King County approves arena deal as Seattle demands amendments
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SEATTLE -- Private investor Chris Hansen must amend his arena proposal if he wants the approval of the Seattle City Council, the council said on Monday.
A letter addressed to Hansenand signed by eight council members states the agreements in the memorandum of understanding "do not represent an appropriate balance of public and private funds, nor do they sufficiently protect the city from the financial risks inherent in the arena's financing."
Council members added they remain hopeful they can reach an agreement; however, if their concerns are not addressed, "we do not believe that proceeding with the project would be in the City's or the public's best interest."
Bruce Harrell was the only council member whose signature did not appear in the letter.
The council made the announcement on the same day the King County Council approved the memorandum with a 6-to-3 vote.
Hansen's proposal calls for the city and King County to cover $200 million of the arena's $490 million cost. The public's investment would later be repaid using 100 percent of the arena revenues.
Council members said they are open to sharing a portion of the tax revenues generated by the arena with Hansen's group, but not 100 percent. Instead, the council wants some of the $200 million in arena revenue to go to funding transportation issues and have Hansen agree to cover a greater cost of the arena.
"Right now, all of the tax coming from the arena are dedicated to paying off money that would go to him (Hansen) to help construct (The arena), and we are merely saying we need to get a better balance," said council member Tim Burgess.
The letter said while the city would own the arena and the land it sits on, the arena investors - and not the public - would enjoy the benefits of using the land and the arena. The letter added that the current arrangement would deprive Seattle from using the arena's income to help address impacts of the arena beyond what Hansen's group would be responsible for.
The council wants firmer language on the financial guarantees Hansen's investment group would provide to protect the city's investment, as well as a way for the city to independently verify that Hansen's group's financial performance stays on target.
Council members also want Hansen to fully disclose the members of his investment group. To date, Hansen has revealed Microsoft CEO Steve Ballmer and Erik and Peter Nordstrom are among the investors, but has not identified anyone else in the group.
Finally, the council wants a clearer picture of the improvements that would be made to KeyArena so that it could serve as an interim host arena to an NBA and/or NHL team, and more details on what could come of the Key once the teams move into the new arena.
The council members said if the issues can be resolved, they are prepared to move quickly on approving a legislative package.
Seattle Mayor Mike McGinn said the council may be pushing its luck.
"I understand council wants to improve the deal. But I hope they recognize it's a pretty good deal already, and I hope they don't push so hard that they kill the deal," he said.
Hansen said he is eager to work with the city council to find a solution.
"I want to personally thank the King County Council for all of their hard work and for taking a big step today to move forward on our proposal. There is still much more to be done, but I am looking forward to sitting down with City Council members to figure out how we can make this deal work for everyone,” he said in a released statement.
County Executive Dow Constantine released a statement Monday thanking the county council for its decision.
"This proposal is likely the best our region will ever get to bring back the Sonics and lure an NHL team," the statement reads. "The unprecedented financial model used for this proposal provides strong protections for the public, minimizes financial risk, and is far different from those used for the region's past stadiums."
The Port of Seattle, among others, has raised also raised concerns about the proposed new arena, citing traffic concerns.
A private study funded by Hansen concluded the proposed arena would not debilitate traffic in SoDo. The study, however, has done little to assuage the concerns of critics.
Last week, the city's planning commission released its own report urging caution with the proposal. The commission fears fears the proposed 18,000-seat arena could handicap port operations.
A letter addressed to Hansenand signed by eight council members states the agreements in the memorandum of understanding "do not represent an appropriate balance of public and private funds, nor do they sufficiently protect the city from the financial risks inherent in the arena's financing."
Council members added they remain hopeful they can reach an agreement; however, if their concerns are not addressed, "we do not believe that proceeding with the project would be in the City's or the public's best interest."
Bruce Harrell was the only council member whose signature did not appear in the letter.
The council made the announcement on the same day the King County Council approved the memorandum with a 6-to-3 vote.
Hansen's proposal calls for the city and King County to cover $200 million of the arena's $490 million cost. The public's investment would later be repaid using 100 percent of the arena revenues.
