Seattle City Council approves new sports arena deal
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SEATTLE (AP) — A wealthy hedge-fund manager won approval Monday for his plan to bring professional men's basketball and hockey back to Seattle, with initially skeptical City Council members agreeing to put up $200 million for a new arena after he promised to personally guarantee the city's debt.
Council members voted 6-2 to approve Chris Hansen's plan for a $490 million arena near the Seahawks and Mariners stadiums south of downtown.
"I was a skeptic when this came forward because I was worried about our taxpayers," said Councilwoman Sally Bagshaw. "The fact that we have a personal guarantee from Mr. Hansen ... that makes a big difference.
"At the end, we're going to have something the city is proud of."
Seattle hasn't had an NBA team since 2008, when the SuperSonics moved to Oklahoma City and became the Thunder, devastating their fans here. It's been quite a bit longer since Seattle had major-league hockey: The Metropolitans, who won the Stanley Cup in 1917, disbanded in 1924.
The Edmonton Oilers is one NHL team already discussing possible relocation to Seattle after plans for a proposed $475 million arena in Edmonton were thrown into doubt earlier this month.
Though the franchise said it still hopes to reach a deal with Edmonton on a new arena, owner Daryl Katz, team president Patrick LaForge and Kevin Lowe, president of hockey operations, were in Seattle for meetings Monday about a possible relocation.
Along with hockey legend Wayne Gretzky, the Oilers brain trust reportedly toured Key Arena, which would be the interim venue if a team relocates while the SoDo arena is constructed.
The Oilers said in a statement that the team is listening to proposals from a number of potential NHL markets.
The team is pushing the Edmonton mayor and city council for a favorable new financial agreement on a new arena, and a trip to the Northwest may give the council fear and make Seattle nothing more than a pawn to get a deal done there.
LaForge wouldn't comment, sticking to his one and only talking point of the night.
"It's a nice city," he said.
Hansen, of San Francisco, is a Seattle native, an early investor in Facebook and a big Sonics fan who approached Seattle Mayor Mike McGinn last year in hopes of building a new arena to attract an NBA team and hopefully an NHL team as well. KeyArena, where the Sonics played, is considered outdated and financially unviable. The $200 million in public financing would be repaid by arena-related taxes.
The deal Hansen worked out with the mayor's office met with resistance at City Council, where members worried about the effect of more traffic in what is a crucial shipping corridor, thanks to the nearby Port of Seattle, and about creating competition for the publicly owned KeyArena, which turned a profit last year.
But Hansen made a number of concessions and won over a majority. In addition to personally guaranteeing the debt payments, he agreed to kick in more money for transportation improvements and $7 million for KeyArena, and he agreed to buy the new arena back from the city for $200 million at the end of the 30-year use agreement if that's what the city wants.
He also agreed to be independently audited to assure that he's worth at least $300 million.
"I want to thank all of Seattle's elected officials and their staffs for their willingness to roll up their sleeves and work with us to get us to this point," Hansen said in a written statement. "Today's vote demonstrates that by listening to each other and working hard to address the concerns of all stakeholders that we can make the arena a reality and bring professional basketball and hockey back to Seattle."
The King County Council already approved the original deal but needs to approve the revised version.
Under the deal, the arena proposal will undergo an environmental review that could take a year. The review will look at whether other sites, including Seattle Center, where KeyArena is, should be considered.
The two city councilmen who opposed the deal, Richard Conlin and Nick Licata, said that while it might be good as far as stadium deals go, that doesn't mean it's a good use of public money. Conlin said that when new businesses typically move into the city, the taxes they generate are a benefit to the city. In this case, he said, the city is giving away $200 million in tax revenue up front, only to collect it back later on.
Licata said professional sports franchises aren't like nonprofit cultural organizations like operas or symphonies, which don't threaten to skip town when money's tight.
"What some citizens see is that those who have a lot of money are using public resources to get more money," he said.
Council members voted 6-2 to approve Chris Hansen's plan for a $490 million arena near the Seahawks and Mariners stadiums south of downtown.
"I was a skeptic when this came forward because I was worried about our taxpayers," said Councilwoman Sally Bagshaw. "The fact that we have a personal guarantee from Mr. Hansen ... that makes a big difference.
