Share story

A second lawsuit has been filed to block the city of Seattle and King County from carrying out a plan with the Chris Hansen-led investor group to help finance a $490 million Sodo sports arena.

The suit, filed in King County Superior Court, alleges the arrangement, which calls for $200 million in public money to be repaid through arena revenue, violates the terms of Initiative 91. The measure, overwhelmingly approved by Seattle voters in 2006, said the city must make a profit on any investment in a sports facility.

The plan, the lawsuit says, “lacks fair value” because most of the sums to be repaid represent unsecured future cash revenue or interest repayment that is not allowed under the initiative.

“We think there is a massive shortfall in fair value because you can’t count the unsecured future cash,” said Seattle attorney Cleveland Stockmeyer, who filed the suit Friday on behalf of Mark Baerwaldt, a drafter and sponsor of I-91, and three other Seattle residents labeled respectively as a taxpayer, a Sounder train conductor and a railroad switchman who serves as a United Transportation Union leader.

This week, save 90% on digital access.

Stockmeyer filed an amended complaint Tuesday, adding Hansen as a defendant and an additional Seattle resident as a plaintiff.

He also added a claim that the agreement violates a state constitution provision prohibiting local governments from giving or loaning public money to a private company.

Kimberly Mills, spokeswoman for the City Attorney’s Office, said Tuesday that her office has yet to be served with the suit and would defer comment until it is reviewed and discussed with the City Council.

The lawsuit follows another suit brought earlier by the longshore workers union to void the arena deal on the grounds that the city and county illegally reached an agreement with Hansen before the completion of an environmental-impact statement on issues such as freight mobility and alternative locations.

Arguments in that case are to be heard Feb. 22 in King County Superior Court.

The new lawsuit alleges that part of the plan — to repay public money through $1 million in annual rent — falls far below market rates for a $490 million structure.

In addition, the rent payment, along with arena taxes, will only repay the public debts with the city making no profit, the suit contends.

Stockmeyer said Hansen’s personal guarantee to cover annual debt payments covers only five years.

Overall, Stockmeyer said, the deal amounts to an “unsecured construction loan” that he described as a “massive, risky giveaway.”

Investors are not being required to provide real security such as separate property, real estate, an irrevocable letter of credit or a cash bond, he said.

The suit alleges there is “no real security for this immense revenue stream” to be repaid over 30 to 50 years. While Hansen has said the land is worth $50 million, it is worth less and far below the public debt, the suit claims.

At the end of the agreement, the city would own the land and arena but could end up with a facility that is “aged and likely without substantial value,” much like KeyArena, the suit says.

“We already have a basketball stadium that is a white elephant,” Stockmeyer said.

Seattle Times news researcher Miyoko Wolf contributed to this story, which contains information from Times archives.

Steve Miletich: 206-464-3302 or

Custom-curated news highlights, delivered weekday mornings.