Updated May 16, 2012 - 12:07 pm
City, county leaders reach initial Seattle arena agreement with investor
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.
Follow Josh Kerns, MyNorthwest.com Reporter
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