"At the end, we're going to have something the city is proud of."
Seattle hasn't had an NBA team since 2008, when the SuperSonics moved to Oklahoma City and became the Thunder, devastating their fans here. It's been quite a bit longer since Seattle had major-league hockey: The Metropolitans, who won the Stanley Cup in 1917, disbanded in 1924.
The Edmonton Oilers is one NHL team already discussing possible relocation to Seattle after plans for a proposed $475 million arena in Edmonton were thrown into doubt earlier this month.
Though the franchise said it still hopes to reach a deal with Edmonton on a new arena, owner Daryl Katz, team president Patrick LaForge and Kevin Lowe, president of hockey operations, were in Seattle for meetings Monday about a possible relocation.
Along with hockey legend Wayne Gretzky, the Oilers brain trust reportedly toured Key Arena, which would be the interim venue if a team relocates while the SoDo arena is constructed.
The Oilers said in a statement that the team is listening to proposals from a number of potential NHL markets.
The team is pushing the Edmonton mayor and city council for a favorable new financial agreement on a new arena, and a trip to the Northwest may give the council fear and make Seattle nothing more than a pawn to get a deal done there.
LaForge wouldn't comment, sticking to his one and only talking point of the night.
"It's a nice city," he said.
Hansen, of San Francisco, is a Seattle native, an early investor in Facebook and a big Sonics fan who approached Seattle Mayor Mike McGinn last year in hopes of building a new arena to attract an NBA team and hopefully an NHL team as well. KeyArena, where the Sonics played, is considered outdated and financially unviable. The $200 million in public financing would be repaid by arena-related taxes.
The deal Hansen worked out with the mayor's office met with resistance at City Council, where members worried about the effect of more traffic in what is a crucial shipping corridor, thanks to the nearby Port of Seattle, and about creating competition for the publicly owned KeyArena, which turned a profit last year.
But Hansen made a number of concessions and won over a majority. In addition to personally guaranteeing the debt payments, he agreed to kick in more money for transportation improvements and $7 million for KeyArena, and he agreed to buy the new arena back from the city for $200 million at the end of the 30-year use agreement if that's what the city wants.
He also agreed to be independently audited to assure that he's worth at least $300 million.
"I want to thank all of Seattle's elected officials and their staffs for their willingness to roll up their sleeves and work with us to get us to this point," Hansen said in a written statement. "Today's vote demonstrates that by listening to each other and working hard to address the concerns of all stakeholders that we can make the arena a reality and bring professional basketball and hockey back to Seattle."
The King County Council already approved the original deal but needs to approve the revised version.
Under the deal, the arena proposal will undergo an environmental review that could take a year. The review will look at whether other sites, including Seattle Center, where KeyArena is, should be considered.
The two city councilmen who opposed the deal, Richard Conlin and Nick Licata, said that while it might be good as far as stadium deals go, that doesn't mean it's a good use of public money. Conlin said that when new businesses typically move into the city, the taxes they generate are a benefit to the city. In this case, he said, the city is giving away $200 million in tax revenue up front, only to collect it back later on.
Licata said professional sports franchises aren't like nonprofit cultural organizations like operas or symphonies, which don't threaten to skip town when money's tight.
"What some citizens see is that those who have a lot of money are using public resources to get more money," he said.
So glad the city has it's priorities straight. Those of us who don't watch sports can now go over to the Seattle Center and watch dust collect on blown glass.
 @joefuss How would it be any different if they said no to this deal?
I wonder which happens first, Seattle gets a NHL team or the NHL settles their strike...
WOOO! BRING US THE NHL!
Was there ever any doubt they'd go for it?
 @Glassman No, because there was way too much money being exchanged in the back room. It will be interesting to see just how much money the tax payers will eventually be stuck with when the inevitable cost overruns begin.
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There were $100 million in cost overruns for Safeco field. How much did the tax payers get stuck with? ZERO. Safeco Field is also paid off now. How much money did the tax payers have to foot for the construction of Safeco Field? ZERO.
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The CLINK is being paid off right now, no cost over runs were documented. Although the CLINK won't be officially paid off until 2020 how much money have the tax payers footed for it? ZERO.