Council members said they are open to sharing a portion of the tax revenues generated by the arena with Hansen's group, but not 100 percent. Instead, the council wants some of the $200 million in arena revenue to go to funding transportation issues and have Hansen agree to cover a greater cost of the arena.
"Right now, all of the tax coming from the arena are dedicated to paying off money that would go to him (Hansen) to help construct (The arena), and we are merely saying we need to get a better balance," said council member Tim Burgess.
The letter said while the city would own the arena and the land it sits on, the arena investors - and not the public - would enjoy the benefits of using the land and the arena. The letter added that the current arrangement would deprive Seattle from using the arena's income to help address impacts of the arena beyond what Hansen's group would be responsible for.
The council wants firmer language on the financial guarantees Hansen's investment group would provide to protect the city's investment, as well as a way for the city to independently verify that Hansen's group's financial performance stays on target.
Council members also want Hansen to fully disclose the members of his investment group. To date, Hansen has revealed Microsoft CEO Steve Ballmer and Erik and Peter Nordstrom are among the investors, but has not identified anyone else in the group.
Finally, the council wants a clearer picture of the improvements that would be made to KeyArena so that it could serve as an interim host arena to an NBA and/or NHL team, and more details on what could come of the Key once the teams move into the new arena.
The council members said if the issues can be resolved, they are prepared to move quickly on approving a legislative package.
Seattle Mayor Mike McGinn said the council may be pushing its luck.
"I understand council wants to improve the deal. But I hope they recognize it's a pretty good deal already, and I hope they don't push so hard that they kill the deal," he said.
Hansen said he is eager to work with the city council to find a solution.
"I want to personally thank the King County Council for all of their hard work and for taking a big step today to move forward on our proposal. There is still much more to be done, but I am looking forward to sitting down with City Council members to figure out how we can make this deal work for everyone,” he said in a released statement.
County Executive Dow Constantine released a statement Monday thanking the county council for its decision.
"This proposal is likely the best our region will ever get to bring back the Sonics and lure an NHL team," the statement reads. "The unprecedented financial model used for this proposal provides strong protections for the public, minimizes financial risk, and is far different from those used for the region's past stadiums."
The Port of Seattle, among others, has raised also raised concerns about the proposed new arena, citing traffic concerns.
A private study funded by Hansen concluded the proposed arena would not debilitate traffic in SoDo. The study, however, has done little to assuage the concerns of critics.
Last week, the city's planning commission released its own report urging caution with the proposal. The commission fears fears the proposed 18,000-seat arena could handicap port operations.
Mr. Hansen, why not look at Tacoma or the east side, the Seattle City Council would rather whinne like a bunch of spoiled little brats, they are more worried about breast feeding in public then working to build a new stadium. Take you money and run.
Yippee yet higher taxes to pay for yet another sports arena! Ah well, at least they're good points of mobilization when the next big earthquake hits.
Sure would be nice if Seattle had a government that looked for ways to do things rather than looked for ways not to do things.
Could you imagine if the current City Clowncil ran things in Seattle back in the 60s or 70s? The Space Needle would have never been built...the Sonics, Seahawks, and Mariners wouldn't have been founded.
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It's sad to see a nancy boy like Richard Conlin ru(i)n this city.
OK Seattle voters....are you ready to vote these clowns out yet? Â Seriously, this is just one of many moronic things your council has done. Â How much more do you want to take?
 @stamperzann They will never learn. If you could remove the greater Seattle residents from the political scene in Washington we would be a million times better off. Take one look at who they voted in as mayor that says it all...........
 @tandras  @stamperzannÂ
Mayor Mcginn has performed admirably as far as i'm concerned.
They thought they were getting the second coming of al gore and he turned out to be a moderate with a strong sense of fiscal fairness.
In the interest of the public (King County residents), there should be a public vote.
 @mr_sandman If everything went to a public vote then nothing would ever get done.Â
@Hachee_Bungwhy REALLY!? Nothing? EVER? What planet do you live on?
 @mr_sandman Why?
The only public money is in the form of privately backed, fully insured bonds.
There is zero risk whatsoever to the public.
 @Mesh If the public votes for it, great! But why use PUBLIC land to appease a small minority that wants basketball back. Zero risk? we'll see...
