Chris Hansen: Enough patience for Seattle process?

In an exclusive interview, the hedge-fund manager discusses traffic, what he sees as the unfairness of putting all traffic fixes on a sports arena, a sports entertainment district, and his own role.
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CenturyLink and Safeco Field could be joined by a sports arena.

In an exclusive interview, the hedge-fund manager discusses traffic, what he sees as the unfairness of putting all traffic fixes on a sports arena, a sports entertainment district, and his own role.

Chris Hansen describes himself as a patient guy who takes a long term view of everything in his charge.

Which is good, because he's beginning to feel just a bit annoyed at the process of getting his proposed arena project off the ground.

"So much attention on one thing," he said, offering a small smile over lunch last Thursday (April 26). He is hoping to advance the public discussion beyond the issues of traffic and parking that have spawned dismay from the Mariners, the Port of Seattle, the industrial council -- his would-be neighbors in SoDo.

But it's not as if his day job as a hedge-fund manager has left him with no experience in the bruising give-and-take of business.

"I have a very thick skin - I have to in my business," he said. "I’m happy to be engaged in this for four, five or six years, however long it takes to nurture the project, as required."

So for basketball fans lamenting the loss of the Sonics, don't worry: He's not flinching. But beyond the more modest issues of strident words and narrow media focus is a serious matter: Who pays for whatever street upgrades are necessary to placate SoDo's aggrieved parties?

It won't be him. And the city is staying mum.

In an exclusive, lengthy interview with Sportspress Northwest -- portions are below and the the full transcript is in two parts, here and here, on  -- Hansen said he doesn't know yet what the resolution will be. He's funding a traffic study, due in about a month, to find out more, but is unlikely to be the only or even primary source of cash for needs that some say could run more than $100 million.

"If someone tries to put me on the hook for an infrastructure project of this magnitude that should be undertaken by the city, it would make this project not viable," he said. "If you tack that onto the cost of an arena, it would be unrealistic."

The issue has come up because a previous city project designed to alleviate SoDo traffic congestion had its funding diverted several years ago to the Mercer Street improvement project. The recession and its subsequent loss of tax revenues has constrained the city budget to re-fund the SoDo fix, chiefly a "flyover" of the railroad tracks on Lander Street, just south of the proposed arena site, that would keep auto traffic from snarling at a busy railroad crossing.

Beyond the issues of convenience for sports fans and teams, the arena project raises big urban-planning questions for the future of SoDo.

As Hansen put it, "There's only one way for downtown to grow."

He and others see the aging industrial district as the future home for high-tech and other businesses to replace the maritime and blue-collar businesses that have long occupied the city's south end. The development of light rail, a streetcar system, and the end of the Alaskan Way viaduct open up opportunities and problems for current and future businesses.

In the interview, Hansen declined to talk about prospects for team relocation or who will join him in a partnership to build the arena and purchase teams if and when they become available.

He did say that most plugged-in Seattleites will be familiar with the names on his short list -- should the dream be realized.

"Right now, there's nothing to sign up to," Hansen said. "I’m not under any pressure to put a group together. I’m financing the land acquisition myself.

"There will be plenty of household names on the list. I think you (media) should rest assured that a lot of the right people are interested."

Meantime, he said negotiations over details in the memorandum of understanding between him, the city and King County are going smoothly: "All parties have stayed true to the framework of the deal, and only minor, technical issues remain."

Hansen was relaxed, candid and incisive in his understanding of the logistics and politics that are a part of the deal.

But if he had his druthers, he would have participated in the return of the NBA as a minority owner "with an aspiration to a majority stake when I was more ready."

That said, he is fully engaged, even if he makes his appearances at quiet lunches rather than flamboyant press conferences.

"The (pro sports) owners who are less seen tend to be more successful," he said. "I don’t mean detached. You can’t be detached. This is not a hobby. It does require your commitment at the highest level."

