Steel Tariffs Impacting Sports Facility Construction
By Evan Weiner |
The Donald Trump tariff on steel, rebar and aluminum has caused the estimated price of the renovation of Seattle’s KeyArena to rise by about $100 million. The Seattle project probably won’t be the only sports plan impacted.
Oak View Group, which is renovating the Seattle building and will be part of the New York Islanders arena project, cannot be happy with the economic policy. The revamped Seattle arena will more than likely be the home of an NHL franchise starting in 2020.
Oak View Group CEO Tim Leiweke told Bloomberg News, “We have seen a rapid inflation on those costs. Even when you have manufacturers and suppliers that are within the United States, they know they can charge more now because of the tariffs.”
The Seattle City Council will make the final decision on going ahead with the renovation of the arena sometime in September. Oak View Group is proceeding with its plan as if it has received the green light from the Seattle governing group. Oak View is also waiting on an environment impact report to be approved by New York State officials so it can start the Islanders arena project in 2019 on land adjacent to the Belmont racetrack near the New York City, Nassau County border.
Leiweke doesn’t seem too concerned with the sudden rise in costs. He can make it up elsewhere.
“Money is reasonably cheap still,” he said. “If you can go out and borrow it at a decent rate, why not challenge yourself and put the burden on things like naming rights, suites, premium seats and sponsorship?”
That thought may be fine in Seattle where there are just three major league teams, baseball’s Mariners, the NFL’s Seahawks and the MLS Sounders along with the University of Washington sports. There is corporate money available for an NHL team. Trump’s tariffs are not doing sports builders any favors.
This article was republished with permission from the original publisher, Evan Weiner.