Abstract: In 2012, the city of Seattle, Washington, entered into a public–private partnership (P3) whose goal was the construction and operation of a new sports arena. The cornerstone of the P3 was a unique lease-purchase financing (LPF) agreement markedly different from lease-purchase contracts that governments typically use for acquiring capital goods. This article has a twofold objective. First, it details Seattle’s agreement and contrasts it with other relevant P3s. Second, it identifies a number of potential sources of additional public costs and risks overlooked in the subsidy debate. Because it offers local governments and franchise owners a number of benefits, it is anticipated that Seattle’s lease-purchase model will be used by other municipalities in the future. This case study can be used in future LPF subsidy debates to improve public-sector outcomes.