SBD/September 12, 2012/Facilities

From City Officials To Fans, New Seattle Arena Deal Earns Praise

Hansen's agreement with Seattle's City Council for a new arena has drawn praise
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).
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