BY Art Thiel 07:00AM 05/10/2015

Thiel: Heavy lift for Sodo arena seems too much

Seattle mayor Ed Murray’s demand for more private money for the Sodo arena is just one sign that the project may end up losing out to a new arena plan in Tukwila.

The Sodo arena plan by Chris Hansen has miles to go./ 360 Architects

If you’re a sports fan interested in the Sodo arena project and puzzled over the responses of Seattle mayor Ed Murray, you rightly ask yourself: What the hell . . .?

Happy to provide an answer. The mayor is engaged in an old game himself, a political one: Playing both sides against the middle. The middle, in this case, is arena developer Chris Hansen.

Hansen spent parts of the previous 21 months since the publication of the project’s draft environmental impact statement attempting to answer questions, explain better and improve upon the data and the investment he first supplied to get what he wanted Thursday: A figurative gold star. The final EIS said that the Sodo site was the better choice in the city than two alternative sites at Seattle Center, made so by the improvements.

The feat was properly celebrated by its advocates, and properly derided by its opponents. Weeks earlier Murray, who since succeeding arena supporter Mike McGinn was mostly non-committal, suddenly had become the biggest hockey fan since Don Cherry. In an interview with King5, Murray even played the gay card as a part of his rationale to support the project.

“I would love,” he said, “as the first gay mayor of a major city in the U.S., given the stereotypes, to be the mayor who brought home a basketball team and a hockey team.”

That has to be a municipal first: While it’s not acceptable to use sexual orientation against an elected official, it’s OK to use it for a capital construction project. Got it.

Anyway, that enthusiasm was nowhere to be found in Murray’s interview Thursday with the Seattle Times, in which he said Hansen and the supporters of an NHL-first revision to the arena plan have to come up a whole bunch more private money to get a majority of votes on the Seattle City Council.

“Folks have got to come up with a plan that’s viable for us to finalize this process,’’ Murray said. “The timeline you see for decisions on the arena are the timelines for when we either go forward, or we pull the plug.’’

Pull the plug? That’s the sort of rhetoric that comes from the unpersuaded. It also sends a signal to his allies on the council and among the electorate that his exuberant, first-gay-mayor-for-sports wasn’t, well, serious.

Yes, Murray wants to court sports fans, and yes, he wants to be loyal to the liberal, anti-corporate types who largely elected him. Sounds to me as if he’s meeting his obligations in the memorandum of understanding with Hansen, the middle man, and little more.

At the end of the Times story was buried the real tell-tale about Murray’s sentiments.

“Whether it’s the San Francisco 49ers playing outside of San Francisco in (Santa Clara) or the New England Patriots playing outside of Boston in the suburbs,” Murray said, “sometimes, that’s what happens.’’

Catalyst for that bomblet of ambivalence was provided in part by NHL fan Ray Bartoszek, a Greenwich, CN., investment banker and former oil trader, married to a Seattle native, who May 1 filed plans to build an arena in Tukwila and then own an NHL expansion team.

The site that his company purchased in August, about 15 minutes south of downtown, is immediately off exit 1 of Interstate 405, east of the West Valley Highway near the Sounder train station.

Bartoszek, 50, nearly bought the NHL Phoenix Coyotes in 2013 with plans to relocate the team to Seattle before politicians in Glendale, AZ., struck a deal to keep the team.

His revived interest in the NHL in this market has one great virtue: It’s privately funded.

Chris Hansen purchased property south of his proposed arena for a parking garage to improve chances for environmental approval. / FEIS

Bartoszek has watched for almost three years as Hansen’s request for up to $200 million in borrowing capacity from the city and King County, as well as the opposition to the plan from its neighbors, bogged down the Sodo project. Now, Bartoszek is offering full-on competition with Hansen’s plan that would seem to have high value for the city of Tukwila, home to Southcenter Mall and a welter of one-story warehouses.

The final environmental impact statement on the Sodo arena released Thursday estimated its annual economic impact would be $230 million to $286 million, based on 186 event dates per year. That’s sounds like a lot of money, but in Seattle, it’s another medium business. In a suburb, it would be a huge deal.

