City, county leaders reach initial Seattle arena agreement with investor

BY Josh Kerns  on May 15, 2012 @ 6:32 pm (Updated: 12:07 pm - 5/16/12 )

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Investor Chris Hansen, King County Executive Dow Constantine, Seattle Mayor Mike McGinn (not pictured) announce the next step in securing a new arena in the SoDo neighborhood. (Seattle Channel)

The NBA is one step closer to a return to Seattle after city and King County leaders announced they've reached a memorandum of understanding with the investor leading the effort to build a new arena.

Mayor Mike McGinn and King County Executive Dow Constantine made the announcement with hedge fund manager Chris Hansen. The MOU is a legally binding document that would essentially give Hansen the go-ahead to proceed on the preliminary work for the arena he wants to build in Seattle's SoDo neighborhood.

That document will now be sent to the King County and Seattle City councils for approval.

The deal is far from done. In a statement, Councilmember Tim Burgess, Chair of the City Council's Government Performance and Finance Committee, said, "The Council will thoroughly review the Mayor's proposal for a new sports arena. We will determine if municipal bonds for this project are an appropriate and wise commitment from the City. We will also explore any risks to the City's financial stability and whether this investment provides sufficient public benefit."

Under the terms of the agreement, Hansen and his unnamed investors would pay the majority of costs for land, construction and acquisition of both and NBA and NHL franchise.

Taxpayers would ultimately contribute $200 million to help finance the arena through bonds, which would be repaid with revenues generated by the arena. The city and county would own both the arena and the land.

But the public share would be would be limited to $120 million if just an NBA team is secured first. The agreement calls for the remainder only when an NHL team is secured by the investment group.

"This commitment of $800 million of private capital is one of the largest commitments of private capital ever made for a project like this. It means jobs, it means investments, it means revitalization and that's a good deal," McGinn said.

The MOU limits King County's share at 40 percent, with Seattle paying the rest. McGinn calls that more than fair since the city enjoys the greatest benefit from the new arena.

The Mariners, Port of Seattle and other business groups have raised concerns about the impact of the new arena on freight mobility in the area. Hansen recently commissioned a traffic study for the SoDo neighborhood, the results of which he says will be released soon.

In a letter to their respective councils, Constantine and McGinn write that "while there are challenges in the SoDo neighborhood, including freight mobility issues, let us not forget that it is the largest transportation hub in the region. Link light rail, a Sounder train line, three bus rapid transit lines, 21 Metro bus lines, nine Sound Transit Express bus lines, four ferry routes, two interstate freeways and a future deep bore tunnel converge in this neighborhood. There is no other site in the region that possesses the transportation assets that are unique to this area, which is a major reason the existing sports facilities are located there."

Hanson says he wants to have a finalized agreement in place before the NBA Board of Governors meets next month, in hopes of possibly acquiring a new franchise.

Read all related documents on the Seattle arena proposal here.

Josh Kerns, MyNorthwest.com Reporter
Josh Kerns is co-host of KIRO Radio's Seattle Sounds (Saturday nights 7-8) and a digital content producer for MyNorthwest.com.
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Comments (30)


  • Add A Comment

  • Hayduke wrote...
    I guess I missed the news stroy that Seattle and WA State's budget were once again the the black.
    May 15, 2012 9:09 pm
    Because that would explain why we now think it's OK once again to give corporate welfare to a sports team. I'm also glad to know our potholes are all filled, we have adequate emergency services, public education, and everything else.

    But I have to ask our esteemed mayor, if this is such a great deal for the people of Seattle, and we won't lose money on it, then why can't Chris Hansen go get a loan from, oh, I don't know, A FukkING BANK?

