BY Art Thiel 07:09PM 07/17/2015

No Sodo bid for NHL expansion; Tukwila in play

A report citing three unnamed sources said that Victor Coleman, eager to land an NHL expansion franchise for Chris Hansen’s Sodo arena project, will not submit an application by Monday’s deadline imposed by the league for interested cities. But another source told Sportspress Northwest that a rival plan for an arena in Tukwila will be submitted.

According to KING5, Coleman, a Los Angeles businessman and Vancouver, B.C., native, hasn’t reached agreement with Hansen on the nature of a potential partnership that would have Coleman own the NHL team while sharing in the arena construction costs.

The roadblock may be that Hansen is reluctant to change the memorandum of understanding he has with the city and King County if it would increase the risk to him or the city, should the MOU be changed to allow hockey first ahead of the NBA, which shows no desire to return to Seattle.

In a May 27 interview with the Associated Press in Seattle, Hansen said regarding his discussion with Coleman: “We’ve taken a very simple approach: Don’t make it worse for us and don’t make it worse for the city and use your own creativity and just come back to us with something that is fair and we don’t have anything back yet.”

Hansen’s arena offer, agreed to in 2012, is generally considered the most city-friendly sports venue project in Seattle’s modern history. His principal ask is for $120 million via the city’s cheaper borrowing capacity, not a tax subsidy or a tax re-direction. The money would be repaid out of arena operating revenue.

Coleman has not spoken publicly about his problems with the potential partnership. The absence of a deal makes it plain no resolution is imminent, especially in view of the NHL’s demand for an application fee of $10 million, $2 million of which is nonrefundable. Coleman presumably doesn’t want to take the risk.

Ray Bartoszek, the Connecticut investment banker behind the Tukwila project, has no problem with government money, since his project is all privately funded. There’s been no indication yet whether he has individual partners or a development deal with a large company such as Anschutz Entertainment Group.

Both parties likely have been taken aback by NHL Commissioner Gary Bettman’s insistence that an expansion fee of $500 million will be required. That makes an arena deal much harder to get to break-even.

Two cities with arenas under construction, Las Vegas and Quebec City, reportedly have submitted bids for what is likely to be a two-team expansion in time for the 2017-18 season.

But because the Monday deadline may be missed doesn’t necessarily mean there’s no hope. The NHL can table the bid process, and restart it later, or just call it Part Two.

The NHL will always need an empty market such as Seattle to extort municipalities with a relocation threat, as the NBA did last week in Milwaukee in order to get a deal from the Wisconsin legislature for $250 million in tax money.

But at some point, in the cases of franchises in Florida and Arizona, which have lost millions annually for years, the NHL may be forced to relocate them, by which time Seattle may have resolved its arena situation.


YourThoughts

  • jafabian

    Hansen needs to rethink how he’s handling his part in all this. Just how realistic is it for the NBA to be here in the next 3-5 years? About as realistic as the NFL being in Los Angeles IMO and look how long they’ve been out of that market. His stubbornness is delaying the NHL coming to Seattle and if he isn’t careful Coleman might leave him for a better partnership with Bartoszek and where would that leave Hansen? Can he afford losing Coleman to Bartoszek after losing Ballmer as a partner for an NBA team? Also, I believe the NBA wants an arena to be in Seattle whereas the NHL has no such compunctions. If they did the Coyotes would be in Phoenix. (And just how is Glendale working out?) If an arena is built in Tukwila Hansen can forget any sort of city of state assistance in his arena being completed. I don’t see the city/county/state being supportive of a hockey AND a basketball arena for pro sports ventures.

    • art thiel

      Both leagues prefer an urban location, but Seattle’s ever more dense and constrained downtown make it harder for the Sodo location. And don’t lose track of the fact that NHL is unproven here.

      • R Suico

        Not worried about the NHL. The region supports 2 major junior hockey teams that combined get in excess of 10K per game and have done so since the 70s. They’ll easily be able to get 18K for hockey even if it is Tukwila with South Sound with the majority of ticket holders.

        Remember the the Sonics at the Tacoma Dome? Not exactly a failure.

        • art thiel

          You’re missing a key point. I’m guessing average seats will cost $175-$200. Nosebleed will be $50. I know we’re a relatively wealthy marketplace, but after the first year or two . . .

