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City of Seattle

County Executive, Mayor and Chris Hansen reach agreements for arena

King County Executive Dow Constantine and Seattle Mayor Mike McGinn, joined by private investor Chris Hansen, today announced agreements between the City, County and ArenaCo to govern the financing of a proposed new state-of-the-art, multi-purpose arena in the Stadium District of Seattle’s SoDo neighborhood.

Executive Constantine and Mayor McGinn detailed important taxpayer protections within the agreements in a joint letter to their respective Councils:

  • No new taxes are being sought for construction or operations;
  • The project will be self-financed by using revenue that would not otherwise exist but for the operations of the arena;
  • Binding non-relocation agreements for the NBA and NHL teams will be in place covering the full term of any public financing;
  • A security reserve fund will be established to provide an additional layer of taxpayer protection for the duration of the public debt;
  • Revenue sufficient to support annual debt service is guaranteed by the investors;
  • The private investors will be solely responsible for any cost overruns and operating revenue shortfalls over the life of the facility, including funding a capitol improvement fund;
  • No public funds will be committed until franchise acquisition and all environmental review and permitting processes are completed.

The City and County will be in a first priority payment position from Arena revenues and in the unlikely event of a financial default, will have a security guarantee in the equity of the parent company for the teams and the Arena operator.

“The commitment to invest upward of $800 million of private capital in the arena and purchase of two teams represents a strong vote of confidence in the future of our city and county, especially in this challenging economic climate. It is one of the largest commitments of private capital ever made for a project like this in North America,” the Executive and Mayor wrote in their joint letter about the agreements.

“This proposal also represents a unique opportunity in our region’s history,” they wrote. “The existing football and baseball stadiums in the Stadium District were developed as part of a community effort to keep our sports teams from relocating to a different region. With this proposal we have a positive opportunity to embrace new professional sports teams and a significant new private investment into our community.”

On transportation, the Executive and Mayor noted that “while there are challenges in the SoDo neighborhood, including freight mobility issues, let us not forget that it is the largest transportation hub in the region. Link light rail, a Sounder train line, three bus rapid transit lines, 21 Metro bus lines, nine Sound Transit Express bus lines, four ferry routes, two interstate freeways and a future deep bore tunnel converge in this neighborhood. There is no other site in the region that possesses the transportation assets that are unique to this area, which is a major reason the existing sports facilities are located there.”

The Executive and Mayor will transmit the proposed Memorandum of Understanding and the interlocal agreement to the Metropolitan King County Council and Seattle City Council, respectively, for review and adoption.

Photos by: Aaron Fishbone

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Posted by: April Thomas

Comments

Comment from Silver
Time May 17, 2012 at 12:13 pm

I think this MOU is bullet proof for all parties, it should be a no brainer for the council, lets right a wrong and help Cris Hansen get this done.

Comment from Steven
Time May 18, 2012 at 10:30 am

Why don’t we pay attention to education of our children,and not big money sports arenas,and player who only really care about the money they make,and not winning game.Once again the public is going to pay for this arena too,like the other two?its just not on documents the public see?????

Comment from Charles Warsinske
Time May 18, 2012 at 10:53 am

Sounds like it could work. How about a clause that requires the A/E design team and the general contractor be from Washington if not Seattle?

Comment from Tony
Time May 18, 2012 at 11:03 am

The transportation angle is not being sufficiently addressed. The statement here seems to gloss over the severe issue that the city has with traffic levels exceeding surface capacity and with the county’s cutbacks in public transit that are already posing increased challenges for daily users. Adding the transportation load of a new arena sounds like making a bad headache worse.

Comment from Linda
Time May 18, 2012 at 11:36 am

I think the city decision makers have not learned a thing from the past, and from other cities. Even though it appears to be within the guidelines of what was voted on, this still does not protect the taxpayer from ultimately paying the bill if this should all go under. Why don’t we just buy the land and lease it out like the UW does with Rainier Tower, etc and many other locations?

Comment from Diane
Time May 18, 2012 at 2:47 pm

What’s wrong with Key Arena? We are still paying for it. Still paying for First & Goal. Still paying for the Kingdome, right? Are we still paying on Safeco? or is that a done deal. Having a hard time filling those Mariner seats. Same might happen with basketball, if so, who come’s in to save the day? when the tickets don’t sell. What about congestion and the Port loosing customer’s to Tacoma and now possibly Everett. Does anyone know what it cost to have a Truck sit in traffic trying to haul container’s? I really have no interest in another stadium. I hardly have time to see a baseball game, trying to work to stay afloat in this economy. Too tired to Play.

Comment from James Martell
Time May 18, 2012 at 5:32 pm

People always start to comment on how they think money should be spent when it is tax dollars…Read the entire MOU this is not tax payer funded, it has safeguards in place that protect the public from paying one red cent….open your eyes there is no hidden documents the entire deal is being made transparent for everyone to read..as far as the traffic issue..It has been 22 years of bad government decisions regarding the traffic flow in the SODO area, the blame should not fall to this investment group.. it is with the city/county. how many times has the city tabled the plan for an overpass at lander, the port traffic grows every year and yet no commitment is made for real road improvements, this arena should have little impact on rush hour traffic, most NBA/NHL games dont start until after rush hour is over.. how long does it take for the crowd from a mariners nite game take to disipate from the SODO area…….the new stadium will seat far less people than either of the two outdoor stadiums…read up on a subject for once…

Comment from Mike Baker
Time May 19, 2012 at 6:16 pm

Let’s move forward now.

People coming to Seattle to spend money is still a good thing.

Comment from Joe Fowble
Time June 11, 2012 at 3:38 pm

Why did you two come to a 30 year term on the repayment of bonds ? CenturyLink was built with 20 year bonds secured by the tax revenue streams enacted to pay for it. Safeco was built with a financial model of 20 years. 30 years seems like a long time to be giving tax exemption to a for-profit business, especially with how quickly sports stadia need major rebuilds.

Comment from Steve
Time July 9, 2012 at 8:14 pm

Is there any possible circumstance under which the city would say no to big developers putting forward proposals for sports arenas? No matter what the offer on the table is, is there a worst time to build an arena for a team (or 2) we don’t have? What is going on here? Build it and they will come? What kind of lame “faith based” planning is this? And on top of it, think for a minute that it benefits the tax payers? I am appalled at this level of mismanagement of seattleites trust. Ridiculous. Just say no and move on. Pay for a seawall and a school or two. Look out for the citizens that elected you. And if the people in Bellevue want a team and an arena, let them go for it.

Comment from irrelevent
Time September 17, 2012 at 9:55 am

The city lets the port of seattle give discounts to china shiping forcing our libraries and schools to close early cuz the property taxes get raided to cover the bond payments to the bank for the 4 new cruiseterminals while c.e.o. of port conspires to gurantte we the locals pay the cost of the ports use so Expeditors and others can get windfall profits using port at virtually no cost thanks to ports treasonous capitulation at negotiation table

Comment from irrelevent
Time September 17, 2012 at 9:56 am

So now we pay $200 million to finance corporate welfare.

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