A $71.5 million venue represents 'a big leap of faith' for the city

After a turbulent birth, 17-½ months of construction and a total cost of $83.3 million, the Everett Events Center is ready for its coming-out party.

It is the largest venue of its kind in Snohomish County, big enough to hold concerts, trade shows and professional ice hockey but flexible enough to downsize and host high-school graduations and theater productions.

City officials are heralding its opening as the start of a new downtown Everett; they hope it will be the impetus for a revitalization of the city's core. City-commissioned marketing studies say the new facility will draw 600,000 people annually to downtown Everett.

"We're going to have activity and action in the downtown area, and it's going to be positive," Mayor Frank Anderson said. "That's one of the main reasons we did this project. A city the size of Everett, we shouldn't have to drive to Seattle for all our entertainment."

But the grand opening comes at a time when the county's jobless rate is 8.2 percent, its largest employer — Boeing — continues to trim jobs and many area businesses feel consumers' reluctance to part with their dollars.

Skeptics say this is a tough time to open a major entertainment venue, one that is largely dependent on discretionary spending. Some say banking on public acceptance of ice hockey, in a city where the sport has little history, also is a huge gamble.

But now that the opening of the glass-and-brick building is days away, its twin masts reaching high above the surrounding roofs, even critics say they hope the gamble pays off.

"I agree with the concept of the special-events facility," said former Everett City Councilman Dan Warnock. "But I think the process could have been more open. I don't know if the public realizes what they gave up for this or what else the money could have been used for. ... But I also think it's a tremendous entertainment venue for any community to have."

The arena portion of the center will open to the public Saturday for a free open house featuring school bands, dancers, magicians and other entertainers. The new junior-league professional hockey team, the Everett Silvertips, will play their first home game Oct. 4.

The building was completed nearly a month ahead of schedule and did not go over its final construction estimate of $71.5 million. But as the opening nears, there is a last-minute list of details to contend with, said Kim Bedier, the general manager of Global Spectrum, which oversees the day-to-day operations of the events center.

All the while, the enthusiasm and the anxiety are mounting.

"This is all new; there hasn't been a building of this nature here before," Bedier said. "It's a big leap of faith."

'Whole downtown experience'

The city recently hatched a marketing strategy to amplify the buzz surrounding the center's opening and push the project into the limelight.

The slogan they came up with — "It's a whole new game" — will be featured on banners, buses and posters throughout the city, said Kate Reardon, Everett's public-information director.

"We want people to come here and eat dinner, go to the events center, do some shopping, spend some time here," Reardon said. "We're trying to make this a whole downtown experience."

The events center takes up two city blocks, its facade a combination of red brick, sleek green metal and blue corrugated steel. The building has three main areas: the arena bowl and concourse; a 14,000-square-foot convention center, including a ballroom and meeting rooms; and a community ice rink.

Retractable seating between the arena and the community ice rink allows the two areas to be connected, with 57,000 square feet of total floor space. Events-center managers hope this area will attract promoters of large-scale trade shows.

The interior of the conference center is still under construction and should be completed by Nov. 15, in time to host holiday events, Bedier said. A nearby Snohomish County parking garage is expected to be completed in February. Until then, patrons can park in adjacent small lots or find street parking, Bedier said.

So far, nearby residents haven't raised concerns over parking, and in general, the new facility is basking in praise.

"I love it. I think this is a great idea," said Bill Hulslander, who lives four blocks from the events center. He and his wife, Annette, bought Silvertips season tickets.

"I'm a hockey fan, but I'd also come here if they had boat shows or trade shows. I've heard they might have a circus or 'Disney on Ice.' It's going to be great."

The center will probably not draw national conventions or meetings — those events would go mainly to Seattle, said Betsy Gabels of the state Department of Community, Trade and Economic Development.

And the Everett center will have to compete with other new facilities, she said. For instance, the Tulalip Tribes are planning a 500-room hotel and convention center adjacent to their new casino, and two other Snohomish County cities are planning or considering convention facilities.

"But the Everett facility is somewhat unique because it provides a sports venue in conjunction with the convention center," Gabels said.

"I think that was a smart move on their part. It's diversified enough to attract different market segments. I think this will allow them to be competitive in a competitive market."

Early struggles

Even before the land was cleared, the events center drew a mixed response from residents.

The city began acquiring 16 parcels of land for the redevelopment project in early 2000. Many of the buildings had fallen into disrepair.

However, some had been registered with the city as historic sites, and the Everett Historical Commission wouldn't grant waivers to allow the buildings to be demolished. The City Council overruled that decision.

"They were not the world's greatest buildings, but they were already on the Everett registry of historic sites," said Mark Garcia, a historical commissioner. "They were among the oldest buildings in Everett."

Residents formed a group called Citizens for a Better Arena to battle the condemnation and destruction of the historic buildings. They gathered signatures for a ballot measure that would have prohibited building the arena on Hewitt Avenue.

However, a Snohomish County Superior Court judge dismissed the case for a number of reasons, including that the complaint was made too late in the process.

Warnock, then on the City Council, voted to acquire the land, but once the cost of the project leapt from an estimated $50 million to uncomfortably close to $100 million, his support waned. The project cost about $83.3 million, including $11.8 million to purchase the land and $71.5 million to construct the center.

"I think I'm the only council member who argued that the city couldn't afford to do this," said Warnock, who lost his re-election bid in 2001.