Here are highlights from the transcript of the conversation with Hansen, the Seattle native and hedge fund manager from San Francisco who wants to build a $490 million arena in Seattle's SoDo district that would house relocated NBA and NHL teams.

Thiel: Regarding the controversy over traffic and parking raised by SoDo businesses including the Mariners, does it feel as if you walked into a family fight about commitments unkept by the city?

Hansen: I knew a little bit, but probably not enough. I went at the site selection in a non-political way. It’s a great site with two stadiums already here. And any event at the arena would bring half the crowd of the other venues. If (other sports teams) can get people in and out, it should be relatively easy for us.

Traffic will be a problem with any site. The port has valid concerns. But most of the problems existed before we got here. If you use the analogy of a car’s carbon footprint, if we we can make the arena’s carbon footprint negative, we’re doing a good thing. The thing we underestimated was people using our project as a tool to get their needs addressed before we ever brought up the project.

Thiel: So the arena represents leverage for some constituencies?

Hansen: I’m sure at some level that’s probably the thinking. But it would be unfair of me to comment.

Thiel: Is it is clear to you yet who will be responsible for road/traffic improvements such as a possible Lander Street overpass, from which funds were diverted years ago, and now would cost as much as $180 million by some estimates?

Hansen: I’ll say it like this: I’m going to make a financial commitment to an arena. It’s pretty much set how much I’ll put in. Some could be redirected to other areas. If someone tries to put me on the hook for an infrastructure project of this magnitude that should be undertaken by the city, it would make this project not viable. If you tack that onto the cost of an arena, it would be unrealistic.

We’re funding a traffic study, which is really on behalf of other constituencies. The city’s involvement is to assure independence, and it is running the show more than we are. The discussion probably needs to happen on what the optimal solution is.

There’s only one direction for downtown to grow. South Lake Union is pretty well filled up. When downtown expands into Sodo, with or without an arena, there’s going to be conflict with the port, railroads and others. That discussion has to take place. Our role is that when we bring night events here, we will make things better, not worse.

When we look at light rail, the tunnel and all the transport options for SoDo, we say when our arena comes, how can we alleviate the stresses for our specific events? That’s fair to turn the discussion to that. To saddle our group with the promises made earlier is not fair.

With Mercer Street a civic priority, it doesn’t seem as though the city has the road improvement budget to take on a huge project in SoDo.

I know. I acknowledge that. It’s not that’s it’s not my problem. Of course it’s my problem. If we succeed, we’re going to be neighbors here. But making it ONLY our problem is what’s unfair. The Mariners are here, the Seahawks are here, the port, Starbucks headquarters, Burlington Northern . . . others are coming to the area. There’s a whole bunch of constituencies that can help fix the problem.

Thiel: Is it reasonable to expect that the traffic study you have commissioned is going to produce anything new that we didn’t know 10 years ago about needing the Lander Street overpass?

Hansen: Sure. The problem needs a fresh look. It needs to be done. If I were in charge of the port or city, I would ask whether the Lander Street overpass is truly the best option. I don’t know.

I would caution that this traffic study is being done quickly and at a high level. In the EIS (environmental impact statement), there will be a very detailed study. On a scale of 1 to 10 with the EIS being 10, this traffic study is a three or four. It’s to analyze the issues so the city and county councils can use the data to see if the memorandum of understanding (the document that spells out the arena plan and its funding) is a good idea or not.

People would have a hard time objecting to the arena if they could see it didn’t make the problem worse. A big part of things is parking. The arena completion is at least three years out, close to the time that light rail and the tunnel (replacing the Alaskan Way viaduct) will be ready. It’s important to look at solutions that work for four or five years after that, rather than spend money on temporary problems before the transportation “lift” comes.

Thiel: Your nearest potential neighbor, the Mariners, came across as adversarial in their complaints about parking and traffic.

Hansen: I would be the first to say that the Mariners got a bad rap. It’s my job as a neighbor to extend an olive branch to work on things together. I’m a Mariners fans. They have justified concerns. I can’t speak to their past intentions. I’m not privy to their previous behaviors that some might consider against the best interests of Seattle sports fans. My personal view is that the arena project adding parking, helping create an entertainment district, and possibly working with them on their media side would be a great thing for them.

