Seattle’s Ambitious Arena Plan

A proposal to build a $500 million arena in Seattle hinges on city and county approval for $200 million in matching funds and two professional sports franchises to agree to move into it and pay rent. If the plan comes to fruition, it would represent the third-highest private investment in such a venue behind Staples Center and Madison Square Garden.

Seattle has been without an arena anchor since the SuperSonics moved to Oklahoma City in 2008. Acquiring both an NBA and NHL franchise, on which the proposal hinges, might be the biggest hurdle for hedge fund manager Christopher Hansen and Seattle officials to overcome.

Hansen submitted a proposal Feb. 16 calling for $290 million in private investment toward construction of a $450 million to $500 million arena, with his group responsible for the purchase of an NBA team and for finding a partner interested in an NHL team as well.

Seattle’s investment would be capped at $200 million, to come from rental fees and other income. Officials are adamant that now new public taxes be used for the building. Cost overruns would be borne by Hansen’s group.
The proposal must go first before a review board that includes onetime Seattle SuperSonics star Lenny Wilkens. King County exec Dow Constantine hopes the review can be completed within a month.

The proposed arena would be built on land owned by Hansen and near CenturyLink Field and Safeco Field. But the first shovel won’t turn until an anchor tenant is secured with a 30-year lease agreement that includes a no-relocation clause. Financing projections depend on securing both a basketball and hockey team.

Where those teams would come from will depend significantly on what happens in other cities competing for sports franchises or struggling to hang on to the ones they have.

Sacramento, Calif., falls in the latter category. The city’s Kings made noise suggesting the NBA team was about to bolt for Anaheim unless it got a new home. It was placated – for now – by attempts by city leaders including mayor and former hoops star Kevin Johnson to build a new venue. However, those plans are snagging on parking issues.

The NBA’s New Orleans Hornets are owned by the league, which has made it clear it prefers a private, but local, owner step up. The same goes for the NHL’s Phoenix Coyotes.

Think BIG Sacramento, a regional initiative for a new arena launched by Johnson, was quick to howl when Hansen’s proposal was made public, calling the moves “publicity stunts aimed at derailing Sacramento’s process to build an arena.”

Seattle Mayor Mike McGinn appeared to stay out of the fray, reiterating that without two teams locked in place, there is no arena. And the responsibility for acquiring them lies with Hansen.

“I’m out of the prediction business. I’m not going into the prediction business on this one,” McGinn said after the press conference announcing the proposal.