BY Art Thiel 06:30AM 09/28/2016

What a new Hansen proposal might look like

Disclosure last week of Chris Hansen’s final purchase of land for his dormant Sodo Arena project wasn’t a big deal in itself. But it helps illuminate a way forward for a plan different than the five-year-old MOU.

The cover sllde of the Seattle Arena plan presented to the City Council in May.

The Seattle sports world pauses a moment in its fascination with the World’s Most Inspected Man, Seahawks quarterback Russell Wilson, to consider another battle-weary sports figure, Chris Hansen. He, too, is sore but game.

Hansen’s five-year pursuit of an arena for the return of the NBA, or the welcome of the NHL, was presumed dead after the Seattle native and hedge fund manager lost in May a 5-4 vote by the Seattle City Council to reject a proposal to vacate part of a street in Sodo to accommodate the arena.

But as Billy Crystal’s character, Miracle Max, observed in the film Princess Bride, “There’s a big difference between mostly dead and all dead.”

The corpse seemed to pop to life last week with the news that Hansen purchased for $32 million — about three times its assessed worth — the remaining five acres for the project.

The Seattle Times ran with a “full steam ahead” headline on the story, based on a quote from Bill Vipond, a longtime Seattle real estate consultant hired by Hansen:

“I’ve never gotten any direction (from Hansen) other than full steam ahead, we’re bringing the Sonics back. The general directive is, ‘Let’s go, let’s get the Sonics back, let’s keep working on getting the team.’ ”

But as it turned out, the purchase long has been part of the plan. Hansen included the land in his original presentation to the council years ago. He’s held an option on the property for more than three years, and merely wrote the check now ahead of the option’s expiration next year.

But the news story startled the council sufficiently that Hansen passed the word that nothing had changed.

Yet.

Council member Tim Burgess, who chairs the affordable housing, neighborhoods and finance committee, said in a phone interview last week that neither he nor the central staff have been contacted about an alternative proposal. Which doesn’t mean that a quiet, what-would-you-do-if conversation hasn’t taken place.

Burgess, who voted to approve the street vacation, re-addressed a point he made months ago that has been lost after the council vote and in-your-face lobbying effort by the arena’s chief opponent, the Port of Seattle.

“If (Hansen) were to submit a proposal that substantially reduces or eliminates the public share, I think that would be worth considering,” Burgess said.

Burgess was referring to the part of Hansen’s proposal that sought up to $200 million for arena construction, using the city’s capacity to borrow money at much cheaper interest rates than a private developer. Hansen asked for no new taxes nor a diversion of current taxes, but a loan to be paid back out of 30 years of arena operations.

Light as was the touch on the public exchequer compared to previous Seattle sports-venue deals, opponents of any public subsidy marshaled forces in preparation for a yes vote by the council.

Had the street vacation been approved, the already busy city discourse would be filled with briefs, motions, injunctions and public charges and counter-charges, producing a dreary litigiousness over the arena proposal that likely would have consumed years.

The public finance request likely was a bigger deal to the council that the port’s lament over potential traffic congestion from the arena.

At every arena hearing, the port offered up  employees who claimed imminent job loss because of the arena’s traffic, a claim never proven because it was impossible to isolate cause and effect.

Yet by playing the little-guy victim card, the port made it easier for five council members to appease Seattle’s progressive political constituency, even though the port is every bit a corporate colossus. And the no vote averted the expense of the city having to defend itself, starting probably the next day, in court on the more complicated issue of a public contribution.

“All due respect to the port for the work they do, I don’t think they made their case about (the impact of arena location),” Burgess said. “That is how I voted.”

Burgess also made a suggestion about the much-discussed memorandum of understanding between Hansen and the city that commits to an NBA-first plan: Abandon it.

If indeed Hansen is pursuing wholly private funding, and the NBA still evinces no interest in expanding or relocating to Seattle, why not create a new plan that pursues hockey? This would make irrelevant the expiration of the MOU in November 2017.

“I was asked about the hockey-first idea some time ago,” Burgess said. “I said that they could make a proposal independent of the MOU for a privately funded project. That would require from the city only the street vacation.”

A new, private proposal frees Hansen from the threat of litigation over public funding and makes the ask of the council easier. In July came news that $40 million in federal funds were made available for the development of the $140 million Lander Street Bridge, the 20-year choke point for port traffic south of the stadiums.

The project now has commitments of $100 million. If Hansen and other Sodo stakeholders, including the port, can help close the money gap, the port’s complaints about arena location can be eased.

Since Hansen started buying Sodo land in 2011, much has changed in the Seattle marketplace, as well as with the port’s business. Hey, even the Mariners, another strident arena-location opponent, have a new owner: John Stanton, a former minority owner of the Sonics who voted against the 2008 sale of the club to owners from Oklahoma City that started this mess.

That Sonics-focusd 2012 MOU is as outdated as a flip phone. And a city council and a mayor who have their hands full with the nearly intractable issue of homelessness don’t need to spend time talking arenas.

If Hansen believes the increasingly affluent Seattle market can sustain a privately funded arena, he may become the real-life Miracle Max.