King County Executive Dow Constantine, who described the county as a “junior partner” with the city in the memorandum of understanding with Hansen, would be no partner at all with the 19,500-seat “Northwest Arena,” as Bartoszek calls his plan. But his constituents would be beneficiaries.

Asked Friday in a phone interview whether the plan might set up the county as a competitor against the Sodo plan, Constantine said it’s not an issue.

“They haven’t come to us to participate,” he said. “If they move forward, we will have to understand transportation impacts, but I won’t be making any choices. That is for the city of Tukwila. The main interest is in having Sonics back and bringing hockey to King County. The addition of the Tukwila proposal increases the opportunity to make those things happen.

“Our priority is to fulfill our obligations under the MOU for the Sodo site. That doesn’t mean we wouldn’t respond to another proposal.”

Murray’s demand for more private money was non-specific, but Constantine confirmed that the reason the MOU put basketball first was because the NBA had a 40-year track record in the city. Not only has the modern NHL never been here, franchise values have been significantly less than those of the NBA.

That’s important because in order to reduce risk to a city burned by the 2008 departure of the Sonics, Hansen in 2012 pledged the franchise value as collateral against a default by the team that would precede a move.

“The difference is in the collateral,” Constantine said. “There needs to be something more provided. I don’t know what that ‘more’ is, but the arrangement was done to hold the public risk to a minimum.”

An updated MOU that would put hockey first undoubtedly would reflect two developments new since 2o12: A collective bargaining agreement with the NHL players union that favored the owners, and increased revenues from television contracts in Canada and the U.S.

Forbes estimated that the average 2014 franchise value was a record $490 million, or more than enough collateral for the $120 million public obligation for a single team in the agreement with Hansen.

But even the lessened risk is unlikely to impress the City Council, which is ultimately the decider on accepting the FEIS recommendations, agreeing to vacate a part of Occidental Avenue and issuing a Master Use Permit to build the arena.

The liberal council since has since 2012 leaned even more left and is likely to run from anything labeled corporate welfare — particularly after Hansen’s one-time partner, Steve Ballmer, bought the Los Angeles Clippers for $2 billion cash, or about four times the cost to build the entire Sodo arena.

As Council president Tim Burgess told Danny Westneat of the Seattle Times, “If we’re going to do hockey, there would have to be a substantial lowering, if not elimination, of the public investment.”

Even if the council was persuaded to rewrite the MOU for hockey and issue a Master Use Permit (forecasted by Murray to be in September at the earliest), that’s when civilian opponents such as the Port of Seattle, the Mariners and the maritime trades people would re-enter the fray with litigation based on perceived inadequacies with the FEIS.

Peter Goldman, an environmental attorney who previously represented the ILWU longshore union in objecting to the Sodo project, said there is no need for opponents to act at this time when so much needs to be accomplished by Hansen before there is an actionable event.

“We may as well sit back and let it fall of its own weight,” he said.

Pull the plug and play in the ‘burbs? As Murray said, sometimes that’s what happens.

 


YourThoughts

  • Jamo57

    I’m to the point where I’ll be more than happy to spend my Snohomish County dollars in Tukwila rather than within the city limits of Seattle. Tukwila will mean more difficult access for us north of King County, as well as folks in Kitsap and Bainbridge Is., who would have been able to walk on the ferries and attend games. It will probably be decades before light rail can get us close to the arena and Sounder access from the north end won’t be in the cards either.

    The history of a lack of support for sports fans from the city of Seattle (one stadium went through the legislature, the other through a statewide vote) can’t be denied. And as such, I’ve come to avoid spending money in Seattle in other ways as well. It just feels better to keep my overall economic activity close to home whenever possible.

    And if Tukwila becomes unwieldy, perhaps I’ll just save my money and continue to watch hockey up in Everett or VBC where I’ve always felt welcome.

    • art thiel

      If we judge by the 2007 vote on I-91, Seattle voted 72-28 in favor of the law that was the last straw for Stern in his mad-on for Seattle.

