March 11, 2006
Q: How do you make $7 billion disappear?

A: Ask Paul Allen.

Before Seattle's city leaders pour any more money into Paul Allen's South Lake Union biotech boondoggle, they should stop and read this article from today's Wall Street Journal :

[No U.S. cable companies] are as feeble as Mr. Allen's Charter Communications Inc. Its $20 billion of debt is 50 times the market value of its stock ($409 million). Mr. Allen's 58% stake is worth $250 million, a far cry from the $7 billion-plus he spent buying Charter and Marcus Cable back in 1998.
Sadly, he still has more business acument than do the dopey politicians whom he's convinced to subsidize his money-losing schemes.

Posted by Stefan Sharkansky at March 11, 2006 09:24 PM | Email This
Comments
1. Stefan,
Is this the same biomedical/reseatch company Queen Chris was taughting as the job creattion that woulld save Washington?
Doesn't look to me like many jobs will be created unless Washington state has turned into the WPO of the past.
I don't think one dime of public monies should go to bail Allen out of this one

J

Posted by: Jim L on March 11, 2006 10:16 PM
2. Now, I am disgusted, our tax dollars are going to Paul Allen's biotech??????????

Sadly the new transportation bill passed has big bucks for a streetcar in South Lake Union........

Posted by: sgmmac on March 11, 2006 11:17 PM
3. Here's a great story from KGW today about Paul Allen not wanting to dump any more money into the Portland Trailblazers either:

http://www.kgw.com/sports/stories/kgw_031106_sports_allen_blazers.15602000.html

I suppose he could always spend some of that money at the dentist...

Posted by: Randy Mueller on March 11, 2006 11:20 PM
4. He'll be selling the trailblazers and buying the Sonics so he can get Queen Christine to buy him another new stadium!

After all he is only the 5th richest man in the world, he should not have to pay for all these losers without tax payers assistance!

Posted by: GS on March 12, 2006 02:14 AM
5. Jim,

I think there are two things going on in this post, and you might be confusing them. The first is Charter Communications, which definitely is not a biotech company. Heck, it's barely a company at all anymore. Charter was Allen's attempt to make up for selling out of AOL when it was less than a $1/share (accounting for splits) by building a nationwide company that would knock those fat cats at Comcast off their perch. It never worked.

The biotech aspect of this is that Allen's Vulcan company owns large sections of South Lake Union and he is building it up as a biotech hub, full of incubation companies and smaller biotech concerns in the same way certain streets in San Jose once were full of start-up network hardware companies (Zanker Road comes to mind). This is where the streetcare comes in, as Paul has demanded that the city provide some sort of non-bus mass transit to entice all those biotech companies to fill his buildings as he builds them. For South Lake Union, this building is probably a very good thing and hopefully these companies will bank on the easy access to UW and the Hutch for the brainpower needed to solve all our future health issues. That said, it is amazing that these brainiacs would need a streetcare to get them the five blocks from Allen's 2200 project to their biotech start-up. It's a Boondoggle with a capital B, totally unnecessary except that it looks neato on Vulcan's marketing brochures. If it weren't for mass transit soft-heads like those in da Mayor's office, Vulcan's progress would probably be slowed about .01% a year. Yup, that's worth taxpayer dollars. NOT!

Posted by: Marc on March 12, 2006 07:54 AM
6. How about Port Quendal as another example of this clown's ability to get pols to pour money down a rat-hole of a losing scheme. He is not an asset to the comunity, he is a plague.

Posted by: 4theRecord on March 12, 2006 08:12 AM
7. This is the way Democrat rich cats work. Make the taxpayers pay for their mistakes and protect their wealth. The taxpayers won't notice. Democrats always say the rich republicans yet it you look on the west coast who gets all the money Lawyers(hide the records to prevent lawsuits), wealthy contributers to the Democrats, Special Interest groups that demand money to keep alive and Unions by higher pay so the unions can skim more money from the membership to give to the Democrats.
Does anything get done to improve transportation no only by adding more taxes on our back to pay for the new roads and then the money gets diverted to special interest. Look at the cost for any new roads project. Most of the expenses seems to be special interests getting jobs to do enviromental studies. I guess 1/3 of the cost of the project to these studies is appropriate but If transportation is an emergency do we really need to do a 3 to 5 year enviromental study on 405 to add a new lane in each direction. And you break this report in parts so when a 5 mile stretch is studied Delaying the work. you have to start all over again on the next stretch. Just an idea of the waste built into the system. Delay delay delay is the name of the game. Because the Democrats care about the worker they never fix anything because then they can not claim they care about the worker.

Posted by: David Anfinrud on March 12, 2006 08:14 AM
8. Washington State politicians are "star-struck sick" with the Gates & Allen disease.
Communities around our State "dream" of handouts from these 2 to build idiotic projects with the Elected Officials name on it.
It's ridiculous.
These Elected Officials fall all over themselves for these 2 and NEVER dig into the viability or make a clear business case.
It is "celebrity worship" pure & simple.
Hell, Paul Allen probably has Dentists clamoring to fix his gnarly, "yeller" teeth for free....or they will PAY Paul for the "privilege" of fixing that gross smile of his.

