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City of Seattle

February 16, 3:50 PM click here to comment > 20

Mayor and County Executive announce new, self-funded arena proposal

Seattle Mayor Mike McGinn and King County Executive Dow Constantine today announced that a private investor, Christopher Hansen, has sent a proposal to the City and County to construct a new arena in Seattle’s Stadium District with the ability to host an NBA and NHL team. Together, the Executive and Mayor also appointed a panel of community leaders and finance experts to evaluate Mr. Hansen’s proposal.


Click to watch Executive Constantine and Mayor McGinn’s press conference

In his letter, Mr. Hansen proposes to raise $290 million in private investment for the facility. In addition, he and his investor group would bear the costs associated with acquiring an NBA team and seek a partner who would recruit an NHL team to the new facility. The remaining arena development and construction costs would be financed by a combination of tax revenues generated by the facility, and property and rental income paid by the teams.

Executive Constantine and Mayor McGinn said that any agreement eventually reached by the City, County and the private investor must adhere to the following principles:

• A new arena must be self-funding, and not rely on new taxes;
• Existing City and County funds and services would not be adversely impacted;
• Private investors would bear risk against revenue shortfalls;
• Any project cost overruns will be the responsibility of private investors;
• Private funding should be provided for a study of ways that Key Arena can be modified to keep it a financially successful part of Seattle Center.

“This is great news for Seattle,” said 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. And I think that the work by City and County staff, combined with outside expertise on arena financing, have resulted in a proposal that protects our city general fund from any negative impacts and protects the city into the future, should there be any revenue shortfalls. And more work needs to be done. I look forward to the Review Panel’s report to our respective legislative bodies as they bring their financial experience and expertise to bear on this proposal.”

“When someone comes forward and offers to put up nearly $300 million of private money and bring the NBA back to the city of his birth — that’s something you have to look at very seriously,” said Executive Constantine. “I strongly support returning NBA basketball to King County and, particularly these days, such a proposal would need to be self-funding. On first read, it appears Mr. Hansen’s proposal meets that requirement, but we’re asking our review panel to make sure.”

“If successful, we believe our effort would represent one of the largest private investments ever made in a new arena in North America and would provide a significant source of job and economic growth for the region,” said Hansen in his letter.

Mayor McGinn and Executive Constantine have directed the Arena Advisory Panel they appointed to review the financing and other details of the proposal to ensure that the proposal is in the best interest of the public. The Panel is asked to submit its findings and report to the County Executive and Mayor in March. The Panel will be comprised of the following members:

• Jan Drago, co-chair – former Seattle and King County Councilmember
• Maud Daudon, co-chair – CEO and President of Seattle Northwest Securities Corporation; former Seattle deputy mayor and chief of staff
• Lenny Wilkens, co-chair – NBA Hall of Famer and former SuperSonics coach
• David Freiboth – executive secretary of the ML King County Labor Council.
• Doris Koo – former president and CEO of Enterprise Community Partners
• Karen Lee – CEO of Pioneer Human Services
• Estela Ortega – executive director of El Centro de la Raza
• Greg Smith – founder and CEO of Urban Visions
• Anthony R. Miles – partner in the Seattle law office of Stoel Rives LLP
• Dr. Jill Wakefield – Chancellor of Seattle Community Colleges

Background information for each panelist, the Panel’s charter and other associated media materials regarding today’s announcement can be found at seattle.gov/media.

If a memorandum of understanding can be reached between Mr. Hansen, the City, and the County, a proposal could be considered by the Seattle City Council and the Metropolitan King County Council respectively this spring.

For more information on the proposal, visit seattle.gov/mayor/media/.

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Posted by: Robert Cruickshank

Comments

Comment from Jerrya
Time February 16, 2012 at 4:17 pm

It would be great if this works, I am not an NBA fan, but a fan of the Coyotes NHL club (Phoenix native) and if this would come true, that they come here, season tickets would be assured! Thanks for bringing the possibility here!

Comment from Rich
Time February 16, 2012 at 4:26 pm

I am a supporter of the mayor, but where is the mention of the $200 MILLION in public funds that are being provided, found in the first paragraph of the Seattle Times story (http://seattletimes.nwsource.com/html/localnews/2017525119_arena17m.html), later referred to as being “repaid” through tax revenue, etc.? If this is wrong information, how did it appear in the Times? If it’s correct, why does this information above not mention it and call the project “self-funded”? That seems mighty disingenuous to me, and very disappointing! Why are the city and county (again) throwing PUBLIC monies in a tight economy towards a PRIVATE business? Can all businesses pony up to the trough?

Comment from Steven
Time February 16, 2012 at 4:32 pm

Lets get a basketball team that wins games .So go slow picking a team,we already got two losing teams that really don’t need the top of the line arena they have!!

Comment from Phil
Time February 16, 2012 at 4:35 pm

We do not need another “publicly-owned, multi-purpose facility that hosts a vvariety of recreational and cultural events for the benefit of the entire region.” If someone wants to build a facility, hire performers, and sell tickets to their performances, he should purchase some property, build his facility, and operate his private business like any other.

Comment from CoeTug
Time February 16, 2012 at 4:49 pm

We are supposed to believe this? We already tax support two football stadiums, a baseball stadium and an arena. With tax money paying for them even though it is hidden. We are supposed to believe that private developers are going to bulid it for $300 million. We get stuck for road development, traffic jams, police and fire while there are lots of areas of the city with no sidewalks, crappy bus service and pot-holes all over. And the facilities sit empty, the employees are poorly paid scabs.