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@Ben W @mr_sandman No B-ball for me... I do want hockey though.
@Ben W @mr_sandman You are absolutely dreaming. Most people in Seattle, like myself, don't give a crap about professional sports.
 @mr_sandman a small minority wants basketball back? i believe over half of seattle and the state want bball back in the state of washington!
 @mr_sandman you said "But why use PUBLIC land to appease a small minority that wants basketball back".    Ummmm....Hansen owns the land, it's not PUBLIC. Get your facts right.Â
 @mr_sandman Since when is privately owned land public?
 @mr_sandman If you don't understand how bonds work I can explain it for you.
It will happen.Â
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You can't really fault the council for trying to squeeze more golden eggs from this goose but one would hope they would benefit from the experience, This is a once in a lifetime opportunity for a municipality.
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Regardless of all the moronic vitriol the unwashed masses love to spew here on komo, this is a good deal for the city and it will generate money.
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Unlike the kingdome which still has 4 years of payments left on it.
Well there goes that....
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Hansen should try a nearby city, like Bellevue. You'd be surprised at how willing other cities are compared to Seattle. Doing anything BIG in Seattle (see viaduct tunnel, monorail, sonics, etc) will just get killed or the process will become so expensive and slow that it's just not worth it anymore.
HolySheet...!! Â Thought this was supposed to be a Seattle City deal. Â Now the county is co-funding it...??
 @Big Don The county has more borrowing power. This has been a City/County thing the entire time.
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The Seattle City Council members are criminals. How many times have they undermined the democratic process?They think they are above the law because someone slips them some money for their campaign.Â
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The ceiling is literally falling onto the floor at the downtown post office.Â
 @SeattleInternetTrollsNBATeam What does the condition of the downtown post office (a FEDERAL building) have to do with the Seattle City Council?
This is TOTAL BS! NO MORE STADIA! Do something actually useful for a change
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@kybhotbs Not what I said.
 @Alikelystorey You are amazingly ignorant.
@the I assume anyone who disagrees with your position is ignorant.
Time to give the Seattle City Counsil the middle finger. Looking a gift horse in the mouth and demanding more.....typical Seattlites. Advise to Chris say "Bye Bye" to the whole deal and sell the land for double what you bought if for!
 @John Anom I feel sorry for Mr Hansen having to deal with these idiots.
That's easy. Take the idea somewhere that has parking and access to I-5
 @brewzbrothers "That's easy. Take the idea somewhere that has parking and access to I-5"...huh?  Are you joking? If so, you got me. If not.....you couldn't be more wrong. The stadium would have plenty of parking with Safeco and Clink fields parking garages. Together they have almost 4000 parking spots.  So there is already a bunch of parking . And, have you heard of Edgar Martinez way or drive or whatever it is? It's an on-ramp that is about 500 yards from I-5 (and I-90) and would only one block from the arena.Â
The change should be leaving the city. They do not want his business. Go somewhere they will enjoy the extra money coming in.
"They said while the city would own the arena and the land it sits on, the arena investors - and not the public - would enjoy the benefits of using the land and the arena." So we wouldn't benefit from having the NBA back as well as other events? Clearly not representing us. And the city wants improvements made to the Key so the teams can play before they go into the new arena? What improvements? Seriously? I think we can handle the Key if they were able to hold the Sonics in the last few seasons as well as other shows such as The Wall. The rest of the proposal from the city I really don't have a problem with, but this is a bunch of BS.
 @Zoso The Key Arena is physically too small to be home to the NHL. Nothing can be done to host the NHL there.
There's too much red tape wrapped around this new arena plan in Seattle, and the growing dispute over the numbers might ruin the deal!
 @Abracadabra! That's Seattle politics for ya.Â
How about this... I need a new 61" flat-screen TV... There's no risk to the surrounding community, no traffic issues, no financial impact on local businesses. Mr. Hansen can pay for half and the City of Seattle pays for the other half...
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 ...wait, what? It doesn't work like that?
