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Convention Center expansion in jeopardy as pandemic decimates tourism

The $1.8 billion Washington State Convention Center expansion project still has 30 events booked for its opening year in 2022. Those events and all that come with will be vital to the region’s economic recovery, but now it is all at risk unless the federal government steps in with much-needed stimulus money, according to the developer.

“If we don’t have additional funds basically to complete this project, we’ll have to stop in 10 to 12 months,” said Mike Griffin from project developer Pine Street Group.

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The problem is the major blow to the local travel and tourism industry over the past few months during the pandemic, which has decimated expected lodging tax revenues, leaving a $300 million gap in the financing capacity.

Shutting down the project would deliver a devastating hit to the local economy as it tries to emerge from the pandemic.

“The hospitality industry relies on this convention center to bring visitors into town to fill hotel rooms, and restaurants, and generate a lot of funds that people bring from around the world into our economy,” said King County Executive Dow Constantine, adding that the loss would have a ripple effect across the state.

The project was 30 percent complete, with nearly 90 percent of the materials ordered when the COVID-19 public health emergency effectively shuttered the entire tourism sector of the state’s economy.

Hospitality and lodging were hit particularly hard.

The Convention Center had scheduled its final round of financing to complete the additional construction this year and next. With the collapse of the tourism sector – and the subsequent drop in lodging-tax revenue to back the bonds – the financing is in peril, as is the completion of the addition without a harmful delay that would bring a host of additional costs.

The addition project will help meet the strong demand for conventions in Seattle.

“Conventions are already booked for years out that will use the new space,” said Jeff Blosser, president and CEO of the Washington State Convention Center. “We have customers who want to come to Seattle, and we need to take care of them in June of 2022 and beyond. We want to satisfy our customers with completion of the facility on schedule.”

Tom Norwalk, president and CEO of Visit Seattle, worries about the consequences to Seattle’s tourism industry, which is already hurting.

“Tourism in Seattle and King County is an $8 billion industry,” he said. “The attendees of our large national conventions at the WSCC play a large role in that. Their spend contributes to restaurants, retail, and cultural institutions – in addition to our hotel economy. If we are forced to stop construction, we will be effectively delaying recovery, and this will not only impact downtown Seattle but our entire region.”

A delay would also put the roughly 2,000 construction workers on the project out of a job.

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“The WSCC addition project provides important opportunities for underrepresented contractors, workers, and apprentices in our region,” said Monty Anderson, executive secretary of Seattle Building & Construction Trades Council. “I worry about the thousands of family-wage jobs that will be lost if construction ceases on this project.”

General contractor Clark Lewis began work on the addition in July 2018. Over the three-plus year construction period, the project team is expected to hire as many as 6,000 union construction workers and hundreds of apprentices. The project will pay more than $100 million to the region in construction sales tax alone.

Once open, the addition, known as the Summit building, is expected to create about 3,900 new, ongoing jobs, and generate approximately $260 million in new customer spending and $19 million in sales taxes annually. It also will create a key link in the Pike/Pine corridor between Capitol Hill and the renovated Waterfront.

Follow Hanna Scott on Twitter or email her here.

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