Comment from Jim Cissell
Time February 16, 2012 at 4:55 pm

Nice speach, Dow. You done the Law School proud. But you’ve got to get rid of that tie. It’s driving the video camera crazy. Go, Sonics! Holler if I can help.

Comment from Bill Duroe
Time February 16, 2012 at 5:38 pm

I note no impact on general fund, both city & county?? I would prefer No Public Funds!! No tax deferrals!! No Tax exemptions!! No dedicated taxes!!

Having experienced colorectal procedures with baseball bats, footballs, streetcars, tunnels, & Mercer realignments, I get very anxious when I see 1%ers bearing gifts.

Comment from Ardith
Time February 16, 2012 at 6:56 pm

Why is it that sports is what everyone thinks is going to kick-start our state? If someone wants to have a stadium for some type of sports, why don’t they use only their money to do so and leave the state out of it? How much revenue from our other two stadiums are we getting? Especially from the one that voters voted DOWN twice! I’m really tired of our taxpayer money being wasted for something that all residents of our state won’t use but will have tax dollars collected. There may not be new taxes now but you can bet before it gets started they will start upping taxes to cover the $200 million that isn’t being covered by the private sector!

Comment from Bill Barbera
Time February 16, 2012 at 9:31 pm

I do not wish to see ANY public funds from the city or county or state or country go towards this stadium!!!
Or in the form of tax rebates or any sneaky way the private investor and cronies political or otherwise dream up.

Comment from Bob
Time February 16, 2012 at 10:13 pm

I have to agree with Rich’s comments above; Why no mention of the $200,000,000 in public funds? City Council members are asking the right questions. We need to see specifics with regard to tax revenue assumptions that you say will repay that $200 mil. And for once, let’s do a detailed Failure Mode Analysis on the whole deal and base assumptions on worst case, not best case scenarios.

Comment from BJN
Time February 17, 2012 at 8:12 am

Seattle needs to stop building arenas when the Seattle schools are facing deficits, homelessness is increasing, food banks are empty, and the streets need repairs. The new millennium brought with it an era of austerity. This is no time to build play rooms for the rich.

Comment from Mitchell
Time February 17, 2012 at 8:20 am

This City has been a shell of it’s former self since the Sonics left the Key. It’s full of bitterness and a lack of unity. These comments above represent the type of negative attitude…”Seattle Freeze” that I have grown to despise. No let bring back the pride of our city along with a economic boom we so despartely need in the downtown area.

Comment from Holly
Time February 17, 2012 at 8:39 am

We already have a basketball team called The Storm. Yes, WNBA, which although has underpaid players, has some of the most talented players in the world! Furthermore, they can share Key Arena. Please don’t use any tax dollars for this venture at this time. Neither investment dollars nor maintenance.

Comment from Exeter
Time February 17, 2012 at 1:05 pm

Great! Just what we need is ANOTHER sports stadium, paying homage to millionaires and causing even MORE traffic problems. And I agree with “Rich” and his comment on February 16, 2012 at 4:26 pm, about the financing questions that are unanswered. I have also been a supporter of the Mayor, but this time I vote no! Which in itself is ironic, because even if this comes to a vote, the outcome will be disregarded. (think the Monorail, Safeco field, etc.)

Comment from Fred
Time February 17, 2012 at 9:08 pm

We’re entering a new era in which the criteria for decision making has to take into account what earth systems– our land, water and air can handle. This is not just an economic and political decision. It is a moral decision as well and it’s time we think hard about what we need rather than what we want. Growth for the sake of growth is the ideology of a cancer cell (E. Abbey)

Comment from Bill Beyers
Time February 17, 2012 at 9:46 pm

No regional economists are on this panel.
No framework is laid out for how it is to evaluate economic impacts of this project to assure that estimates of tax revenues are not just a shift of impacts of spending from existing consumption streams to this project by local residents. It does not identify how “new money” would be measured.

Pingback from Thiel: Will Ballmer be eager to drive Poach Coach? | Sportspress Northwest
Time February 18, 2012 at 9:55 am

[…] And as far as I can tell, the trigger event is poaching an NBA team from another city. Even though Mayor Mike McGinn and others said Thursday it would require poaching an NHL team as well, the concurrent acquisitions […]

Comment from Do people not read?
Time March 2, 2012 at 2:21 pm

The public money involved is $200 M in FINANCING (read: a loan — team owners would repay the city and county’s $200 million debt through rents and taxes, including sales, property, admissions and business-and-occupation taxes generated by the arena.). The private investors are responsible for paying it back and for any cost overruns. There is zero money taken from the general funds at the state and local levels.

http://seattletimes.nwsource.com/html/localnews/2017544323_arena19m.html

Comment from David Geoffrion
Time March 7, 2012 at 8:10 pm

Seems like a mistake to try and stuff it all into the SODO district. What a traffic nightmare, when more than one event is going on at the same time.

Comment from Bill Bradburd
Time March 8, 2012 at 10:31 am

For the person posting as “Do people not read?”

there is a slight of hand going on here. Taxes that the stadium would pay to the city – $200M+ – are being diverted to pay off their construction loan.

I see this as taking $200M from the general fund.

McGinn will call this taxes that wouldn’t be there if the stadium wasn’t there. Maybe. But those taxes would have been spent elsewhere (with the Mariners, or buying a boat, or whatever). There is not magic money being made here.

The deal is a scam against the citizens of Seattle and a $200M gift to “Mr Hansen”.

He’s a hedge fund manager – the same class of folks that bamboozled the U.S. and created our current financial crisis. Don’t be a gullible dupe…