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So, please tell me after two successful stadiums built with ZERO tax payer money put into them, WHY does the Arena deal make you feel supicious?
I am on this video!!! In the middle of the hug pile after the vote was announced, and also about 2 minutes in! Now you all know my name! haha!!!
Yeah, so?
Read: Seattle City Council signs agreement to steal another city's team, which makes them no better than Clay-Clay and the Okie-Dokie theiving b*$*@**$.
 @WalletVoter There is a big difference.  There is no mistaking the intention of Chris Hansen.  He is buying the team to move the team and will be honest and up front when he buys the team.  Everyone knows the NBA is not going to expand so the reality is that is the only way to get a team.  This is in contrast to Clay who came to town under the guise of lying saying that he wanted to keep the team here which we all knew was BS, but he did not have the nads to be honest.  That aside though the real enemy there was Howard Shultz who sold the team to an owner who "hosted" New Orleans following Katrina at Oklahoma City and was obviously intending to buy and move a team there.
Orcas Thunder,
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You need to look up how municipal bonds work. The city will issue bonds that investors will buy which is what generates the cash. These are investors who are looking to make money in the form of interest on the bond which is at a much lower rate than what would be charged if Hansen was to seek private financing to cover the entire project. The issuance of bonds for projects like this is very common. So when you look at projects like Benaroya Hall, the Seattle Opera House, viaduct tunnel, etc they were or are being financed using Bonds in this same manner. Think of it this way. If you have $500,000 in your bank account and you want to buy a house for $500,000 are you going to deplete your entire savings account to buy the house or are you going to get a low interest loan, keep your $500,000 in the bank earning interest 8% a year and then pay a roughly $3000 monthly mortgage payment? Of course your going to do the loan. Same thing here, except in this case if there is a default on the bonds by the ownership group the Hansen himself is guaranteeing repayment of the debt from his personal assets which was part of the agreement with the city.
Great so now we have another gilded palace for another mostly losing team so that people from the sticks can come in and clog the roads and watch mediocrity
 @seattlenativemike The Sonics were the Seattle team that was most consistently good.
 @seattlenativemike Have fun being sad about it.
If I want expensive beer I can get that at home. The sonics havent been worth watching since the 70s...hawks since the 80s. Mariners had -a season-
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and now we want more?
 @seattlenativemike This comment shows how little you know about Seattle sports or their impact on the community. Feel free to get into your Subaru and GTFO of town.
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kthxbai
Could it be greed maybe?
 @seattlenativemike Yeah, there's just something about pro sports teams these days that doesn't seem as interesting or inspiring as they used to be, just can't put my finger on what it is.
@seattlenativemike Sonics had great runs in the mid 90's and The Seahawks won their division 5 years in a row in the 2000's with a Superbowl appearance in 2006. If that is not worth watching to you then you are not a sports fan and none of this is relevant to you anyway, so why comment at all?
May be good for Seattle,but traffic-wise will be worse and not enough Parking !
 @scychan Easy. encourage public transportation for the games by increasing parking fees (with that increase going to the city for road repairs) which will cause many to actually use the public transportation for the games and it will help the public transportation system.
 @Rebecca Darnell  @scychan ...or will cause ticket sales, beer and trinket sales to plummet when it simply becomes too expensive to attend.
Run the Sounder!
 @scychan Games usually aren't at the same time as each other
Awesome! I am glad the city officials saw this was the arena deal of the century compared to others across the country and made this smart investment that is going to bring in millions in tax revenue and create jobs. Thankfully they did not hide from the naysayers who just want to throw sand in the gears of everything, or are not educated on the subject and still think it is being funded by tax $$, or just want their palms greased (aka The Port of Seattle). The entire city is buzzing today because of the MNF game. Imagine if we didn't have the Seahawks and the Clink. People tried to stop that too. Morons. We live in a world class city and it is time we have world class representatoin in the sports world like we do in arts and culture, technology, and industry.
Great news! Our region and state need this. I think the deal is a great one too. I think we all are SO ready to get this economic recession behind this. And this will help toward that.Â
Sounds like there will be a lot of new jobs for support services in Seattle in about five more years.
