Posted May 16 2012 2:14PM - Updated May 16 2012 5:31PM
SEATTLE (AP) -- Attempts to build an arena that could bring the NBA back to Seattle took another step forward on Wednesday when the city, King County and investor Chris Hansen announced a memorandum of understanding laying out the financial responsibilities for the proposed venue.
Unlike an original rough proposal unveiled in February, the agreement announced Wednesday indicates that construction on the facility could begin with only an NBA franchise having been acquired. Previously, officials had indicated that for the financing plan to work, both NBA and NHL franchises would be needed.
The goal is still to bring both professional sports to the Puget Sound region. But the project can move forward with only the NBA in hand, which is the focus of Hansen, a San Francisco hedge-fund manager and main investor in the project.
"We've been very honest with everybody that actually having an NBA and NHL team to sign agreements with ownership groups to move on the exact same day is pretty unlikely," Hansen said.
The agreement announced Wednesday now goes before the Seattle City Council and King County Council for approval.
The project calls for about $290 million in private investment from Hansen's group, along with $200 million from the city and county through 30-year bonds. Any franchise that comes to Seattle and uses the arena would be required to sign a non-relocation agreement that would span the life of those bonds. The bonds would be paid off through taxes and revenues generated by the arena, which would be owned by the municipalities.
All construction costs, including overruns, would be paid for by Hansen's private group -- ArenaCo -- along with all environmental studies and permitting. Once that process is completed, most of the public investment is placed on the city.
The MOU calls for an initial investment of $100 million by the city for acquisition of the project site. During a second investment window, the city would contribute another $20 million if both an NBA and NHL team are acquired, with the remaining $80 million in public investment being bonded by the county.
If only an NBA team is acquired, the public bonding would be capped at $120 million with $115 million coming from the city and only $5 million coming from the county.
"We have to keep taking steps along the way," Seattle Mayor Mike McGinn said. "I guess what I'm trying to say is it would be a real shot in the arm to our community to bring back the Sonics and that has value."
Specifications for the arena were also released. It would hold up to 19,000 for concerts, 18,500 for basketball and 17,500 for hockey and be constructed on a 700,000 square-foot location just south of downtown Seattle in the neighborhood where Safeco Field and CenturyLink Field were built.
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