You gotta hand it to Paul & Bill....they have mesmorized stupid politicians. Kind of a "trance-like" state where no one would DARE question them on anything. Just open the Public Checkbook...the easiest thing to do is take a big old bucket of slop from the trough, even for billionaire-Lefty's.

Posted by: Mr. Cynical on March 12, 2006 08:57 AM
9. Excuse me. But since the average cable only bill for Charter cable is about $45 (not including taxes) and they say they have about 5,991,500 subcribers.

Thats $269,617,500 a MONTH, that this company is bringing in.

Say that 25 percent of them have basic high speed internet at $20 a month and there is another $29,957,500. And their stock is worth how much?

Posted by: Mike P on March 12, 2006 11:38 AM
10. What is all this - I LOVE hometown boys who make it big - the biggest- in the international capitalist world.

What is all this put down of
Gates and Allen - heros of John Galt for sure.

I really do like it when the worst thing you can say about someone is they have billions and live in my home town.

By the way - Gates is an old
Seattle family - Dad is a big time downtown attorney.

What is this site, a bunch of communists?

I thrive on the succes of Americans, true American, business sucess. You all like China better here...... maybe France?

Posted by: Jack the investor on March 12, 2006 10:12 PM
11. Well, Jack, let's work out a tax scheme where you are donating money to these gadzillionaires. I don't want any part of it.

And they weren't a bunch of Shirley Temple's when they were starting up. I don't know if those old programs are still around chronically Microsoft, but it is very illuminating.

Paul Allen's actions with the Trailblazers, Quendall, S. Lake Union, et al. fits into the motif operandi and it wasn't pretty when they started up.

Paul Allen is beginning to sound like a stupid businessman. Smart maybe hanging out with some of the smarter Microsoft people, but dumb on his own. If he keeps getting bailed out by dumber politicians, then maybe he isn't so dumb after all.

But count me out of the cheerleading squad.

Posted by: swatter on March 13, 2006 07:44 AM
12. I'm still mad at Allen for building right in front (to the west) of the flagship REI building - ruining the views of the Olympics from there. Ahhh, progress.

Posted by: Robert on March 13, 2006 09:08 AM
13. Portland loves Allen too.

If you took all the hate libs have for Cheney and put it to Allen- it would be well deserved.

Posted by: Andy on March 13, 2006 09:44 AM
14. I agree - multimillion dollar giveaways to billionaires doesn't make sense. I'm fine with giving him a biotech tax credit against future earnings he gets from attracting whatever biotech companies to the area (if it happens), but that's about it.

Now he better pony up for Steve Hutchinson since they didn't franchise him and Minnesota just offered him a fat contract.

Posted by: Palouse on March 13, 2006 02:19 PM
15. They don't call Paul Allen "The Accidental Zillionaire" for nothing. He has good intentions, but, unfortunately, has a habit of making ill-advised business decisions.

His massive fortune and Seattle real-estate holdings have given him disproportionate power to push his "visions" on the public.

Before we spend (waste) more public money on one of his pet projects, it would behoove us to remember his past record and learn to say "no".

Posted by: The Phantom Republican on March 13, 2006 05:43 PM
16. Gates does a lot more for the community at large than Paul Allen ever will. Little Pauly boy doesn't do anything without huge strings attached. The Gateses are giving their money away in record amounts (and for all you communists reading this who don't think they do enough, start your own company and give away all the profits). And the employees of Microsoft and the Gates Foundation have true living wage jobs, unlike the weenie slingers at Qwest field. Don't forget the state gave Boeing a lot of grief over tax break and expansion issues and look what happened. Which do you think will have the biggest impact on the economy--Microsoft moving to another state or the EMP and the Seahawks disappearing from view?

Posted by: Burdabee on March 13, 2006 06:20 PM
17. A:

Give it to Queen Christine, 7 Billion would be a drop in the bucket and gone is a slit second. In a special "Emergency" account I am sure!

Posted by: GS on March 13, 2006 07:39 PM
18. Paul Allen is the drop out hillbilly that got lucky. Wish him luck because he could be you or me. Except that we have more class and more education.

Posted by: Elaine on March 13, 2006 09:05 PM
19. Paul Allen may ultimately do Portland no favors - maybe like Bob Whitsitt. Hopefully, Portland will be able to salvage a basketball franchise in spite of Allen's financial mismanagement - but what the he!! - he can afford it, even though his recent investments are ridiculous. Trusting his judgment is the kiss of death...

He is just another one of these pro sports owner who try to suck off the public by way of the local government and be subsidized. Rather despicable - eh ?

Posted by: KS on March 13, 2006 09:33 PM
20. Yeh -- Allen has sure left his mark on Seattle -- a giant pile of dog turd under the space needle.

Posted by: Bill on March 14, 2006 01:34 PM
21. And that Dog pile is not making any money either! But it does house his massive hobby, and I am sure it is set up as a 501 charity!

Posted by: GS on March 14, 2006 06:33 PM
22. My vote for the new Washington slogan is #11..Andrea

Posted by: Andrea on March 17, 2006 03:54 PM
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