Office of the Mayor/Flickr
Kris Brannon, AKA “The Sonics Guy,” is the hardest working fan in Seattle, and he’s not even from here. He lives in Tacoma, where he has day duties as the manager of Tacoma’s Comedy Underground. But when there’s an event happening in Seattle concerning the proposed Sonics arena, Brannon is sitting front and center, a steely gaze stretched across his face.
Four years ago, when the Seattle Sonics left for Oklahoma City, Brannon began to draw attention to getting a team back. “It’s been a long road,” Brannon said over the phone. But once San Francisco hedge fund manager Chris Hansen got involved, Brannon started to pick up the pace. He stated an initiative (I-1158) to change the state song from Washington, Our Home to the basketball-related Not in Our House by Sir-Mix-A-Lot. “It was a friendly initiative,” Brannon said. “Once we got a team, the song would be changed back.” The initiative, however, would eventually fizzle out due to a lack of signatures.
As it stands, Seattle is 10 votes away (five city council and five King County Council members) from approving the memorandum of understanding that proposes to build a 700,000 square foot, multi-purpose arena south of Safeco Field. The county council has put the issue on its agenda for today (July 30). Town hall meetings have been split between die-hard supporters and vehement naysayers criticizing Hansen and his investment group, which now includes Microsoft CEO, Steve Ballmer and two members on the Nordstrom family.
“We have a choice here. It’s a proposal,” Seattle City Council Member Mike O’Brien responded to a woman wondering how Seattle could even listen to the deal.
Public awareness has grown immensely in recent months, but as the date to vote on Hansen's Memorandum of Understanding (MOU) approaches in early August, the process has slowed to a crawl.
At a recent town hall meeting at North Seattle Community College, many voiced questions as to why KeyArena couldn’t support another team as it has before.
The theme has been persistent one among parts of the public although there appears to be no serious discussion of the idea among those close to the discussions. “It’s not just Chris that said the [Key] arena is not effective. The NBA has said it’s not a suitable location,” said a spokesperson for Gogerty Marriot, the PR firm working with Chris Hansen. KeyArena’s structural problems prevent it from becoming a place to house a professional basketball team. When it was remodeled in 1995, it was still the smallest arena in the NBA.
Even if KeyArena were to be used, it would need to be remodeled again for it to fit the mold of other basketball arenas around the country, some of which more resemble shopping centers than basketball courts. The NBA has said it will not allow the sale of a team to Seattle if KeyArena is to be used for the long term.
While the NBA does see KeyArena as a suitable location for a team to play while a new arena is built, officials do not believe a team could play in the UW's Alaska Airlines Arena or the Tacoma Dome in the interim if Key were to be remodeled, the spokesperson working with Hansen said. However, as detailed in the MOU, Hansen's ArenaCo will discuss repurposing KeyArena for the future once the proposed Sodo facility is complete.
Some members of City Council are skeptical as to how committed Hansen is to all that he promises. “What’s odd is that it was negotiated in public instead of discussing alternatives with us,” said City Councilmember Richard Conlin. “It’s difficult to know how serious they are.”
It's no surprise that there are such concerns. Seattle is one of a handful of cities that has experienced the agony of seeing its basketball team taken away, the only Seattle men's professional sports team to win a national championship since nearly a century ago. The sale of the team to Oklahoma businessman Clay Bennett by Starbucks’ CEO Howard Schultz continues to raise the ire of many sports fans frustrated with owners forgoing team loyalty in lieu of making a quick buck. But supporters of this deal like distinguish it from the rest. And in Seattle, the difference in the financing of the proposed arena compared to Century Link and Safeco is drastic.
ArenaCo is offering $290 million in private funding plus $350 million to acquire an NBA team. ArenaCo will cover all cost overruns, and the public debt will be repaid by taxes on the arena and arena activity. Public financing is capped. If only an NBA team is acquired, the city will put up $115 million in bonds and the county $5 million. If both a NBA and NHL team are purchased, the city will have $120 million in bonds to the county’s $80 million. Safeco Field ran the public $320 million next to the Mariners $75 million .Century Link/Quest Field took $300 million from the public and $130 of private financing. Both teams paid more for cost overruns.
ArenaCo has also drafted a non-relocation clause that stipulates any NBA and/or NHL team will be at the Sodo arena for the duration of the arena lease of 30 years.
Justin Marlowe, an assistant professor of the University of Washington’s Evans School of Public Affairs, says the proposed SoDo deal is the best he’s ever seen. “With respect to the structure of the transaction and looking at this one compared to others out there… the way that the risks are shared, it’s a very good deal,” Marlowe said. The King County Council commissioned Marlow to provide an expert review of the proposal, his role being to look at the public-private partnership, public capital markets, and debt transactions.
By issuing public bonds, the city and county would own the land and the arena while leasing it to ArenaCo. If the deal were to crumble, both the city and county have claims on team assets and would be awarded revenue on a sale of the team. “It’s rare to see these security reserves,” Marlowe said.
There is also the issue of effects on economic activity in the neighborhood, including the movement of goods to and from the Port of Seattle. It is too early to tell what effects, if any, another arena would have on business in SoDo. County Council Member Bob Ferguson has called for an amendment to the MOU mandating an economic impact analysis to be conducted.
“The development of an NBA and NHL arena has the potential to impact important segments of our economy, including construction, tourism, and maritime industries. We must take an independent look to evaluate the impacts — positive and negative — on the region’s economy,” Ferguson said in a press release.
Tax revenues generated by the arena would certainly be a boon to public coffers, but as for Sodo business, it’s murky indeed. “It’s difficult to truly evaluate that on a short time frame and limited data,” Marlowe said when asked about the financial opportunities Seattle would gain by building a third arena in South Seattle. “The real gain is that the Sonics would be back.”
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