YourThoughts

  • Jamo57

    We’ll see. In the meantime I’m planning to spend my Snohomish County $$$ at the Staples Center and maybe Rogers Arena this year.

    • art thiel

      Well good for you. We always want Snoho money spent where it will do the most good.

      • Jamo57

        I’d love to spend my Snoho money in downtown Seattle during the winter months. But there aren’t any winter major league sports and the city council and enough of the citizenry don’t really make us “outta towners” feel welcome anyway. LOL.

        • art thiel

          Come by the bar and I’ll shake your hand.

          • Jamo57

            That sounds like a much better time than riding the Ducks.

  • MrPrimeMinister

    And it would appear that Peter Feigin has now laid the beginning groundwork for a team move.

    • Tom G.

      Too late. Milwaukee has a shovel in the ground for their new arena.

  • Tom Brush

    I sure would love to see this work out. I’ve always heard his proposal described as having a minimal public share, so it was surprising to hear Burgess say what he did. I hope they can convene another vote and get this done after all.

    • Playhouse

      While I’d never be one to scoff at the value of $120M, this was still a relatively minimal public share in comparison to such projects around the country. Certainly in comparison to what they city would likely be on the hook for with a Seattle Center arena project.

      • Tom Brush

        That’s how I see it, too.

        Also, they’d be reimbursed in full. Not sure what Burgess is proposing, exactly.

        • Playhouse

          The suggestion is to go less public or fully private to sway people to vote for the street vacation. The public contribution came up a few different times during the committee meetings leading up to the vote for some on the council.

          • art thiel

            The public contribution was always destined to be the bigger fight than the location on the port’s doorstep.

      • art thiel

        And remember it is not tax money, current or future. It is a loan to be paid back from arena revs.

    • art thiel

      It is minimal relative to previous projects.

      • Tom Brush

        Hey, it’s really cool you keep an eye on the comments (if that’s really you).

        • art thiel

          Thanks for noticing. That’s part of why a local-regional website is better for sports readers than a national one. Tell your friends.

          • LarryLurex70

            Speaking of national, you ever receive any interest from the folks at Around The Horn? Every time I watch it I can’t believe you’re not part of the revolving cast. Seems that programme’s mix of opinion, sports humour and factoids would be right in your wheelhouse.

  • Tom G.

    Not to be a Debbie Downer, but I’d feel more confident in the “all private funds” pitch working if it had come from one of the original “NO” votes. Because at this point if none of the “NO” votes are inclined to listen, these ideas just feel moot.

    At least, it’s weird for me because Chris Hansen has been the ONE person in the arena story that’s truly flexed financial muscle.

    And yet, I still feel more confident that the Tukwila project is more likely than SODO just because the red tape and murky politics likely wouldn’t exist if Ray Bartoszek could somehow assemble all of the money that was required to get that project going.

    It’s unfortunate for those of us that want to see something get DONE, but all we get in SODO are moving goal posts.

    • Playhouse

      Of course, the Tukwila project has not moved one iota.

      • Tom G.

        Only because of money. Not politics.

        • Playhouse

          Which says a lot. If nothing is standing in the way but money, why can’t they get anyone behind the project to push it across the finish line?

          • Tom G.

            Good question.

            My theory is Hansen trying to keep his project alive probably hasn’t helped.

            Because if an NBA-only arena was built in SODO and an NHL-only arena was built in Tukwila, guess where the majority of the non-pro sports events would probably end up going?

            I personally think Tukwila could work if that was the only arena built, but not if there was a direct competitor downtown.

            I think there are even documents that say the Tukwila Arena would host 200+ events per year. No way that can happen if there’s also a SODO Arena.

          • art thiel

            There would be only one new arena. And Hansen has the MOU for another 14 months.

          • art thiel

            The NHL would prefer to be in Seattle. Arenas in burbs have a spotty success record.

          • LarryLurex70

            I think the NBA might feel the same, too. Too many people in Puget Sound remain delusional in their thinking either league would be as interested in/excited about Tukwila as they are about Seattle. Especially in light of new(er) arenas being built in major cities elsewhere. I guess the Las Vegas example wasn’t evidence enough of that for some people.

          • LarryLurex70

            Because it’s in Tukwila.

        • art thiel

          Politics are always easier in burbs wanting profile. Doesn’t mean the burb is the better choice.

    • art thiel

      A no vote in May doesn’t necessarily mean a no vote down the road for a better deal.

      Bartoszek hasn’t raised money yet to be credible, but he may not until Hansen stops.

  • SEAallday

    If he is going to go all private, I hope he pulls back on some of the benefits for the city. I want him to have a successful venture but with all of the crap the SCC has given him, the SCC doesn’t deserve anything extra. They are going to stand up and say that they stood up to the billionaires and made them pay for it all. Let KeyArena stay the way it is and lose events to Spokane and Tacoma.

    • Tom G.

      That’s inevitable. He’d still probably have to contribute Lander money as a condition of the vacation, but I’d bet the $40 in bonding for potential SODO transportation improvements and KeyArena improvements would likely go away.

      • art thiel

        Way too early to speculate on the horse-trading.

