SBD/September 12, 2012/FacilitiesPrint All
The announcement that the Seattle City Council had reached a tentative agreement with investor Chris Hansen to build a $490M arena in the city's Sodo neighborhood "drew widespread support from city and county business and political leaders Tuesday, and from sports fans who celebrated the possible return of the Seattle SuperSonics,” according to a front-page piece by Lynn Thompson of the SEATTLE TIMES. Even Port of Seattle officials, who had “warned that the Sodo location could put at risk $3 billion in annual revenues and 33,000 maritime jobs, sounded more optimistic.” Port Commissioner John Creighton said, “I think it addresses a number of the Port's concerns.” Thompson notes the revised agreement directs $40M into "a transportation fund repaid by Hansen that would prioritize freight mobility and other infrastructure improvements." It also includes $225M in "public bonds that would be repaid with taxes and rents generated by arena activity,” and directs $7M to "improvements at KeyArena and planning for the future of Seattle Center.” The deal "strengthens financial protections for the city and county by requiring Hansen to double the security reserve if arena revenue fails to meet expectations.” It also includes "a personal guarantee by Hansen for five years of annual debt payments." The city council's Government Performance & Finance Committee tomorrow will “vote on the revised memorandum of understanding,” with agreement then going to full council for ratification "possibly on Sept. 24.” The Metropolitan King County Council “also must ratify the revised deal.” If the city and county both approve the deal, Hansen "will have the official backing he needs to search for an NBA team." A team "must be acquired before the city and county issue construction bonds and before ground is broken for a new arena.” Hansen also “agreed to annual audits to show his personal net worth is at least $300 million, and the city can conduct independent assessments of the viability of Hansen's business plan and the wherewithal of the other private investors, just like private lenders would require” (SEATTLE TIMES, 9/12).
COUNT ON IT: In Seattle, Nick Eaton wrote Hansen is “so confident in his plan to bring back the Seattle SuperSonics that he has made a personal guarantee to cover the public's financial risk if all other safeguards fall through.” That is “almost unheard of in these kinds of deals.” City Council President Sally Clark said, “It is something that, in Seattle, (with) public-private partnerships we have a checkered history. We are suspicious of private investment as government, in general, no matter who seems to be in office during which decade.” She added, “(Negotiation) was tense from time to time, but also I have to say we'd get back to collaborative pretty quickly, and I have to really applaud Mr. Hansen for that. He's a pretty open, confident guy. He is confident and comfortable in what he's trying to do. He does not appear to have any kind of hidden agenda” (SEATTLEPI.com, 9/11). In Sacramento, Dale Kasler notes Clark and other council members “didn't identify specific teams at a news conference announcing the agreement.” Clark said, “We certainly hear rumors about a couple of teams being on the market, this year or next” (SACRAMENTO BEE, 9/12).
TAKING A STAND: In Seattle, Danny Westneat writes, “I'll repeat what I wrote four months ago: The proposed arena would be the best deal for the public of any sports stadium built around here in 75 years. That's still true today.” Hansen “putting his own hide on the line is big news -- maybe the first step in repairing the tattered images of pro sports owners around here” (SEATTLE TIMES, 9/12). Also in Seattle, Jerry Brewer writes the arena deal and Hansen’s “prospects of luring back the NBA are near the brink of inevitability now.” Barring an “unforeseen disaster, his dream will materialize in due time.” The revamped deal is “unprecedented in its combination of financial protections for the city and county and its creativity in forging a more equitable public/private partnership.” This is a “victory for Hansen and for a local government often perceived to prefer contrarian politics over progress” (SEATTLE TIMES, 9/12). Basketball HOFer and former SuperSonics coach Lenny Wilkens said, “With this season being so close to starting, I would say that probably next year is the closest time Chris could get a team here. More than likely, the team would play at KeyArena until the (new) building is finished. But we can't forget, a few things still need to happen.” Wilkens, noting the deal needs formal approval, added, “That's what the NBA is waiting for. Once that's approved and they know that they're going to have a break-ground date, then I'm sure that Chris will make a formal petition to the NBA to see what teams -- if any -- are available” (SEATTLE TIMES, 9/12).
