Sides reach accord on new NBA arena
Attempts to build a nearly $500 million arena that could bring the NBA back to Seattle took another step forward on Wednesday.
And if an NHL team turns out to not be part of the equation, the public investment will be less than originally projected.
The City of Seattle, King County and private investor Chris Hansen announced a memorandum of understanding on Wednesday laying out the financial responsibilities for the proposed venue just south of downtown in the same neighborhood with Safeco Field and CenturyLink Field.
The proposal included two significant changes, the result of three months of negotiations between Hansen and the local governments, from the original unveiled in February. The agreement indicates that construction on the facility could begin with only an NBA franchise on board. Previously, it was thought that an NHL franchise would also need to be a committed tenant to make the plan work.
The plan calls for nearly $300 million in private investment from Hansen’s group. The amount of public support would be capped at $120 million if only the NBA is coming to the Puget Sound region. It would be $200 million if both NBA and NHL franchises are involved.
The goal remains to bring both professional leagues, but the project can move forward with only the NBA in hand, which is the focus for Hansen, the San Francisco hedge-fund manager and Seattle native who is the main investor.
“Our job is, as soon as possible, when we have an agreement in place, we’ll be very aggressive in our efforts to make sure that everybody knows that we would like to have a franchise back here,” Hansen said.
The agreement now goes before the Seattle City Council and King County Council for review. Both governments would need to approve the agreement for the project to proceed. No construction would begin until after a franchise has been acquired.
Other little nuggets are laid out within the 24-page MOU, including the bullet point that any NBA team using the facility will have to be named the SuperSonics, subject to NBA approval. Hansen included a side letter in which he suggests that KeyArena would be used for up to two years as a temporary home with a handful of upgrades paid for by Hansen’s investor group, ArenaCo. Following its use as a temporary facility, Hansen suggests KeyArena could become a smaller arena, a theater venue or exhibition center.
But the bulk of the MOU focused on the financial details of the public investment, which is to be paid for through taxes and revenues generated by the new arena and has a number of public protections included.
The project calls for about $290 million in private investment from Hansen’s group, along with $200 million from the city and county through 30-year bonds. Any franchise that moves to Seattle and uses the arena would be required to sign a non-relocation agreement that would span the life of those bonds.
All construction costs, including overruns, would be paid for by Hansen’s group, along with all environmental studies and permitting.
Specifications for the arena call for up to 19,000 seats for concerts, 18,500 for basketball and 17,500 for hockey.