By going all-private, Hansen would eliminate the need to acquire an NBA team within a specific time period. His Memorandum of Understanding (MOU) with the city and county had required the team to be in hand by November 2017.
A dramatic twist Tuesday in the Seattle arena saga saw entrepreneur Chris Hansen offer to fund the more than $500 million project with completely private money.
Proponents hailed the move as a potential game-changer in getting the arena built. But opponents, including the Port of Seattle and a major maritime union, say it won’t help future traffic congestion in the Sodo District and still threatens freight mobility and jobs.
“It doesn’t change a thing,’’ Port of Seattle Commissioner John Creighton said.
What Chris Hansen has pledged
• Private financing of a proposed arena project
• Money for a Lander Street overpass that could ease Sodo traffic congestion
• Other “freight and mobility improvements” in Sodo
What Hansen’s groupseeks
• A vote by the Seattle City Council to give up part of Occidental Avenue South
• A waiver of Seattle’s admissions tax for the arena
• Adjustment of the city’s business-and-occupation tax rate
• An NBA team. Private arena funding would eliminate the need to acquire a team before his agreement with the city and county expires in November 2017.
But it isn’t the Port’s mind Hansen must sway. His group needs to prod the Seattle City Council into changing its mind and giving him part of Occidental Avenue South for the arena, and Hansen viewed forgoing up to $200 million in municipal-bond funding as a necessary step toward that deal.
The council voted 5-4 last May against approving a sale of the street to Hansen for a market-value amount of $18 million to $20 million.
“The goal of this partnership was to build the Arena and bring an NBA team to Seattle,’’ states a letter Tuesday from Hansen’s group to Mayor Ed Murray, the council and King County Executive Dow Constantine. “Public financing was simply a mechanism that made that possible at the time. We have concluded that a changed economic climate makes possible the private financing of the arena.’’
The letter was signed by Hansen and his partners, Wally Walker and Peter and Erik Nordstrom. It’s not clear if they have the money, leaving questions about how the group would pay for an arena and teams, and no new investors were announced by the group Tuesday.
Going all private would eliminate the Memorandum of Understanding (MOU) among Hansen, the city and King County — spelling out the terms to build an arena using municipal bond funding — and allow the entrepreneur to pursue NBA and NHL teams within his time frame.
Under the MOU, Hansen first had to acquire an NBA franchise before the deal’s November 2017 expiration. The league reportedly is close to a new seven-year collective-bargaining agreement with its players, and it’s believed an expansion process could follow as quickly as next summer.
That makes it unlikely Hansen would land a team before the MOU deadline. By using private funds for an arena expected to cost well beyond the initial $490 million estimates, Hansen could wait out any expansion process.
Hansen’s partner, Walker, told The Associated Press on Tuesday: “Once we got through to the other side of the street vacation vote going unexpectedly, I think we stepped back rationally to look at what we could do … so one, it could be passed, and two, meet the needs of the constituencies. We won’t meet all needs, but this is a great deal for the community.’’
Hansen would also be free to pursue an NHL franchise before the NBA. The NHL recently announced plans to expand to Las Vegas, where an all-private arena is being built, but is now at only 31 teams and would like one more Western-based franchise to even out its two conferences.
Jeff Marks, a spokesman for Los Angeles real-estate magnate Victor Coleman — who had looked to reach a deal with Hansen to bring an NHL expansion team to play at a Sodo arena — said Coleman had no comment on Tuesday’s developments.
The price tag for an NHL expansion team was set last summer at $500 million. An NBA expansion franchise is expected to cost in excess of $1 billion.
Hansen’s group does plan to seek a new Occidental Avenue vote by the council. The city’s vacating the street is the main condition of the group’s moving ahead with all-private funding.
Beyond that, the letter says Hansen’s group will commit the money it had earmarked to paying for Occidental Avenue South toward the building of a Lander Street overpass to ease Sodo traffic.
Hansen’s spokesman, Rollin Fatland, confirmed that the money for the overpass would come from the $18 million to $20 million Hansen already had pledged last spring to pay for the street.
The money would get government officials within $10 million of completing the overpass. Hansen’s letter says he’d make “direct contributions’’ to other potential traffic and freight-mobility improvements in the district.
Besides the street — which runs directly through the proposed arena site — Hansen’s group seeks a waiver of the city’s admissions tax, already done for Seattle’s other pro teams. It also wants the city to adjust its business-and-occupancy tax for “revenue generated out of town.’’
Port Commissioner Creighton said he can’t see why the council would give up the street now.
“When 51 state legislators went on record opposing the street vacation, when the council voted against the street vacation, they did not oppose it because of the public-financing issue,’’ he said. “They opposed it because of what it does, in putting at risk tens of thousands of maritime, industrial and trade jobs.’’
John Persak, district president of the International Longshore and Warehouse Union, said using the Occidental sale funds to finance a Lander Street overpass amounts to little. Persak noted the overpass was supposed to be built a decade ago to ease congestion caused by Safeco Field.
Now, with Hansen planning additional commercial development around the arena site, Persak says there will be far more traffic disruption added to Sodo than the overpass can help fix.
“If you’re going to take a smaller problem and create a bigger problem, that’s a net loss,’’ he said.
For now, Hansen, who has spent $67 million in the past month buying up additional Sodo land, appears back in the arena game.
None of the five City Council members who voted against Hansen’s street request last May responded Tuesday to requests for comment. For Hansen to succeed, he must flip at least one vote.
Beyond the public funding, council members were concerned about giving up Occidental before Hansen demonstrated he could land a team. They also were concerned about KeyArena’s future and whether the city should explore renovating that facility instead of building a new one.
Mayor Murray issued a statement Tuesday: “We share the goal of bringing the NBA and NHL to Seattle. The city will continue to consider all options to build a new, state of the art arena that will accomplish that goal and that can serve the city for years to come.’’