Seattle City Council backs deal to build NBA arena
POSTED: Sep 11, 2012 11:33 AM ET
UPDATED: Sep 11, 2012 5:13 PM ET
SEATTLE (AP) — Efforts to bring the NBA back to Seattle took a giant step forward in a revised arena deal announced Tuesday, with investor Chris Hansen agreeing to kick in more money for transportation improvements near a proposed new arena, personally guaranteeing the city's debt -- and offering to buy everyone a beer.
The plan for the $490 million arena, which could also host an NHL team, represents the best shot at bringing the NBA back to Seattle. The SuperSonics ended their 41-year run here in 2008 and skipped town for Oklahoma City, where they became the Thunder.
Though formal votes are still required, Tuesday's announcement effectively gave Hansen, a San Francisco hedge-fund manager, and his fellow investors, including Microsoft CEO Steve Ballmer and Peter and Erik Nordstrom, of the department store clan, the green light to begin shopping for an NBA team.
The deal calls for $200 million in public financing to be paid back by arena-related taxes and rent. Under new terms announced by the City Council, Hansen would double to $30 million the reserves required to be kept on hand in case the arena's finances don't perform as expected.
Should the reserve run dry, Hansen would cover the balance himself. He agreed to be independently audited to assure that he's worth at least $300 million.
And at the end of the 30-year use agreement for the new arena, the city could force Hansen to buy it back for $200 million or make him pay to have it torn down should the team move on.
The three City Council members who announced the deal said the new terms mark a significant improvement for taxpayers over the original deal reached between Hansen and Mayor Mike McGinn in May. A council committee is expected to vote on the agreement Thursday, and the full council could vote as early as Monday. The King County Council already approved the earlier deal but would have to approve the changes as well.
"This agreement could fundamentally change the model of how public-private partnerships involving sports franchises are structured," said Councilman Tim Burgess.
Hansen, a Seattle native, early Facebook investor and big Sonics fan, said the talks were difficult, but that he was happy to be able to find common ground with the council. He thanked the fans who supported him through the process, and -- though not actually part of the deal -- he offered to buy a celebratory beer for anyone who shows up on Thursday evening at FX McRory's, a bar near the planned site of the arena.
The initial plan for the deal drew objections from the Port of Seattle, which expressed fears that putting a third sports facility in the neighborhood south of downtown -- next to the Seahawks and Mariners stadiums - would choke crucial transportation corridors that support 30,000 jobs in the region and generate $3 billion in annual revenue.
The new agreement calls for $40 million to be put into an account to improve the mobility of freight in the area, an amount state Rep. Judy Clibborn described as a down payment that could be used to recruit further investments from the port and other organizations.
The port issued a statement Tuesday saying it would review the deal. The statement said the Port of Seattle Commission appreciates the council's efforts to revise the original proposal to respond to concerns.
The deal also includes $7 million in new money for KeyArena, where the Sonics used to play. The city would have sole discretion over spending that money.
Kris Brannon, a fan better known as "Sonics Guy," attended the news conference decked out entirely in Sonics yellow and green.
"I'm just overjoyed," he said. "Chris Hansen is just like us. He's a fan, and he wants to bring basketball back to Seattle."