He says he is concerned that the events center won't be able to generate the revenues to cover its costs. Then the city could be stuck subsidizing the center out of its own dwindling budget, Warnock said.

"I didn't think we could cash the check we were writing," he said. "I hope they fill all their seats every day. I hope people enjoy it; it's a huge commitment to build this thing."

Paying for the center

Besides $11.8 million the city doled out from a capital-improvement fund to pay for the land, Everett pitched in $15 million toward building the new center. The city used its credit to guarantee $36.5 million of a $54.5 million loan for construction; the Everett Public Facilities District, created to operate the center, is responsible for the rest of the loan. An additional $2 million has come from hotel-motel-tax revenues and state sales-tax rebates.

Everett hopes to recoup its $15 million through a 5 percent admissions tax on event tickets. The city will also make money renting space to the Everett Area Chamber of Commerce and possibly other organizations that want to be located inside the new building.

The formation of the facilities district allowed the city to take advantage of the state sales-tax-revenue rebate program. The sales-tax revenue will ultimately make up more than 6 percent of facility revenues.

The construction loan is expected to be repaid through a combination of events-center revenues, sales-tax rebates and hotel-motel-tax revenues, said Fred Safstrom, executive director of the public-facilities district.

The center's operating budget is still being developed, but revenues, after expenses, are expected to be about $3.3 million annually, Safstrom said. That money will go toward paying the debt and its interest, he said.

"I don't blame anyone for being concerned; I think you should always be looking at things with a clear eye," Safstrom said. "But with the financial structuring of the events center, it should be generating surplus."

Safstrom said the center should be self-supporting from Day One.

"Its debt structure is lightest in the early years, to give us leeway to get up and running at full strength," he said.

Sticker shock for companies

Deals to get advertisers, corporate sponsors and food vendors into the new center have lagged, although events-center managers say they're picking up.

Part of the problem with selling advertising in the arena is that local businesses are not accustomed to paying the kind of money a multipurpose facility commands, events-center managers say.

Potential advertisers may be experiencing some sticker shock, especially when prices are compared with the lower advertising and sponsor rates charged by the Everett AquaSox, said Eric Blankenship, Global Spectrum's director of marketing and sales for the events center.

That may explain why the naming right, a key revenue source for the new facility, has yet to find a taker, Blankenship said. But Global Spectrum is optimistic that the center will have a new, paid-for name within the next year, he said.

Global Spectrum has announced one major corporate partner, NorthWest Plus Credit Union, which will provide automated teller machines inside the center.

"It's been slow. I think that's a reflection of the economy right now," Safstrom said.

But the economic downturn has also worked in the events center's favor, Safstrom said.

"The economy has slowed the sale of (luxury) suites and other things; it has also resulted in a lower interest rate than we had expected," he said. "Those lower interest rates offset the shortfall in sponsorship revenue."

The events center's box office wasn't able to print tickets until several weeks before the first Silvertips game, which may have initially slowed ticket sales, said Zoran Rajcic, the Silvertips' director of sales and marketing. Still, the team took 2,000 orders for first-game tickets and sold 2,200 season tickets before software was installed, Rajcic said. The arena will hold about 8,200 for hockey games.

"We would have liked to have had our ticketing software already up and running earlier," Rajcic said. "But it's a new facility. You have to learn to roll with the punches."

And the center's marketers are finding ways around the slow economy, he said. For instance, only one of the 20 luxury boxes had sold as of Monday, but some may be rented on a game-by-game basis, he said.

The luxury boxes go for $30,000 to $40,000 annually, depending on the location. Purchasers are required to sign a three- to seven-year lease.

Events not related to hockey have also signed up slowly for the center; so far just two, "Disney on Ice" (Nov. 5-9) and the Harlem Globetrotters (the date hasn't been set), are expected.

The center is in negotiations with the Ringling Bros. and Barnum & Bailey Circus, "Sesame Street Live," "Champions on Ice," a rodeo and a boat show, Blankenship said.

Local restaurants were initially sluggish to sign up as food vendors, but in recent weeks that has changed.

Patrons will be able to purchase a Flying Pig Brewery "Mango Bango" sandwich, Ivar's clam chowder in a bread bowl and Alfy's pizza, Blankenship said.

Advertisers who have signed up say they believe their investment will pay off in the long run. Among them are Chris Howell and Dean Brandt, owners of two Domino's Pizza franchises in Everett. Their logos will be featured on the Silvertips player benches and penalty boxes.

"I think this is great for the area, and in a situation like this, it's good to get involved as soon as you can," Howell said. "I know people will criticize anytime you do a project of this size. But once this opens up, I think that's going to go away."

View from another franchise

Mark Sperandio has been watching the construction of the events center. As the co-owner, along with his wife, of the Everett AquaSox, he knows the Silvertips will be his biggest competitor for advertising and sports-fan dollars.

So far, he says, he's not worried. Instead, he has a few words of advice for the new hockey franchise.

"The challenge is going to be for the first few events to come off without a hitch," Sperandio said.

"People have expectations. How long does it take to buy a ticket? Find a parking spot? How friendly are the ushers and ticket takers? When they go to buy food, how long did they have to wait in line? Those first impressions are critical."

Sperandio said he hopes the events center will succeed and bring more people and businesses downtown.

"It's good Everett is doing this and revitalizing the city," he said. "They might have a tough time at first, but more people coming into Everett would help bring more business here and help us come out of the recession."

Rachel Tuinstra: 425-783-0674 or rtuinstra@seattletimes.com