Thiel: Conlin says arena won’t get OK, but . . .

As the longtime chairman of the Seattle City Council’s land use committee, Richard Conlin knows a few things about dirt and what goes on top of it.

At the moment, however he finds himself under a fair amount of real estate after basketball fans heard about  a letter he sent constituents that said of the new basketball/hockey arena: “It is unlikely that this proposal will be approved.”

He becomes the first member of either the city or King County councils to offer a forecast, and apparently his voting intention, on the fate of the $490 million project backed by Seattle native Chris Hansen, Microsoft chairman Steve Ballmer and members of the Nordstrom family.

The local Twitterverse immediately came alive with contempt from basketball fans for Conlin’s position. At the least, the timing was surprising since council staffers are still researching the proposal and further public hearings are scheduled before the panels vote in August.

Conlin Hansen did not return phone calls and voice mails. His letter did not say how he knew the rest of the council members position on the proposal.

In the letter, wherein Conlin misspelled throughout Hansen’s name (“Hanson”), Conlin listed “a four-part test” that the council is supposed to be using to reach a decision. The first part was easy: yes, having the NBA back in Seattle would be a good thing.

The second test was arena location. He viewed with “skepticism” the SoDo location because of impacts on traffic and KeyArena, but wrote, “We need to continue to review.”

The third test was appropriateness for public investment, to which he wrote, “I have seen no evidence that justifies making a public investment, nor any serious reason why a public investment is necessary for the project to proceed.”

Of the fourth test, protection of the public investment,  he wrote: “It is not clear that the proposed relocation guarantee, for example, is any stronger than the lease which the Sonics broke when they moved to Oklahoma City. It is not clear whose assets are on the line if the arena becomes insolvent —  the arena in Portland (with a team owned by Paul Allen, who certainly has deep pockets) declared bankruptcy, leading to a difficult and challenging financial problem.”

He concluded the letter by saying arena advocates ought to lobby Hansen to make the project a 100 percent private enterprise.

He began the letter by saying “we do not invest public money in businesses,” which was odd because the proposal does not call for an investment in an NBA or NHL teams, which are  private businesses. Hansen proposes a project whose building and land would become publicly owned property that houses private businesses, in the way that King County taxpayers partially subsidize the Port of Seattle, which allows use by for-profit companies of the seaport and airport.

Additionally, Conlin’s statement about not investing in businesses contradicts the policies outlined here by the Seattle Office of Economic Development.

Also, the city and county have a long history of investing in public sports facilities that house private teams. Resentment of that practice among many taxpayers is what led Hansen to propose a $290 million private investment, and what amounts to a maximum $200 million loan from the public. The public money is largely a tax abatement over 30 years that does not include new taxes.

There is a theoretical risk to the public from bankruptcy, but Hansen’s documents and testimony were explicit that, in the unlikely event of bankruptcy, the municipalities would end up owning the team assets as well as the building in the event of default.  That is nearly unprecedented in modern public-private partnerships.

Regarding the sale of the Sonics to Oklahoma City interests, the franchise did not “break” the lease, but instead left with the blessing of the city council when the parties settled a landlord-tenant lawsuit brought by the city that released the Sonics two years early in exchange for $45 million. Conlin was a signatory to the deal, despite the fact that many observers believed a federal judge would rule in favor of the city’s position.

In an email Monday on another arena topic, the validity of former councilman Peter Steinbrueck’s claim made to the county council last week that the location of the proposed arena violates land-use ordinances,  a claim rejected by Mayor Mike McGinn, Conlin said both were partly right.

Conlin and Steinbrueck were co-chairs of the land-use committee in 2000 when ordinances were adopted that defined the baseball and football stadiums as part of a stadium transition zone that allowed for some sports/recreational use around the stadiums but were intended to limit impacts on the area’s industrial uses.

“Having reviewed the staff report on the stadium transition zone,” Conlin wrote in an email, “it reinforces my memory that Peter is right that there was no thought of a third stadium-like facility at the time.  The Mayor’s staff is also right that there is no legal barrier to an arena on that site.

“Intentionality is another question, and the staff report does indicate that the intention of adding those blocks to the south of Safeco Field (which the staff had recommended against) was to support uses that relate to the stadia and to provide a buffer to the industrial area, not to contemplate another stadium use in this area.  So my interpretation would be that building the arena would be legal within the current framework of laws, but that Peter is correct that it represents a reinterpretation of the purpose of including this area in the stadium transition zone.

“So, it remains fundamentally a policy question, not a legal question, and Peter’s points provide some additional weight to the argument that this is a poor fit with the industrial zoning around it — i.e., that the City in 2000 would have been unhappy with such a proposal, and quite likely would have prohibited it if it had been presented.  The extent to which that is still true in 2012 is, to my mind, an empirical question that ought to be able to be settled with data.”

So in Conlin’s view, Steinbrueck’s point was misstated as a legal argument, but may have merit with council members who agree with the priority of preservation of the industrial area.

Regarding the “four tests,” the views of Conlin, as a former council president and a member for 14 years, may be influential. But his flawed representation of Hansen’s proposal, the dismissal of the project’s chances before all the research is complete and his absence of an accounting for his conclusion, is a bewilderment.

And spelling the man’s name correctly is always helpful for credibility.