The Convention Center's Books

The annual report shows a $16 million operating loss for 2024. The audited financial statements — which include $53 million in annual depreciation that the annual report omits — show a $69 million loss. The $16M is the management accounting view — what it costs to operate the building. The $69M is the financial accounting view — it includes the $53M per year the Summit building loses in value. Bond covenants, credit ratings, and any restructuring analysis are written against the audited figure. For the City, that's the number that counts.

The $200M+ in reserves that existed before the Summit opened was a construction fund — money raised in advance to build the Summit building. Between 2022 and 2024, that fund was spent: the Summit came in $300M over its original $1.6B budget. The reserve drawdown was a one-time event. It is done.

What remains is roughly $22–25M in liquid reserves — an operating reserve ($16.3M per the Dec 2024 balance sheet) plus a debt service reserve ($6.1M). CEO Jennifer LeMaster confirmed "about $25 million" in February 2026.

The accounting loss of −$38.5M/year is real on paper — but $52.9M of it is non-cash depreciation on the Summit building. Strip that out and the 2024 cash picture is nearly neutral:

At 2024 lodging tax levels, the organization is nearly cash-neutral. The remaining reserves are not being drained by ongoing operations — they're stable at about $25M.

CEO Jennifer LeMaster, February 2026: "From their high of more than $200 million, the reserves today sit at about $25 million." The same interview: "I'm not going around saying the sky is falling, but I want people to be aware that we're in a fragile position."

The fragility is real. But it isn't that reserves are draining. It's that the $25M cushion is thin — and the lodging tax stream that keeps everything balanced is more exposed than it looks.

The PFD's bonds are not secured by the convention center buildings. They are secured by a lodging tax stream: 7% on hotel rooms inside Seattle city limits, 2.8% on hotel rooms in the rest of King County. In 2024, Seattle's 7% stream produced $93.5M; the county extended rate added $6.4M; total $99.9M.

That $99.9M covers debt service ($89.9M gross) with roughly a $10M buffer. The buffer is thin. And it depends entirely on Seattle hotel rooms being the ones that fill up — not Bellevue's.

Bellevue is building a hotel market. The Crosslake mixed-use district, new hotel construction along the eastside light rail corridor, and Bellevue's growing convention capacity create an alternative that barely existed before the Summit opened. A convention that books the SCC but houses attendees in Bellevue hotels pays 2.8% to the King County extended fund — not 7% to Seattle. The rate differential matters at scale.

What accelerates migration? Convention site selection factors in the experience outside the building, not just inside it. The Pike-Pine corridor — the blocks between the convention center and Capitol Hill, and between the center and downtown hotels — is the lived environment for attendees. If that corridor is perceived as unsafe, dead, or unwelcoming, conventions notice. Bellevue offers a controlled, walkable hotel environment with newer inventory.

A slow drift of hotel room nights eastward doesn't show up in convention booking counts. The SCC could report record events while its lodging tax base quietly erodes — because the attendees are staying across the lake.

The Summit construction came in $300 million over its original budget. The bonds are not secured by the buildings — they are secured by the lodging tax stream: 7% on hotel rooms in Seattle, 2.8% in the rest of King County. This distinction matters: the Arch can change hands or operators without triggering bondholder claims.

The $38 million in food service revenue is the SCC's biggest income source — bigger than building rent, bigger than parking. The convention center makes more money selling boxed lunches to captive attendees than it does renting the halls they're standing in.

This creates a structural conflict. The SCC has no financial incentive to make it easy for attendees to eat off-campus. The exclusive contractor model is the business model. When the Aramark contract expires January 2, 2027, the board faces a direct choice: renew and stay in the captive-catering business, or restructure and open the building to a food hall model that serves the neighborhood instead of extracting from it.

That contract expiration is the hinge on which the Commons proposal turns. See The Operational Plan for the full contract analysis.

In 2019 — the last full year before COVID, operating as a single building — the Arch generated $37 million in revenue against $37 million in expenses: $74,000 in operating income. Breakeven. The building was self-sustaining.

The Summit opened in 2023. Revenue across both buildings increased 58 percent. Audited expenses increased 246 percent — from $37M to $128M. The organization was built to run one building and suddenly had two — twice the maintenance, twice the debt service — without twice the conventions to justify it.

The two-building model is losing $69 million a year on an audited basis. The one-building model broke even. The math points to the same conclusion the proposal reaches: one convention center, one public commons, operated separately.