A proposal for a new half-billion-dollar NBA and NHL arena in Sodo would include $200 million in city and county financing, but no new taxes.

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Calling it a historic day, a beaming Seattle Mayor Mike McGinn and King County Executive Dow Constantine on Thursday unveiled what they described as a risk-free proposal to build a half-billion-dollar arena that could bring NBA basketball back to Seattle and attract its first National Hockey League team.

Both officials said the arena could be built just south of Safeco Field with $290 million provided by private investors and $200 million in taxes generated by the arena, but that construction would not begin until the investors, led by San Francisco hedge-fund manager Chris Hansen, are able to secure both NBA and NHL teams.

“He’s not going to put his money in until he’s got a team, and we’re not going to put our money in until he’s put his money in,” Constantine said at a news conference that took on the air of a pep rally.

The packed City Hall room included hundreds of cheering sports fans, some dressed in the green and gold of the Seattle Sonics, who were moved to Oklahoma City in 2008.

McGinn and Constantine outlined an investment proposal that calls for no new taxes and, they said, shields the public from risk by requiring investors to make up any revenue shortfall. The deal also would put the teams on the hook for the public share if one of them left before 30 years.

“We got a really good prenup,” said Dwight Dively, King County budget director.

Constantine said the 18,000-seat arena in the Sodo neighborhood would have the third-highest private investment in a professional sports arena anywhere in the country.

“This proposal we’ve received is worthy of serious consideration,” he said, alluding to the close scrutiny — already voiced by Seattle City Council members — that will now be given to one of the most ambitious projects launched in recent history in Seattle.

Hansen, a 44-year-old Seattle native who lives in San Francisco, has agreed, along with partners he has not identified, to put forward at least $290 million to build the arena on land he has acquired south of the Safeco Field parking garage. He also would buy a professional basketball team, and recruit a hockey team.

The NBA has said it will not expand, making relocation the only means to acquire a franchise. Sacramento, Calif., is facing the loss of the Kings if it doesn’t produce a viable arena deal by March 1, and the fate of the financially troubled and league-owned New Orleans Hornets remains in question.

The NHL’s Phoenix Coyotes, which were taken over by the league, have been identified as the team most likely to relocate.

Both leagues have said they consider Seattle a desirable location.

Concerning overall prospects for his proposal, Hansen wrote in letter to the city, dated Wednesday, that he was “confident” his proposal would be “looked on favorably” by the NBA and NHL.

Hansen’s effort already has included discussions with both leagues, producing encouraging signs, according to a source close to the talks.

In an interview with The Seattle Times on Wednesday, Hansen cautioned that the overall proposal is complex and could still be derailed.

McGinn said Thursday he believes there is a pathway to attracting teams, but did not elaborate.

“On first look, this is an exciting proposal, and it could mean big things for our community,” said McGinn. “It could mean that the Seattle SuperSonics play once again in our city.”

Cautious reaction

Hansen, who visited Seattle this week to meet with City Council members and other officials, did not attend the news conference at City Hall. He said in the Wednesday interview that he didn’t plan to lobby the public and wanted the proposal to stand on its own merits.

The public’s investment would be capped at $200 million, likely in bonds, and would be repaid through rent paid by the teams and existing tax streams, including sales, property, admissions and business-and-occupation taxes generated by the arena. The city and county would own the arena and land and lease it back to the investors.

Team owners would collect revenue from ticket sales, luxury suites and concessions, and possibly from a cable-television network that would broadcast games.

City and county officials would work out how much of the $200 million in construction bonds would be financed by each, and both the city and county councils would have to approve the financing plan. A public vote would not be required.

McGinn and Constantine insisted that the project would be “self-funding” because it would be paid for with city and county tax money that would not be generated if the arena were never built.

City Council members were only briefed on the details shortly before the news conference, and have not been involved in the talks with Hansen or arena consultant Carl Hirsh, whom the mayor’s office hired in June.

Most offered a cautious reaction.

“Our job starts now,” said Councilmember Tim Burgess. “We’ve been asked to put up $200 million. What’s our debt capacity? What projects will the city have to forgo? We have a $1.8 billion backlog in deferred maintenance on streets and bridges.”

Councilmember Nick Licata, a strong critic of previous stadium deals that involved taxpayer funding, said Hansen’s investment group is very conscious of Initiative 91, overwhelmingly approved by city voters in 2006, that requires the city make a profit on any investment in a sports arena.

“My concern is that I want to make sure we do not impede our city services or our ability to provide critical infrastructure,” Licata said.

Councilmember Sally Bagshaw was skeptical about the investor guarantees of public funding, saying that the city had similar guarantees from the Sonics to play at KeyArena and a 30-year lease on the Kingdome, which was demolished after 24 years, leaving the taxpayers with the remaining debt.

“How can we ever be sure we’ll get our money back?” Bagshaw asked. She also questioned whether the city could support two new professional sports teams without eroding the audiences for those already here — the Seahawks, Mariners and Sounders — as well as those for college sports.

Public protected

McGinn and Constantine repeatedly stressed the ways the public was protected, including a security fund that could cover three years of debt payments. The investors also would have a fund for upgrades, so the city wouldn’t be responsible for fixing up the arena as it ages.

In addition, the private investors would take the risk and pay any shortfalls, while pumping money and construction jobs into a slow economy, they said.

Both officials wouldn’t speculate about what teams might be moved to Seattle, with McGinn noting he wasn’t in the “prediction business.”

But they spoke optimistically about the chances, saying Hansen would not have been willing to make such a large investment if he weren’t confident he could acquire an NBA team.

Construction of a new arena would take about two years, but both teams could play temporarily at KeyArena, which a city fact sheet characterized as “barely breaking even.”

NBA Commissioner David Stern already has said he would be open to using KeyArena as a temporary home, despite the league’s previous determination that it was unsuitable as permanent professional basketball arena, according to sources.

Hansen’s proposal includes money toward a study on how to revitalize the aging arena.

Seattle City Councilmember Bruce Harrell said he remains excited about the prospects of the NBA returning to Seattle and the NHL playing in a new arena. But he questioned whether the city has done a thorough economic analysis to determine what the effects two new teams could have on existing sports franchises.

Still, he sounded confident that a deal could be reached.

“Is this in the city’s best interest? I think it is.”

People familiar with the arena discussions say Seattle and King County might have to reach an agreement on financing a new arena quickly.

The NBA’s board of governors could vote on a new owner and a new location for Sacramento at their June meeting, said one source familiar with the investment proposal.

The next step here is a report from an arena review panel, appointed by McGinn and Constantine, that will scrutinize the proposal details and report back in March. It is co-chaired by Jan Drago, a former city and county council member; former Seattle Deputy Mayor Maud Daudon: and NBA Hall of Famer Lenny Wilkens, the Sonics coach when the team won the championship in 1979. Wilkens was the among those at City Hall watching the news conference Thursday.

Lynn Thompson: 206-464-8305 or lthompson@seattletimes.com.

Emily Heffter: 206-464-8246 or eheffter@seattletimes.com. On Twitter @EmilyHeffter.