For weeks we’ve been wondering what Chris Hansen’s endgame was as he continued to buy up parcels of land in SoDo surrounding the spot he intended to build his sports arena. Because the city council has voted against a street vacation for Occidental Avenue, it appeared that his options given the current Memorandum of Understanding with Seattle were slim.
Well now we know what Hansen has been thinking. He wants to rip the MOU up and just pay for the whole damn thing himself.
Hansen and his investment team have sent a letter to Seattle mayor Ed Murray, King County Executive Dow Constantine, and Seattle City Council-members, stating that they are willing to build the arena "at no cost to the City or the County." That’s a stunning departure from the original proposal which included $200 million in bonds that would be paid back to the city and county. The letter is signed by Hansen, Wally Walker, and Pete and Erik Nordstrom.
Hansen’s group currently own 12.65 acres, 16 properties, and more than 551,000 square feet in SoDo. Their proposed arena would be built between 1st Avenue South and Occidental Avenue at Holgate Street.
As always, there’s one catch. The city will have to vacate that aforementioned one-block stretch of Occidental Avenue and provide tax credits to the project.
The letter also notes that the group would still commit to compensation for the vacated street that would then help pay for the Lander Street Overpass project. The group had previously agreed to pay $18-20 million for the street vacation and Lander overpass project.
"The recession is behind us and we are deep into this new economic cycle," the letter states. "Interest rates have declined and the NBA has completed its new national television contract, creating more financial certainty in the industry.
"These considerations lead us to suggest a new proposal. Our goal has always been to return the NBA to Seattle and to build a new arena to make that possible. Our partnership with the City and County started five years ago was based on a recognition that private financing of a new arena in the prevailing economic conditions was not economically feasible. The goal of this partnership was to build the arena and bring an NBA team to Seattle. Public financing was simply a mechanism that made that possible at the time.
"We have concluded that a changed economic climate makes possible the private financing of the arena. For that reason, and to address concerns expressed by City Council members, we would consider revising the street vacation petition to eliminate public financing of the arena. In such a case the MOU would be terminated and the rights and obligations of the parties under the MOU would end. The City and the County would recoup the $200 million in debt capacity and tax revenue streams generated by the arena would cease to be encumbered for arena debt service."
K5’s Chris Daniels spoke to Council-member Tim Burgess, who said "In order for us to reconsider we urged them to remove public financing from the project, and they've done that, so the ball is back in our court." SDOT Director Scott Kubly declined comment on the letter.
In case you were wondering if Chris Hansen was giving up in his quest to bring the Sonics back to Seattle, you now have your answer.
UPDATE: Hansen has posted his own message to SonicsArena.com outlining the plan.
First, we will direct contributions to a package of additional SODO traffic improvements, which will improve freight mobility through the area.
Second, we agreed to commit future payment of compensation for the vacated street to the city’s financing package for the Lander Street Overpass, thereby helping to close the funding gap for that important project.
Finally, we have agreed to revising the street vacation petition to eliminate public financing of the Arena. Terminating the MOU would allow the city and county to recoup the $200 million in debt capacity and free-up Arena tax-generated revenue streams.
To make this all possible we have asked for approval of a revised conditional street vacation, a waiver of the city’s admissions tax, which has been granted for the other sports venues in Seattle, and an adjustment of the city’s B&O tax for revenue generated out of town.
- Seattle Arena group offers to privately finance arena, fix Lander Street [K5]
- Chris Hansen will not stop until he owns all of SoDo [CS]
- Chris Hansen somehow found more SoDo he didn’t own. Now he does. [CS]
- Seattle City Council Says No to SoDo Arena Street Vacation [CS]
- Latest Seattle Arena Designs Include Pedestrian & Bike Bridge [CS]
- South Lander Street Bridge project designs looking for feedback [CS]