"The deal calls for $200 million in public financing to be paid back by arena-related taxes and rent. Under new terms agreed to earlier this month,"
OK...and where is THAT money coming from?
WHY is the public paying for a private sports venue?
The public is not paying for a private sports venue. It is $200 million in bonds. Do some research.
 @floggingnotblogging The bonds are related to the sports venue - therefore the public is providing money for the venue. That is money that could be used for other public uses that should have a higher priority than a private sports arena.
You conveniently fail to mention that two nearly impossible things would have to happen for public money to come into play. 1) Users fees are paying the $200M back so they would have to fail to do that. We know roughly how many people are going to attend games and so it can be easily caluclated 2) Chris Hansen would more than have to not "follow though".  He is legally required to cover any shortage. One of the richest guys in the world would have to go broke. The risk is so small it is not even worth mentioning in a serious conversation. Every investment the city makes has some risk, even putting in a light standard that could eletrocute a dog. So again, there is no tax money used here. There is no public money. Just a huge reward with very, very small risk. If you don't think public money should go to stadiums you should support this deal because that is exactly the situation. As long as you tell these lies there is going to be tens of thousands of sonic fans calling you on it. Get used to it.
@OrcasThunder@floggingnotblogging
"Yes, it probably is "worth the risk"...but I'm nor talking about "risk"
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"You still don't get it, that's money the public is on the hook for if Hansen & group fails to follow through."
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That is exactly the risk I was referring to, this in my opinion is the only risk to this deal and I think it's a very small one. Â Not to mention he has other partners, very rich ones. Â He is also making a huge investment in purchasing one if not two teams.
 @oledawg Thanks for your honesty - it's rare on this forum.
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 @OrcasThunder I am surprised, not my thing and I had no idea.  I would not be opposed to this, find an investor and take it before the council, good luck.
 @floggingnotblogging "You still don't seem to understanding how municipal bonds work."
You still don't get it, that's money the public is on the hook for if Hansen & group fails to follow through.
 @oledawg Sorry about the lack of editing - I did a cut-n-paste, and the "editor" wouldn't let me edit it...
 @oledawg You might be surprised at the amount of money in the art market...
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This is from the SAM (Seattle Art Museum financial report for 2008: In 2007, the museum opened the Olympic Sculpture Park and re-opened an expanded downtown facility. As a result, fiscal year 2008 represented the first full year of operations for all three sitesâSAM Downtown, Seattle Asian Art Museum and Olympic Sculpture Parkâwith operating revenues and expenses increasing by approximately 67% for the year. Earned revenue through admissions, museum store and café sales totaled $6.1 million or 20% of fiscal year 2008 operating revenue. Membership and event revenue provided $5.9 million or 19%, with the balance of contributed revenue providing $3.2 million or 10%. Of the $31.1 million in total operating expenses, $20.0 million, or 64%, was program-related. Accession of art objects through purchases generally utilize donor-restricted funds and are not listed in the statement of operating activities. As of June 30, 2008, temporarily restricted net assets and investments restricted for long-term purposes, including funds held in outside trusts, were $143 million and $114 million, respectively. The museumâs audited financial statements provide more detail and are available upon request. https://www.seattleartmuseum.org/aboutus/pdfs/2008AnnualReport/FY08AnnualReport.pdf
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 @OrcasThunder You still don't seem to understanding how municipal bonds work. Read Doubledown's explanation above. He explains it very well.
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"the public to pay $200 M". "looking for tax support". "I would not support using tax money".
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These are all misstatements that are not accurate. Municipal bonds have nothing to do with taxation or tax revenue or tax expenditures. The city is using its bonding capacity. It will not affect the operation of any of the public service items you mention unless the city wants to use its bonding capacity and couldn't because of the $200M used for the arena. Obvously that is not going to happen. It is a drop in the bucket. These type of public/private partnerships are commonplace.
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To answer your question, yes, I would agree to the city to using a $200M bonding effort to support a museum or an art related project. Especially if it was going to generate large tax revenues, create jobs, the city was going to own the land and the structure in the end, the bond repayment was guarenteed by a private citizen, and a cultural icon was going to return to the city. That would be a no-brainer.