          • Jamo57

            Those prices sound appropriate for the Canadian franchises. The average price for a US franchise is lower. I would imagine Seattle might come in somewhere in between. The NHL sure seems to think we’re affluent given the expansion fees.

        • MarkS

          The Everett Silvertips were founded in 2003 so there hasn’t been two teams in the Puget Sound region since the 1970′s.

          Art’s right per the cost of tickets. I attended the 2008 NHL preseason game in Everett between the Phoenix Coyotes and the Tampa Lightning. The cheapest tickets for that game were $60.

  • Howard Wells

    “at SOME point”…”MAY have to relocate” that sums up the chances of ANY arena getting built in the Seattle area.

    • art thiel

      It’s a hard, expensive lift for a sport unproven in this busy market.

      • Howard Wells

        so true Art…I guess I’m a pie in the sky dreamer with a pessimistic end game hehe

      • Count to 10

        Hey Art, I know you are just trying to add a healthy level of realistic expectation to some of the wildly optimistic views of how successful Hockey will be here. I just want to point out that Soccer wasn’t really proven in the market either and they get a great turnout. A few factors led to this: it’s a relatively inexpensive ticket, it’s a popular world sport and we have a lot of people here from around the world, the team did a great job involving fans early and building a following, the team has been successful, and there has been significant participation in recreational soccer groups here for many years before the MLS Sounders. I think many of these are parallel for Hockey. We have one of the largest rec hockey leagues in the country, a population familiar with the sport because of the junior league teams and lots of people from hockey markets (Canada, Minnesota, Michigan and the North East). The tickets are more expensive but you don’t need to sell nearly as many to fill the arena. I think if we get a team and the ownership group is able to build a buzz and then make them competitive or at least show steady improvement in the first 3-5 years they’ll be fine. Especially if the NBA doesn’t arrive in town until at least year 5 and they don’t have additional competition for the fan dollar. Certainly not saying it’s a slam dunk but there are a lot of positive indicators.

        • art thiel

          Good response, Count. I appreciate the fact that you understand the distinction between journalist and cheerleader, and where I land on that spectrum.

          I do think Seattle’s NASL period was a strong indicator of the marketplace, as was the huge junior soccer programs of the 1970s and 80s that are still rolling today. The other factor that helps soccer is a hard, low salary cap and that MLS is a single-entity operation that precludes the assisted suicide problems of the NASL ownerships.

          The NHL is not on the same solid ground as other leagues, owing to the relatively small U.S. TV rights fees. They have to make up a lot at the gate, concessions, parking, etc. That’s why the NHL is desperate to beat the NBA to Seattle. This market may not be big enough to support two pro winter teams.

          Not saying they can’t or won’t, but analogies get tougher to make the closer one looks at NHL financials.

          • Count to 10

            Thanks for the additional background info! It’s good stuff. The NHL getting here before the NBA and having a few years as the sole winter sport I think gives them the best chance to get established. As with all things we won’t know how things work out till we get there. I’m just hoping we get the chance to find out sooner rather than later.

  • Jamo57

    Well if it’s Tukwila, so be it. As a Snohomish County resident, I’m thinking we’d probably limit our attendance to weekends. Unfortunately I don’t see that location being on a light rail line in the next 30 years or so and the idea that it can be accessed by the Sounder isn’t as simple as people try to make it out to be, particularly for north-enders. Too bad that United/Associated Grocers Warehouse parcel didn’t go anywhere. The LLR already goes by across a major arterial. Adding a station and a foot bridge would be all that would be needed.

    • art thiel

      Don’t start plotting your travel yet. Lots of things still in play that are little-known, including the Tukwila partners, if any.

      • Jamo57

        Yeah, travel might include Quebec City and Las Vegas…….

  • Topcatone

    Traffic mandates that the arena be in SODO. With our horrendous traffic, and getting worse, it MUST be by mass transit. Can you imagine all the fans in Seattle and north to get down I-5 to a weeknight game in Tukwila? Not going to happen. Anyway, it needs to be near Macrina Bakery :)

    • art thiel

      Mass transit: Always a great idea as long as others do it.

      Macrina can open a shop in Southcenter Mall.