King County Council to scrutinize proposed arena package
May 18, 2012
By Warren Kagarise
NEW — 8 a.m. May 18, 2012
King County Council members intend to scrutinize a proposal to build a $490 million sports and entertainment arena in Seattle to determine if financing for the plan is feasible and if arena-related traffic could harm other businesses in the area.
County Executive Dow Constantine and Seattle Mayor Mike McGinn, joined by investor Chris Hansen, a San Francisco hedge fund manager, on Tuesday announced agreements between the county, city and the ArenaCo investment group to govern financing for a proposed arena near Safeco Field.
The proposal heads to the County Council and the Seattle City Council for additional study.
The investment group intends to contribute $290 million to construction and more than $500 million to purchase a National Basketball Association franchise. Investors also hope to land a National Hockey League team for the arena.
Constantine and McGinn said the project includes protections for taxpayers.
The proposal does not include additional taxes for construction or operations. Revenue sufficient to support annual debt service is guaranteed by the investors.
In addition, no public funds can be committed until a basketball franchise is acquired, and the environmental review and permitting process is complete.
The proposal includes binding nonrelocation agreements for the NBA and NHL teams to cover the full term of any public financing.
Investors agreed to be solely responsible for any cost overruns and operating revenue shortfalls over the life of the facility.
“The commitment to invest upward of $800 million of private capital in the arena and purchase of two teams represents a strong vote of confidence in the future of our city and county, especially in this challenging economic climate. It is one of the largest commitments of private capital ever made for a project like this in North America,” Constantine and McGinn wrote in their joint letter about the agreements.
County Councilman Regan Dunn said the proposal requires scrutiny from the council. (Dunn represents rural areas south of Issaquah and Newcastle on the council.)
“In the coming weeks I will work with my colleagues on the council to see that this proposal is thoroughly vetted to ensure the county’s interests are protected,” he said in a statement.
County Councilman Joe McDermott, Budget and Fiscal Management Committee chairman, said although “this is an exciting proposition, but of course there are many questions yet to be answered.”
“I look forward to a robust discussion and to continuing to work with the city, the executive and Mr. Hansen as we move forward,” he continued in a statement. “I thank all of them for their hard work and dedication.”
Constantine and McGinn praised the proposal as a way to bring NBA basketball back to Seattle.
In 2008, team owners relocated the Sonics from Seattle to Oklahoma City — and renamed the Sonics as the Thunder.
“This proposal also represents a unique opportunity in our region’s history,” Constantine and McGinn wrote. “The existing football and baseball stadiums in the Stadium District were developed as part of a community effort to keep our sports teams from relocating to a different region. With this proposal we have a positive opportunity to embrace new professional sports teams and a significant new private investment into our community.”
On transportation, the executive and mayor said challenges exist in the neighborhood around the stadium, “let us not forget that it is the largest transportation hub in the region. Link light rail, a Sounder train line, three bus rapid transit lines, 21 Metro bus lines, nine Sound Transit Express bus lines, four ferry routes, two interstate freeways and a future deep bore tunnel converge in this neighborhood. There is no other site in the region that possesses the transportation assets that are unique to this area, which is a major reason the existing sports facilities are located there.”