Once they’re given an opportunity to see the pluses we’re bringing, we hope they see us as a neighbor who is a net benefit to them, as well as being responsible to the same fans. We have the same fans, there’s a lot of overlap. Both our customers are the Seattle sports fan.

Thiel: Please review again your reasons for choosing this site.

Hansen: No. 1 is zoning, No. 2 is minimal environmental (displacement) impact. The loss to maritime and industry workspace gets a little overstated. Very few of the businesses (on the purchased property) are maritime and industrial. So the impact on the community is less. No. 3 is transportation, which was a critical asset for us here: The connection to I-90, the ferries, heavy and light rail terminals. I think (King County Executive) Dow Constantine said it well when he said you couldn’t get a spot anywhere in the region more connected to more public transportation than this site. I don’t know why it hasn’t been more discussed.

If you took the same issues pitched against the site about traffic against the other sites mentioned, they wouldn’t fare as well. This is an urban site that’s connected by numerous methods of mass transit that’s within walking distance of where a large number of people work. If it’s advantageous to fans, it’s advantageous to us.

The best comparison is the lift the Giants got from leaving Candlestick Park for San Francisco. They got a lift from attendance and ticket prices. Fans thought Candlestick was an awful experience and AT&T Park is an incredible experience.

A San Francisco TV station recently did a look back to the issues about the new park before the Giants committed to moving. It was exactly the same as ours now in Seattle: Parking, traffic, it’s going to be a disaster. The point is they figured it out. One of the solutions was how they directed street cars and buses to get people in and out. There’s so much parking downtown (after business hours) and you don’t have to move people very far. People adapt to taking a street car for five minutes to avoid the traffic around the arena.

It’s a complex opportunity to adapt and expand the infrastructure in place to move a large portion of the fan base. That’s a long-term solution. There’s an easier, perhaps temporary solution, which is exiting people to downtown, where there is a huge inventory of (after business hours) parking. This is what happened in San Francisco. People aren’t taking the street car from their house, they drive downtown, park inexpensively, and take the transit to the arena.

It was a long process encouraged by the Giants themselves to change behavior. Now it’s clockwork.

Thiel: Beyond the arena itself, how important to the arena project is the creation of an entertainment district in SoDo?

Hansen: I think it’s important. Whatever we do won’t be on the scale or design of LA Live! But it will fit with our community. Having a better vibe around the arena would be great for fans. People would enjoying coming to more games if there were more to do pre- and post-game within walking distance of the arena.

The fan experience at Fenway Park or Wrigley Field is more than just the park itself. Few fans would argue that Fenway/Wrigley experience is worse than driving 20 minutes to a suburban location surrounded by a parking lot, where you get in your car and leave after the game.

Thiel: Will you participate financially in the district’s creation?

Hansen: The economics haven’t been determined yet. But we will take steps to make it happen because it’s at our front door. We’d like to make sure that, at a minimum, we’re creating the right circumstances for this to happen. We own some acreage around the arena footprint that will be used for parking and some for a practice facility.

Thiel: Is there a district in an NBA or NHL market that might be a model for Seattle?

Hansen: The Kansas City Light and Power District around Sprint Center is something more fitting. They don’t have an NBA or an NHL team but the building is a financial success. Our vision is something more like an extension of Pioneer Square, as opposed to big glass, modern-looking buildings. That’s my personal opinion. Other developers may have a different perspective.

Thiel: Please clear up some public confusion about the potential timing of simultaneous pursuits of re-locations from the NBA and NHL.

Hansen: Seattle has a a 41-year history with basketball, and as interested as people are in bringing a hockey franchise here, basketball is a multiple of that  The chances of two teams signing on the same day is difficult. We could get an agreement from the NHL sooner, but I would consider that unlikely. I think people want basketball first and hockey to follow soon after.

