy of Pimping

Imagine, for a minute, that I am a pimp boss. I run this town. I oversee all the pimps on these streets and offer them my protection. I also coordinate their hos. Here ho, go to this pimp, he’ll treat you real nice. That’s how I do it.

Now imagine that you are my top pimp. You’re damn good at what you do. You take your hos out to the track on Pacific Highway South and pull in thousands of dollars every single night. I don’t know how you do it, I just know that I get my biggest cut from you, so in turn, I like you. We get along, you and I. I’m a fan of yours. You’re good to me, I’m good to you, it works.

Now let’s pretend that we just got this new chick. She’s fine. Real fine. She probably shouldn’t be doing this, but we don’t tell her that. This girl could be a model if she wanted to be. But for some reason she wants to turn tricks. So whatever, it’s cool. We can help her out. We’ll call her Brandy.

I know Brandy is gonna be our golden goose. She’ll pull in more money all by herself than most of our girls combined. She is that good. Because I like you so much, I want you to take care of her. I want you to be Brandy’s pimp. You’re gonna make more money off this girl than you can possibly imagine. And me? I’ll still just be taking my usual cut at the back end, that 10-percent I’m entitled to. That’s all I ask. You’ve been good to me, man. Consider this a gift.

Now I know what you’re thinking. You’re thinking, This is too good to be true. And you’re right. It is. There is no denying that. You’re getting a nicely-wrapped package from me that will financially benefit you. You’ll be wearing fur coats and driving a Maybach in no time. All I’m asking for is my cut. And you know what I plan to do with that cut? Here’s the good news, I plan to use the extra money we make off Brandy to reinvest in my pimping operation. I’m gonna go out and get more girls, scout more talent, and find you the best hos on the face of the earth. I’m gonna get rich off this. And so will you. This is unprecedented. One girl, Brandy, making all this impact on our organization.

So how does that sound? Sound like a good deal? We in this together? Here’s Brandy, you can have her. Say hi, girl. Say hi to a pimp. Alright. This is chill. I like this. I’m excited for the future. We’re gonna do big things together…

***

For those of you who don’t know how analogies work, here you go:

1. The committee launching this project (consisting of investor Chris Hansen, the City of Seattle, and King County) is the pimp boss.

2. The City of Seattle and King County taxpayers (i.e., you, the tax-paying constituency) are the top pimp.

3. Brandy is the proposed arena that Hansen wants to build in Seattle’s SODO district.

4. The money the pimp makes off Brandy is the revenue generated by the proposed arena. This revenue comes at no cost to the pimp, i.e. the tax-paying constituency. Consider it profit, because as we once upon a time learned in economics class, profit is revenue minus expenses. And since we, the pimp, have no expenses for this transaction, it’s ALL profit. Boom.

5. The money going to the pimp boss on the back end are the taxes generated by the proposed arena.

6. The plan to reinvest in the pimping operation is essentially the plan laid out by the City of Seattle and King County to use the tax money generated by the proposed arena to offset the initial public cost (a public cost picked up by the city and county from existing taxes, not new or additional ones) of funding the arena.

The message? This costs you nothing. NOTHING.

Financially, we, the taxpayers, are completely off the hook. This is a gift. This is a sports fan doing something great for other sports fans. Chris Hansen is paying it forward with this investment. Never forget that. He is donating — donating! — this land and the arena that will sit upon it to the City of Seattle and King County. He’s just giving it away. We will all benefit from this.

The State of Washington is a non-entity; they’re not paying for shit, yet they’ll end up pocketing some tax revenue off this endeavor. The city and county are involved in giving the A-okay, accepting the gift of the land and the arena from Hansen, and being the primary benefactor of all revenue generation from the facility.

And you? You get to sit back and watch this happen, all while knowing no money is coming out of your pocket. You aren’t paying for anything. So stop acting like it. If you think you are, then move away. If you’re paranoid, we don’t want you here. Someone is doing something great for our city: Enjoy it! You will benefit from all of this. Learn to love it.

I hope I’ve provided some education. Please pass this on to all those people who aren’t as smart as you. Thank you.

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