      Sports fans tend to think everyone is a sports fan. It is decidedly not so.

      • Jamo57

        I don’t think everyone is a sports fan, far from it. I just try and be conscious of where I feel welcome and what my spending ultimately supports.

        And I also don’t buy the pandering when the same politicos turn around and go on the late night talks shows before the Super Bowl or ride along in the parades.

        • art thiel

          Did you feel welcome at Seattle Center?

          • Jamo57

            LOL. Well, not really. They didn’t seem to care if we were able to eat or not. ;-) And now I get annoying emails from Seattle Center to boot.

            More seriously though, my son and I are season ticket holders for UW football so it’s not like I “boycott Seattle”. However thought is always made as to where I want to do business, so if the kickoff isn’t at some sort of God-awful hour for TV purposes, I might suggest we eat in Snohomish County before or after the game. If we are put through hoops by the network and are famished by the time the Metro bus deposits us in Northgate, we’ll eat there. It’s all cost/benefit analysis.

            It’s not so much about supporting the businesses along the way, it’s keeping in mind the tax and fee revenue that goes along with our visit benefits the local governments of which we visit. So, I prefer to “shop local” in my community as often as possible. And as such, City of Seattle and a much of their citizenry doesn’t appear to appreciate our visit. So why pay into their public tax base and by connection public programs?

            Sorry, Art. I was an Economics major.

            Oh, and mindful spending is why I support independent media like SPNW but not the Seattle Times. ;-)

          • art thiel

            Jamo, you’re certainly entitled to spend how you see fit. When it works, my choice is to buy local too.

            And thank you for your help in keep independent media going. Please tell your friends.

    • MarkS

      As a Snohomish County resident myself I’d be less inclined to spend money if the arena is in Tukwila. Any weekday game would be a nightmare to get to. At least there are somewhat viable transportation options to get to SoDo.

      Many other north enders I’ve spoke to share that point of view.

      • Jamo57

        I completely agree. SoDo is the transportation hub for the overall Puget Sound region and works best for the greatest percentage of residents. In my case, I suspect only weekend games are in the offing.

        Having said all that, it appears that SoDo probably won’t be happening (hence Art’s column). Given the option of no arena or Tukwila, I am more than willing to support the Tukwila option (though I liked the United Grocers warehouse location better as light rail goes right by that parcel and there is construction plans in place to connect Lynnwood all the way to that location).

        And as I said above, the inconvenience will be offset with the satisfaction of visiting a community that seems to want us to come.

      • art thiel

        I’m sure it would be a chore from the north end. But many eastsiders hated the rush hour drive across the bridges to get to the Seattle Center. And they were the bulk of Sonic season ticket holders.

        But a Tukwila site may draw more from Pierce County.

        Any location will put out some geographic constituency.

        • Jamo57

          True, but a vast majority of the Sound Transit express buses travel to SoDo from the south and north ends and eastside. True, a transfer from one to another might work, but a late night return trip home would be daunting with a transfer involved.

  • RadioGuy

    Well-written piece, Art. Bartoszek’s proposal has been a real game-changer. What taxpayer (let alone the politicians they vote for) wouldn’t welcome a new sports facility that doesn’t require public subsidies to build? Murray’s stance is as safe as it is predictable.

    I do have a question that I hadn’t thought of: If a franchise’s “value” is collateral against the building, would that mean the franchise becomes publicly-held if Hansen defaults? That can’t be right because no modern major sports league would ever allow one of their teams to be placed within sniffing distance of a deal like that, but how does it work?

    At any rate, I’m in favor of the Tukwila proposal because it’s all on Bartoszek and his partners to fund it and their goal is the NHL. What does Seattle owe the NBA and Commissioner Skeletor beyond a collective middle finger?

    • art thiel

      If a team defaults and leaves, it remains the property of the owner, who is obligated in this deal to pay the balance remaining on the construction bond debt.

      Bartoszek certainly will be a favorite of the pols, but his financials have yet to be vetted. Don’t stand in line in Tukwila yet.