      • LarryLurex70

        That would seem to make sense, wouldn’t it? Really, how practical would it be to sink multi-millions into Key Arena for improvements if its’ shelf life as a viable venue would end with the SoDo opening? Other than 3 days of Bumbershoot, once the Storm left for SoDo, what usefulness would Key Arena have?

    • art thiel

      It doesn’t work that way. Hansen seeks the city as a partner, not an enemy. You’re seeing the council as an enemy because you didn’t get your way, so the council must be bad.

      • SEAallday

        Well I don’t agree with the city council on a variety of issues but this one sticks out.

        I know in order for anything to get done, the city and Hansen have to work together. It is just frustrating to see cities that started this process after us begin to move into their new arena while we are stuck in the same spot with no light at the end of the tunnel.

        I am just worn out on the politics involved in this transaction. The city council just squeezes Chris Hansen for every little penny that they can get. I know it is their job to do what is best for the city so they are succeeding when you look at it that way. I just don’t want to see this opportunity pass us by.

        • art thiel

          I wrote the column primarily to point out that the project isn’t over. Hansen asked for an MOU window for five years because he understood the nature of the slog. He knew to be patient; how about you?

      • Jamo57

        Historically speaking though, the City of Seattle has never been inclined to make it easy to build sports venues. The Wikipedia page on the Kingdome describes hostility back to the late 50s regarding building a football stadium. The Dome, Safe, and Clink all had to be done beyond the city limits to get something built. But once they’re built the politicos love to ride along on the bandwagon when the teams do well.

        • art thiel

          Every politician represents more than sports fans. They aren’t necessarily hostile; they think tax $ is better spent other ways. Aside from Sacramento, every major municipality in CA in the past 20-plus years has responded as Seattle has.

  • http://twitter.com/chrisamccoy Chris McCoy

    Chris is playing a long game here. New politicians will come along, in time. The vote will get pushed through. #politics

    • art thiel

      Always a possibility, which is why he may need to de-couple from the expiring MOU.

  • Chris Alexander

    Not that it will happen but I would LOVE to see Hanson pull an about-face and say, “I don’t need you (the city/county/state) to contribute a dime; we’ll fund this 100% privately. What I do need is for you to waive taxes on the construction and the revenue generated from the arena.” (basically saying that if you’re not willing to pay for it you won’t benefit from it either). And there IS precedence for that type of arrangement since the state gives tax breaks to big companies like Boeing and Microsoft.

    That fantasy aside, private funding for the arena accomplishes 2 main things: (1) it makes it so that the street vacation is really the only “ask” from the city, and (2) it removes from the equation the absolutely ridiculous (but voter-approved) rule that requires city investments in sports arenas to return a profit.

    The problem with the 100% private financing is that without an NBA team, Hanson (and his partners) likely lose money long-term because the arena NEEDS an NBA team to pencil out financially. Still … I think it’s probably a risk that’s worth taking and is also likely one that Hanson knew he’d be taking even when he was signing the MOU a few years back. (aka the MOU was a best-case scenario but he was prepared for the possibility that he needed to secure his own financing).

    • art thiel

      Hansen will calculate building costs vs. revs and decide whether NHL-only pencils. The cost of tickets will be enormous, but maybe the Amazon-drunk economy can support it.

      • Kirkland

        The NHL has always had the most expensive tickets in sports, and it still gets 90 percent capacity at its games. With this loyalty, I wouldn’t worry about hockey fans not showing up unless their teams go on a decade-long funk (see: Carolina).

        • LarryLurex70

          But, with likely no one currently alive being able to say they’ve actually attended an NHL game in Seattle, how can you be so sure there’d be that kind of fan “loyalty” here? I mean, I HOPE the NHL Totems (please, do NOT name the team Metropolitans if it ever reaches that point) would be a hot ticket beyond the initial 3-year honeymoon, but, I’m still skeptical. And, all these fans talking about “support” in the form of attracting fans from BC need to ask themselves how much “support” did the ‘Supes get from there? How much “support” do the Canucks and Trailblazers get from here?
          If an NHL franchise in Seattle has to rely on ticket sales from Canuck fans in Vancouver, that’s not really an encouraging thought.

          • Kirkland

            Hockey fans are known for their loyalty and dedication, if not fanaticism, to the sport. They are as rabid as soccer fans (or, if you want to add on the stereotypes, comic book and science fiction fans). The Thunderbirds have had a loyal fan base for decades, one that even outdrew the Sonics one year, and the Everett Silvertips draw very well, not to mention the other US WHL teams. That hockey loyalty will transfer very well to the NHL, despite the higher ticket prices. Heck, if we can get 40,000 for MLS, we certainly can get 18,000 for the NHL.

            As for out of area support for the NHL Totems (I’m with you, save Metropolitans for throwback nights), there will be some. Portland and Vancouver consider the Seahawks “their” NFL team, while Seattle considers the Canucks “our” NHL team until we get one. The Sonics and Blazers analogy doesn’t apply; the bad Grizzlies experience soured Vancouver on the NBA, and no Sonics fan will be caught dead rooting for the Blazers, unless they’re playing OKC.