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As far as I'm concerned, any sports venue can $uck it. Why should my tax revenue be use to pay for it? How about charging the fans what it REALLY costs...Â
@Poisonous Giraffe
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Because YOUR tax dollars would NOT be paying for the arena, you jack wagon!  Do you even know what municipal bonds are? Google it, please. The only ones paying for this arena are the users. If you hate sports (as it sounds like you do) then I doubt you'd attend any event at this arena so your tax dollars from the tickets-food-parking would not pay for this arena.
 @path_tech  @Poisonous Reasoning with people that blindly form opinions is a waste of your breath, or in this case your fingers.
Does your television generate income for the City? Does it employe hundreds of workers to both build it and tend it once it's on your wall? What about the businesses surrounding it? Will the profit from your television? Will people come from other partsof the region to watch your television?
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Apples to applies friend.
Build it in Spokan or Yakima, Seattle's already a clustered mess for traffic.
Not sure why Hansen's group is so set on the SODO area for the arena. I realize they have already invested millions of dollars for the location south of Safeco, but why aren't they considering other locations. I personally think that Bellevue might be a cool location for an arena. Sure it is out of the way, and yes 405 has it's own traffic problems, but I would much prefer a different location than SODO.Â
 @TelecasterMaster How about because the City of Seattle zoned that area for stadiums. Because Bellevue SUCKS and has terrible access via 405, 90 and the 520's.Are you affiliated with the Port who love to spew nonsense that isn't based on nor backed up by facts?
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@the @TelecasterMaster Aw, and you spew stuff that is based on facts I see.. Oh, Bellevue sucks. Last time I was there, Bellevue people didnt have to pay money to cross the 520. Oh wait, bet you will ask if I am affiliated with the Port..LOLÂ Â
Socialize the cost, privatize the profit. Rinse. Repeat.
And once again, Seattle does all it can to end progress.
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Real simple, build the stadium in Kent, Lynnwood, Everett or Bellevue. There are pros and cons to all of them.
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Kent there is real estate, transit centers and I-405, I-5, and I-167 for access. The downside is impact to the Showare Center.
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Lynnwood you've got real estate, transit, I-405 and I-5 and major highway improvements to ease congestion just being completed.
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In Everett you have mass transit, light rail service, massive amounts of available real estate, and a progressive city council. However the down side is impact to the Comcast Area.
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In Bellevue you've got the fan base, you certainly have developers that would be interested, and transportation hubs. The downside is you do have some bad cases of "not in my backyard," and Seattle residents will be further punished by having to pay a toll on SH-520 if they don't take 90 or go around.
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But I say Hansen should give Seattle two big fat middle fingers and the Seattle Sonics can play in any of the towns I've listed above. Of the four, I think Kent or Everett would be easiest to build in. There are plenty of examples where successful teams have their stadiums outside of the urban heart of the city they play in, and fan attendance is a non-issue.
@Howard Beale -That makes no sense. There is no way Everett or Kent would get involved. EEC is doing well from my understanding but Showare is still losing money with TBIrds attendance is no different with a brand new arena. When it does fill up, there is not enough parking- they completely misplanned that one and you think they will take on an arena that holds 3x as many people with 10x the challenges? No way! The Bellevue fan base? Source? Cause you say so? Yes there is some money but also some of the shallowest people you'll meet in WA who will never support a losing team- not cool to be seen at a loser. I hate going to Bellevue, it's a nightmare, generally a rip off with plenty of traffic problems anyway. Lynnwood might work- hoops and hookers/ hockey and hookers Tuesdays would be a great family outing.
 @Howard Beale Have you ever driven in the Kent valley during rush hour? I didn't think so.
 @Howard Beale Howard well put. I love the Bellevue idea. I live in Downtown so yes, I like the convenience of the SODO arena, but I think it is a boring location anyway. Too be honest I don't like the idea of having a giant cluster of stadiums in that part of town. Let the Mariners and Seahawks have their space, and let NBA/NHL have theirs. Bellevue also has the 6th highest income in the state of Washington. Wealthy fans, strong corporate presence, and a beautiful location=success in my opinion.
 @TelecasterMaster Really, like putting Oakland A's in San Jose or the Yankees in NJ, I don't see why there are so many people from outside of the area that can't understand this is a Seattle team, not Smellvue or Kent, or Lynwood. These are all horrible places compared to Seattle.