There are specific questions I would ask Sodo arena proponent Chris Hansen if interviewing him. The biggest surrounds why he is asking the city to grant him a shovel-ready arena plan when he lacks the financing to execute his vision.
Inside sports business
Sodo arena proponent Chris Hansen flew into town last week and made the local media rounds, as he does every year or so.
And last Monday, I resubmitted my standing interview request to Hansen’s local representative, Rollin Fatland, when we crossed paths at a meeting of the Seattle Uptown Alliance. As he has since my first interview request in May 2014 — shortly after being assigned the arena story — Hansen did not respond.
Getting declined for interviews is part of the job.
That said, there are specific questions I’d ask Hansen if interviewing him.
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The biggest surrounds why he is asking the city to grant him a “shovel-ready” arena plan when he lacks the financing to execute his vision. Remember, Hansen wants to own both the arena and NBA team that would play there.
That’s at least a $1.5 billion proposition and likely more. And Hansen’s group, by his own admission, can’t afford it without additional investors.
To be fair, some have asked Hansen in interviews why he wants a “shovel-ready” arena. And some have asked separate questions about whether he plans to add investors.
Hansen says he needs to be sold part of Occidental Avenue South to be “shovel ready” in case NBA teams become available. He has said he plans to eventually take on new investors, and that getting them will be a snap compared with actually securing teams.
That raises the obvious follow-up question: If getting those new investors is so simple, why not take them on now? After all, that would give Hansen’s group a more formidable look as he pitches the city and NBA for things they have been reluctant to give him.
Having billionaire Steve Ballmer leave his group to buy the Los Angeles Clippers in 2014 hasn’t helped. After nearly three years of being asked about Ballmer replacements, Hansen has produced only Seahawks quarterback Russell Wilson — likely more for name value than money.
That has caused skittishness for city politicians who keep hearing from the NBA that expansion isn’t close. City-council members voted down Hansen’s initial request for Occidental in May, citing no available teams.
They noted NBA commissioner Adam Silver didn’t help Hansen’s cause by stating just 11 days before the vote that expansion wasn’t imminent. And they were right to be concerned, since, nearly a year later, Silver and NBA owners such as the Dallas Mavericks’ Mark Cuban say expansion isn’t being discussed.
In other words, the urgency Hansen says exists and justifies a “shovel-ready” plan as soon as possible isn’t supported by anything.
Thus it’s fair to ask whether Hansen wants Occidental because he believes expansion is right around the corner. Or does he plan to use “shovel-ready” status to lure additional investors he has yet to secure?
That’s no small question. And it’s on the minds of city officials who keep questioning why they should give Hansen anything.
Sports developers typically have financing lined up when asking cities for public assets such as streets. Cities typically aren’t in the business of helping private entrepreneurs attract missing investors.
The city is reluctant to tie up Occidental and — more important — the surrounding Sodo neighborhood for years while Hansen chases teams not available. Even if he doesn’t build anything until getting teams, conditionally vacating Occidental puts area businesses and industry in a state of indefinite planning limbo as they wait on whether an 18,000-seat arena will be plunked down in their midst.
So, yes, I’d ask Hansen why he doesn’t just line up new financing right now to ease such concerns. After all, he says it won’t be a problem. And playing things his way has yet to work.
After that, I’d ask Hansen about the Fortune magazine story published about his Valiant Capital Partners hedge fund a week after the May city-council vote. The New York-based story was about Valiant inflating its assets — and understating financial losses — compared with how other hedge funds valued those same holdings.
Next, I’d ask about the Reuters report from 12 months ago that Hansen’s fund was taking on fresh capital for the first time since 2012 to offset investors cashing out of it. Finally, I’d ask about last month’s Institutional Investor story stating the fund lost more than 10 percent from November through December to finish the year in the red for only the second time in its existence.
To be clear, hedge funds can mostly value assets however they like. There’s also nothing nefarious about taking on new cash or declaring losses.
But all three stories, part of the public record, speak to Hansen’s financial capacity and should be part of any interview.
The NBA, for starters, cares deeply about the financial capacity of future owners. If the league opens an expansion process tomorrow, Hansen’s investor-group makeup and financial status would be the first things reviewed.
So, answering such questions by showing he can secure needed project financing right now probably would take Hansen further.
It might get him Occidental by convincing city officials he isn’t using them just to lure investors. It also might also convince the NBA to actually award Hansen a franchise down the road once expansion becomes a league priority.