HAVE ONE ON ME: Hansen “offered to buy for all the Sonics fans who supported his arena proposal a beer at F.X. McRory's from 5 to 7 p.m. this Thursday.” Hansen, in a statement on his website, said, “Your voices were heard and your hearts spoke volumes. I really hope you all just appreciate how much it meant and what a difference each and every one of you made” (SEATTLE TIMES, 9/12).
NOT SATISFIED: A SEATTLE TIMES editorial states the new arena is “intriguing, but not enough to overcome skepticism.” The revised deal “must be vetted with special attention to what most worries the public: long-term financial risks, transportation issues and economic impacts, especially for the Port of Seattle.” The council members “deserve credit for transforming the conversation with a much-improved proposal that better protects taxpayers” (SEATTLE TIMES, 9/12).
BUYER’S REMORSE: In Sacramento, Marcos Breton writes, “So, that's how an arena deal is done! The owner drives the issue and puts up his own money, too. Who knew?” If Seattle wants the Kings, it also “has to take” team Owners the Maloofs. The Maloofs' play “all along has been for someone else to pay the freight while they control the team.” Breton: “How bad do you want that, Seattle? Why would Hansen agree to that?” (SACRAMENTO BEE, 9/12). Paul Nassif, the estranged husband of Adrienne Maloof -- sister of the Kings' owners -- said that he “needs to carry a gun to protect himself” from Kings fans angry “at the possibility the team might leave town” (SACBEE.com, 9/12).
The state of Wisconsin for the "second time in three years" is giving BMO Harris Bradley Center a $5M grant for "much-needed maintenance work," according to Don Walker of the MILWAUKEE JOURNAL SENTINEL. The grant "represents a change in position for Gov. Scott Walker." A spokesperson for the governor's office in December said that Walker believed the arena "had the ability to raise money 'on its own merits.'" Walker in March '11 rejected a Bradley Center proposal "for a $10 million bonding plan." Bradley Center spokesperson Evan Zeppos said that the arena "needed upgrades in many of its building systems, including mechanical, electrical, plumbing, lighting, roofing, seating and some flooring." Zeppos added that the grant "will not solve all the problems at the arena." He said, "There is going to have to be a public-private partnership while the community wrestles with the question of what to do about a new arena" (MILWAUKEE JOURNAL SENTINEL, 9/12).
KEEP ON THE SUNNY SIDE: In Phoenix, Mike Sunnucks reports the Suns and the city are "ponying up $10 million for renovations and repairs at US Airways Center," which are "already under way." City of Phoenix Finance Dir Jeff DeWitt said that the city is "covering $7 million and the Suns are paying $3 million." Sunnucks reports the Suns are "paying to replace some seats in the downtown Phoenix arena to convert some luxury boxes into smaller theater boxes." Suns Senior VP/Communications & Public Affairs Tanya Wheeless said, "From a fan experience standpoint, we will be replacing a large number of seats in the upper and lower bowl areas. We will also be adding more theater boxes, which have been well-received by the market as businesses look for a high-end, all-inclusive option to entertain business associates." She added that the new effort "will include installation of seven additional theater-style boxes on the suite level of the 18,400-seat arena" (PHOENIX BUSINESS JOURNAL, 9/7 issue).