Everything we’re doing is to bring both sports. When you see the design, you’ll see we are building an arena to accommodate hockey that will be substantially more expensive and technically inferior for watching basketball. We have to make compromises in seating pitch, seats in relation to the floor and other compromises to the fan experience, at significant cost. There’s no way we would do that if we weren’t planning on hockey.

Thiel: What besides the two sports-team schedules is needed to make the building financially viable?

Hansen: You’re going to see a lot more top live acts at this arena. The load-in, load-out is a real problem at KeyArena for the bigger acts. The acts either make do, bail, or come to Seattle in the few summer days when the weather is a good for an outdoor stadium.

Katy Perry probably travels with 14 tractor-trailers. They need to get in one day and out in one day to get to the next stop. That’s not a solvable problem at the Key in its current configuration. The Key needs a major reallocation of space and a major infrastructure upgrade.

Our assumptions for the new arena are between 10-15 major concerts and 15-20 minor concerts. The rest of the events are family and community things that don’t draw on the building’s full capacity. We’re not going to put in 200 full-capacity nights. Not gonna happen.

The venue is viable with NBA and NHL. Everything else is gravy. In the right market, you can do it with one team. What doesn’t work is if you have rival arenas of the same size that promoters can pit against one another to the point of insolvency.

Thiel: What does the MOU say about KeyArena?

Hansen: Our assumption all along is that KeyArena will be non-competitive. Our job is to give the city options to make KeyArena viable. We’ll have more to say about that. Without us, the city is having a tough time financially at the Key with things like capital improvements.

Thiel: How do you define your role with the [proposed] arena?

Hansen: It would be as co-owner with the city and NHL team. A tri-party agreement.The city will own $200 million worth of the arena and the NBA/NHL will own $300 million of the arena. The NBA/NHL would be operators of the arena. The city has no desire to be the operator. Not even a point of discussion.

Thiel:  Sports-team ownership often becomes far more consuming than most imagine who haven't done it before. Do you see yourself phasing out of your investment business?

Hansen: Absolutely not. And getting to my kids softball games, being there for my wife, mother, brothers and sisters . . . it depends on how you define your role.

In my view, owners overreach. I don’t imagine I’m going to be successful in basketball-player evaluations.  My objective is to put the right people in place and hold them to certain ethical and moral standards. My job is more about hiring the right people and setting a standard, and assuring the financial solvency of the ownership group.

Some owners have this god-like belief they can fix the sports business like they fix their own business. That gets dangerous.

Thiel: Is it imperative for you to be the managing general partner, or do you see another scenario?

Hansen: No. At this point it’s imperative that I be a majority owner. That’s an NBA rule, too. I think we crossed the line of no one else stepping forward to do that, which is what I wrestled with it for a long time. If I could have laid it out for myself, I would have preferred to be a minority investor, with longer-term aspirations to be a majority owner when the time was ripe for me in my life.

I’ve spent a lot of time thinking about what should be done in an organization. I basically will be handed a blank canvas to re-create the priorities of fan experience in basketball, as opposed to someone who just buys a team. It would be very difficult to sacrifice those things right now. I can have a big impact.

Thiel: What remains to be done on the MOU?

Hansen: I won’t say there’s resolution, but there’s an understanding between county, city and us. We're solving minor, technical issues. Our negotiations with the city have been about 'How do we get this done?' We've never asked anything more. The city and county have been good on their word.

Thiel: If the traffic study you are funding comes up with an expensive mitigation cost, what happens?

Hansen: There's a dual obligation. It's my obligation to make sure that for this project, the pluses outweigh the minuses -- a net positive. And there's some obligation from me to be part of the discussion that resolves the longer-term issues facing the project.

And the city and county have an obligation. Pinning the entire (traffic mitigation) issue on me, I would say, is unfair. Pinning the broader issues that pre-dated me and will post-date me, is unfair. We would be one of many constituencies down there to figure it out.

Adapted and reprinted with permission from


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