      • RadioGuy

        Think I got it on the collateral, assuming Bartoszek’s group owns both the team and the arena.

        And I agree about Bartoszek himself. He’s the flavor of the month right now, but who else is in his group? How much wealth do they represent? How much of that wealth are they willing to actually COMMIT for an arena and a hockey team, since you’re talking up to $1 billion for both? What’s going to happen if/when the Tukwila site goes through the EIS process and how long will that take? Lots more questions than answers yet.

        Hansen’s taken some pretty major hits (especially the exit of Ballmer and his billions), but he’s the established player here, for better or worse. Bartoszek has to provide more then rhetoric.

        • art thiel

          He’s picked a town and a spot that’s much easier to execute on. But you’re right; much awaits full disclosure.

  • Sub 4.0

    As a sports fan who lives south of Seattle, I would much rather attend NHL and NBA games in Tukwila. For me the benefits are twofold; I won’t have to drive in the horrific Seattle traffic, and most importantly, I won’t have to listen to whiny-assed, liberal Seattle politicians, gay or not, deride bringing the NHL and NBA to the Northwest.

    • art thiel

      Hah! Thinking you can escape traffic and whining . . . hah!

  • PokeyPuffy

    alright i thought it was a made up word, but no. “WELTER: a large number of items in no order; a confused mass.”

    • art thiel

      It’s always a good day when you learn something.

  • jafabian

    Much ado about nothing to me. If an arena is built in Tukwila I believe the NBA would claim that Tukwila is not an area they want an NBA facility to be in, that were they consulted they would have recommended Seattle. Never mind that for years the Lakers played in Inglewood and that the Pistons are in Auburn Hills. However majority of the NBA teams play in their host city. It’s not about what’s best for Seattle fans, it’s about selling the Seattle market to the NBA. Building an arena to NBA specs and believing that will lure the NBA back is a fool’s dream. The NBA does what it wants. Only billions of dollars can get their attention.

    Build it for hockey. If the NBA comes here, great. If not c’est la vie. But only for hockey if they’re willing to play in the Key until the new arena is complete. I don’t want an empty, state of the art arena sitting in Seattle and hanging on taxpayers like what’s going on in Kansas City.

    • art thiel

      Any arena built for hockey will accommodate hoops, so there’s no issue of either/or.

  • notaboomer

    at least we can watch steve ballmer celebrate with the clippers on the tvs at the fun forest by the space needle. oh wait, i mean at the chihuly glass abomination. oh wait, i don’t think there’s any tvs at the glass house. well we can sip chardonnay with the local pols and celebs at the glassblow and check the score on our digital leashes. cheers, modern world!

    • art thiel

      You forgot to pull your pants up to your armpits and complain about the gummint.

      • notaboomer

        get off my lawn!

  • Justin Van Eaton

    My first thought was if Bartoszek and the others involved in the Tukwila plan had been vetted financially. While they may have the money to build an arena, until I see something that proves it, to me it is just as much pie in the sky as the Dave Brown proposed Arena built on the pier (a super cool idea that would never have made it past the politicos).
    Second, to those who don’t think the public should have to subsidize an arena, the Hansen plan isn’t technically subsidized by tax dollars, but uses the city’s borrowing ability to procure a loan at a low rate, and is paid back in full. There is certainly some risk in that, but it’s not the same as the taxpayer actually paying an added tax such as helped fund the Mariner’s and Seahawk’s stadiums. And, if the city is receiving tax revenue from the stadium and the businesses that would likely move into the surrounding area, then I see no problem having the public fund some portion of it. I think if you are going to benefit from it, then having some investment is reasonable.

    • art thiel

      Hansen designed his pitch with the lightest possible touch, which you described accurately. It isn’t a tax subsidy; it is use of the city’s less expensive bonding capacity. But that is still public participation. Arena opponents will claim it reduces the city’s capacity to loan for other projects.

      I think it’s an enlightened approach, but to many on the council, no means no.

      Regarding Bartoszek, I am unaware if he’s been vetted. Caution advised.