The citizens panel reviewing the proposal for a $490 million sports arena in Seattle's Sodo District says it's a good plan, but there are many questions about financing and traffic to be sorted out.

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The citizens panel charged with reviewing the proposal for a $490 million sports arena in Seattle’s Sodo District told Seattle and King County leaders Wednesday to go forward with the plan, while also cautioning that many important questions about financing and traffic remain unanswered.

“This is an unprecedented opportunity to bring two professional sports teams back to Seattle,” said Greg Smith, a Seattle developer and member of the Arena Review Panel, commenting on plans to bring back professional basketball and to recruit an NHL team to Seattle.

“We should ask how to make this happen, not say why it shouldn’t happen,” he said.

The panel delivered its final report before a City Hall audience of about 50 that included a half-dozen fans in Sonics green and gold. The report noted that the proposal by investor Chris Hansen to contribute $290 million to a new sports and entertainment venue includes many guarantees to protect the public from financial risk.

But the panel also concluded that a public investment of $200 million in construction bonds ultimately would be backed only by the resources and credit of taxpayers, in the event Hansen were to default or declare bankruptcy.

“Make no mistake: There are a lot of hurdles to be overcome,” said Jan Drago, former Seattle city councilwoman and co-chairwoman of the panel.

Former Sonics coach Lenny Wilkens called Hansen’s proposal an “unprecedented” public-private partnership and said the deal differs markedly from that between Seattle and the Sonics, who were sold and in 2008 moved to Oklahoma City.

“It looks very promising, it looks good, but there are still things that have to be checked out,” said Wilkens, who co-chaired the panel.

The report now goes to Seattle Mayor Mike McGinn and King County Executive Dow Constantine. The two will draft a memorandum of understanding with Hansen that will be subject to review and approval by the city and county councils.

Hansen has asked that the agreement be finalized by June so he can take it to the NBA Board of Governors and negotiate to purchase a team. His business plan also includes attracting an NHL franchise to the arena.

Among the challenges cited by the panel’s report are the risks to freight mobility and traffic in the Sodo neighborhood.

The Seattle Mariners this week said having two more professional sports teams near Safeco and CenturyLink fields would create scheduling, traffic and parking problems that would require hundreds of millions of dollars to mitigate.

The Mariners’ concerns echoed those of the Port of Seattle and the local maritime industry, which also weighed in this week, pointing out that the city’s promises to build two more overpasses in conjunction with construction of the two existing stadiums were never delivered.

David Freiboth, executive secretary of the King County Labor Council and a panel member, said concerns about freight mobility existed before Hansen’s proposal and must be addressed if the city and county move forward. He said a second overpass at South Lander Street has been designed but lacks funding, estimated at about $180 million.

“This can be a win-win. We can maintain a vibrant entertainment district and a healthy maritime industry,” Freiboth said.

The Mariners’ suggestion that Hansen look for a new location for the arena such as Bellevue or Renton appeared to be a non-starter with panel members.

Drago, who formerly chaired the Seattle City Council’s land-use committee, noted the arena is proposed for an area already zoned for stadiums.

“One goal of zoning is predictability. It’s a stadium district. I don’t think there’s any other place in the city it could go,” Drago said.

The panel said that the intent of Hansen’s proposal was to protect the city and county from financial risk through a series of safeguards. The public bonds would be repaid through taxes generated by the arena and through rent paid by the investor group. No new taxes would be imposed.

Hansen would be required to build up a security reserve, equal to three years of debt payments on the building. He also would be required to make up any shortfall in the tax revenues and rent. Additionally, both teams based at the arena would be required to agree to a 30-year non-relocation clause.

The city’s financial expert who advised the panel cautioned that the financial strength of the investment group and its business plan haven’t been examined.

“There’s a lot to like in this proposal,” said Maud Daudon, CEO of Seattle Northwest Securities. But she and the panel also recommended the city and county ask for an independent, third-party review of the investors’ finances and business plan.

Daudon said the city and county must write the financial guarantees into a contract that is legally binding for 30 years.

Sung Yang, chief of staff for Constantine, said the panel’s report would guide the development of an agreement between the city, county and Hansen, the next step toward construction of an arena.

“Hopefully, we’ll all be at the opening night of the return of the NBA,” he said.

Lynn Thompson: 206-909-7580 or lthompson@seattletimes.com. On Twitter @lthompsontimes.