Sabres Owner Terry Pegula on Monday "talked about his vision" for the new hockey-themed development across from First Niagara Center in downtown Buffalo, and said that he "took inspiration from Pittsburgh," according to Jill Terreri of the BUFFALO NEWS. Pegula said, "When I first went to Pittsburgh in the early '70s, it was a dingy steel town and through their sports teams and through a lot of hard work and dedication by people like the mayor and the citizens, they transformed the image of the city." He added, "Just 'cause this is Buffalo doesn't mean it can't happen here, too." Pegula credited Sabres President Ted Black and Chief Development Dir Cliff Benson "with coming up with the concept of the development, which includes a hotel, parking garage, restaurant and retail space." Pegula said, "We always use the term 'a destination to play hockey' for the Buffalo area, so obviously this is going to add to the quote 'aura' of coming here to play if you're a professional player." City officials said that the development "is on track for a March 1 groundbreaking." The parking garage, rinks, restaurant and retail space "are expected to be ready by September 2014, and the hotel is scheduled to be finished by spring 2015." Pegula also has been "thinking about how construction will impact Sabres fans." He said, "I don't know exactly how we minimize the impact while we're doing the construction. I've thought about that quite a bit, if we're going to have fans down here and be playing hockey with the NHL team, but I guess that's something for our planners to do" (BUFFALO NEWS, 9/11).
FRIENDS 'TIL THE END: Pegula on Monday also said that Sabres management and players, who "would be barred from contact during a lockout, would keep their bond if the NHL shuts its doors on the players." Pegula: "That's just a temporary thing. We all know that. If anything happens, there will be no lasting effect after." He added, "I can't tell you anything, just that talks continue. I don't want to lose draft picks." In Buffalo, John Vogl noted the Flames announced recently they "plan to cut the salary of team employees when the lockout commences." Pegula said that the Sabres "have not discussed their employees' wages, which were trimmed during the 2004-05 lockout by previous ownership" (BUFFALO NEWS, 9/11). Pegula said that if there "were to be any sustained work stoppage, he had no plans on cutting the pay of his administrative staff" (AP, 9/10).
In Las Vegas, Ed Graney notes the UNLV Now project is “moving forward,” and plans would include a “mega-events center and on-campus stadium surrounded by a retail district.” It could cost “in the neighborhood" of $2B. In the “arms race that is college football, pristine facilities have become the norm for those who want to compete at a high level.” But this venture “reaches far beyond six or so games a year.” UNLV football is “never going to move the city's economic needle in a substantial manner, but a stadium that seats 60,000 would generate through mega events hundreds of millions of dollars of new money annually” (LAS VEGAS REVIEW-JOURNAL, 9/12).
SNEAK PEEK: In Detroit, Mark Snyder reports the Univ. of Michigan “launched its new athletic development website and, in the process, provided the first public look at its $250-million vision of athletic projects over the next five years.” The most expensive project is “slated to be the $90-million track-and-field building renovation” (FREEP.com, 9/11).
GETTING UP TO CODE: In Memphis, Michael Sheffield notes the Liberty Bowl “still needs about $40 million in improvements to meet compliance with the Americans with Disabilities Act.” Those improvements include “access points and ramps, expanded and improved restrooms and other amenities.” There are “hopes that the improvements could at least partially be funded through a Tourism Development Zone that would help pay for the redevelopment of the Fairgrounds, as well as Overton Square” (MEMPHIS BUSINESS JOURNAL, 9/7 issue).
STAMP OF APPROVAL: The Univ. of Arkansas Board of Trustees on Friday approved the construction of three athletic related capital projects: a Student-Athlete Success Center, a basketball practice facility and a baseball and track indoor training facility. The projects will be funded entirely by athletic revenues, gifts, and bond proceeds from a future bond issue. No university funds will be required to complete the projects. A timeline for the projects has not been established and will be contingent on successful fundraising efforts. The total project cost of the Student-Athlete Success Center is currently estimated at $18-23M (Arkansas).
HOOP GAME: In Portland, Matthew Kish notes Portland State Univ. has “tipped off a $44 million effort to renovate its outdated basketball arena.” The renovation of the Peter W. Stott Center “will be funded by $20 million in donor gifts -- including a just-received $5 million anonymous donation -- and hopefully $24 million in state bonds.” With the $5M anonymous gift, PSU has “raised $8.1 million of the $20 million it hopes to raise from donors.” If the Legislature approves the school’s request for $24M in bond funding during its '13 session, construction "could begin as early as January 2014 and finish in November 2015” (PORTLAND BUSINESS JOURNAL, 9/7 issue).