 @OrcasThunder How would this art facility pay back the bond or generate any revenue at all and who is backing it?  It's not like they have 200 million laying around and have decided to use it on the arena instead of schools and roads.
 @oledawg "I think it's worth the risk"
Yes, it probably is "worth the risk"...but I'm nor talking about "risk", just why it's so important for the public to pay $200 M for what is in reality a private business venture.
At a time when every tax dollar is needed for vital public needs like roads, infrastructure, schools, preparing for a possible ugly winter - even assisting with citizen needs like help in having enough food and heating - why should these suffer for lack of funding simply because some business asks for it?
If this were some grand art event - perhaps a museum of the arts of the PNW, with classes to teach the arts of all kinds to all the people - would you support a $200 M loan at this time?
If not, doesn't that mean that you are simply looking for tax support for something that YOU want? An arrangement that "might" reduce the price YOU pay at the games?
I would LOVE to have such an art facility in Seattle. But in the current fiscal situation, I would not support using tax money at this time.
 @OrcasThunder I think it's worth the risk, and it's not just Hansen, he has a strong local base of investors working on this deal with him.  Even if I never go to a game I think this is a sound business investment for the entire region, not just Seattle or King County.  I understand your concerns but we've seen deals with Safeco and Century Link work out so far, this is even better than those, broader reaching in the benefits as well.
Thanks! I know you mean SODO and the games are well publicized so you should not be caught in traffic if you listen up for games. It won't be as bad as during the Sounders, Mariners, or Seahwaks since we are talking about smaller crowds.Â
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No, not the team that moved to OKC but any team that moves here will be immediately adopted as the Sonics. So I should say I can't wait for the pervebial Sonics to come home!
 @oledawg  @floggingnotblogging "The difference is that this money is paid back"
Hmmm...OK, they are bonds - money the City comes up with and the taxpayers are tied to. And yes, bonds are "supposed" to be paid off...but if Hanson goes broke, we still get stuck - again. Plus, if he pays $200 M at the end of the contract, there is still the interest to pay...
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Look, I am not opposed to the stadium, or the teams. I'm not a fan, won't go to games, but I do see the value in taxes generated by the fan base. I just do not agree that the things should be built using ANY public funds at all. They are private businesses, let the business owners pay for ll of it. We would STILL get the revenue from the taxes, etc. generated by the games and fans.
 @floggingnotblogging Well, I'm happy for you.
Just let me know when to stay out of the SOHO district, OK?
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But you don't really think it will be the former Sonics, do you?
Amen! The future of my family's Sonic memories is worth BILLIONS! I can't wait to for the Sonics to come home.
@oledawg @OrcasThunder @floggingnotblogging Not only a great safeguard but how many millionaires alone would a NBA team bring to the area? Roughly 30, who will be buying houses, cars, clothes, groceries etc. that will generate jobs and other tax revenue. Let alone the charity work and donations to many other local charities, money they will raise. Having a team or teams will make the area better in many ways!
Sorry, wasn't trying to call the "key arena" useless. It has many good viable uses left and I hope it does get used for future events.
 @Andy78 The so-called "Key Arena" (it's corporate sell-out name) AKA "The Coliseum" (it's proper name), is NOT a "useless asset". It's a wonderful venue for countless uses, and provides a LOT of jobs for local support staff.
 @Andy78  @oledawg  @OrcasThunder  @floggingnotblogging yup, just another great safe guard in this wonderful partnership.
@oledawg @OrcasThunder @floggingnotblogging If you read the whole thing, you would have noticed that part of the agreement is, that if the team or teams move then Chris Hansen will be required to purchase the building back for 200 million or pay to have it torn down. Therefore the city is not stuck with another Key Arena/useless asset.
 @Andy78  @OrcasThunder  @floggingnotblogging Wrong.
It will be paif BACK by those taxes and fees, but the initial $200 M has to come from current funds...the people's money.
 @OrcasThunder  @floggingnotblogging The difference is that this money is paid back and at the end the day the City acquires an asset, an arena and the land it sits on.  What other public use do you propose where this will happen?
@OrcasThunder @floggingnotblogging It is being paid for only by the people who attend events there or rent out the building to host events there. How does that not make sense? Obviously the people who attend want it there so they are paying for it!