    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Newton wrote...
    These Crimnals Never Stop ripping you off.
    May 15, 2012 9:28 pm
    Wheres the BackBone of the King County Citizen, to just say NO!!!. Don't need another Suck team like the Mariners. Don't want a to pay for it.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • C"mon Man wrote...
    Great
    May 15, 2012 10:10 pm
    Good news for the economy, as it will create jobs in and around the venue, now has David Stern signed on to a franchise?
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • anotherfencewalker wrote...
    I cant hold my breath that long..
    May 16, 2012 8:21 am
    The NBA is operated by thugs in tuxedos. Same as the players. Until the city/state is ready to bargain and play the same way, its never going to be a done deal.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Hersey33 wrote...
    The morons on these boards...
    May 16, 2012 8:55 am
    Never cease to amaze me. Chris Hansen is putting up $290 million for an arena that the CITY will own!! Not Mr. Hansen. All of the taxes use will be recouped from revenues from the arena that wouldn't exist anyways and there is a capped limit of $200 million in tax payer money to be used. All overages will be handled by Mr. Hansen himself. If you're going to comment on something you should at least know what you're talking about.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Citizen of Krazy Town wrote...
    @Hersey, apparently you forgot that the county owned the Kingdome too
    May 16, 2012 12:37 pm
    And was deeply in debt for maintenance costs when they tore it down. Hansen, and every other "benefactor" understands that the cheap part of the stadium business is the initial construction. Decades of care and upkeep FAR exceed those initial costs.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • messiah101 wrote...
    Hersey33
    May 16, 2012 1:57 pm
    Chris Hansen putting up $290 million?? I seriously doubt it.Have you or the city done a background investigation on Mr Hansen to determine his personal wealth?Would you lend someone a huge sum of money on the premise that you would be repaid if a NBA and other activities held at the arena would generate sufficient income to pay you back?Lets do the numbers,$200,000,000 at 4% would mean $8,0000,000 alone per year in interest which means the arena that currently has no team would require that it generate about $22,000 per day (every day of the year) in ticket tax just to pay the interest on the bonds the city will be financially responsible for. If the investment is so safe why doesn't Hansen simply go to a bank and pay them for the loan?
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Hersey33 wrote...
    Messiah...
    May 16, 2012 5:13 pm
    If you actually read about this situation you would understand that the arena DOES NOT GET BUILT without a team. All that is happening right now, is a MOU and when they vote, it will only be to be ready to build. An arena will not get built without a team..I repeat..not get built without a team. Also, I have not done a background check on Mr. Hansen but I guarantee the city has. You're just reaching for reasons..and they aren't any good or correct.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Forrest wrote...
    If it was a great deal and economically viable,
    May 16, 2012 9:02 am
    Chris Hansen would do it on his own.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • b1202 wrote...
    READ SLOWER!!!
    May 16, 2012 10:19 am
    HEY...Hayduke and Newton....You wont pay a single penny for the arena, teams, or anything else. This will be paid for by Chris Hansen and the fans who attend the games. Get on board guys! This deal is as good as it gets.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • wcremedy24 wrote...
    b1202
    May 16, 2012 10:46 am
    Don't bother, they don't want to know what it's about.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Gen_Satan wrote...
    Plans in motion
    May 16, 2012 10:27 am
    Can ANYONE remember the last time Seattle had a NHL team? This looks promising but as a native PNW'r I am worried that we will dump all this money into an arena that we will end up with another crap team that doesent have a snowballs chance in hell of winning anything. As for all the job's this will produce, you might be looking at around 200 - 250 full time permanent positions created. Don't feed me lines about "economic stimulating" BS. I'll believe that when I see it.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • b1202 wrote...
    DEAR GEN SATAN
    May 16, 2012 11:10 am
    Dont worry about the money. Its not an issue. Read the story again. Chris Hansen is putting up his own money. The fans will pay $200 million, but this will be collected through taxes on ticket prices and concessions. The public/ city/ county will not chip in a single cent. This deal is MUTHER FUNKIN AWESOME!
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • tgowt3 wrote...
    @all bitter bettys
    May 16, 2012 11:58 am
    This is a great deal. I challenge any of you that think this is terrible to find another example of where a city would own land and an arena that it doesn't pay for. Yes, money comes from tax payers to fund this but it's a small amount and the money will be reimbursed. David Stern won't like this deal because it doesn't fit their mold of "rape the local economy and hold them hostage". Hansen is doing this the right way. He's kindly strong arming the NBA back to Seattle. If you don't agree with professional sports then don't support them. But for god's sake, don't block the rest of us from enjoying them. Oh no, another horrible team in Seattle....GO AWAY THEN! Even a bad team brings in jobs. So sick of the negativity!
    { "Thumbs Up":"1","Thumbs Down":"-1" }
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