Basketball fans are delighted. Hockey fans? Hopeful. And even construction folks have a little to eagerly anticipate as an announcement last week signaled the first real moves in brining both an NBA and NHL franchise to Seattle, franchises that require a newly constructed arena to call home.
Seattle Mayor Mike McGinn and King County Executive Dow Constantine gleefully unveiled a plan that involved a nearly $500 million arena for Seattle’s Sodo neighborhood (next door to the already existing CenturyLink Field and Safeco Field).
Led by self-effacing Christopher Hansen, a Seattle native who runs a wildly successful hedge fund in San Francisco, a group of private investors has offered to put up $290 million, if the city will allow the use of $200 million raised by fees and taxes on the new facility, to build the arena on property Hansen has already purchased.
As Seattle and King County officials clamor to sell the proposal to the public, which falls in line with a 2006 vote on Initiative 91, requiring the city to make money on any sports arena investment, the money offered by Hansen would signify the third-highest private investment in a professional sports arena anywhere in the country, according to the Seattle Times.
This is great news for Seattle,” says McGinn. “On first look, we have an exciting proposal that, if successful, would mean hundreds of millions of dollars of private investment in our city—an investment that means even more during our city’s fragile economic recovery.”
Ever since Seattle voters and city officials refused the NBA’s Sonics a new taxpayer-funded arena and the team bolted for Oklahoma City in 2008, Seattle sports fans have talked about how to lure a team back. But the bottom line, from 2006 until now, was that it would take a new arena to pull a team away from another city (the NBA has no plans to expand its number of teams). And with the local government holding fast on its promise to not take a bath on the construction of a facility, it took a group such as Hansen’s to step in and get Seattle all excited about 18,000 seats inside a bowl-like setting.
While promising, this deal isn’t anywhere close to done. City officials must fully sign off on it (but how could they not when the $200 million they must put up comes fully from revenues the arena makes, money that wouldn’t exist without the arena in the first place?). The more difficult coup involves Hansen drawing an NBA team (Sacramento, anyone?) to Seattle and enlisting interested parties to also move an NHL team (league-owned Phoenix comes to mind) to Seattle, as the arena would need both franchises in order to be financially feasible, Hansen says.
If this all goes as planned, once an NBA team gets secured, Hansen’s group can start the two-year process of building a new arena, bringing local construction jobs to the area. In the meantime, the team would play in the outdated KeyArena structure near the Space Needle.
If this works out, the Seattle agreement signifies a shift in how a city can exert control over the private entities that often hold the city hostage with the emotional ties of sports franchises. By requiring private investors bear all the risks of construction overruns and revenue shortfalls, the city may just pull the largest coup of all: a new arena filled by two professional franchises.