The SoDo Arena: Just Do It!

This deal is quite different from the one-sided giveaways of the past, and the worries about traffic congestion are over-blown.
Crosscut archive image.

Chris Hansen, left, with Mayor Mike McGinn during a press event.

This deal is quite different from the one-sided giveaways of the past, and the worries about traffic congestion are over-blown.

This is about the proposed Sodo basketball and hockey arena.  My bottom-line conclusion may not be what you expect, since I generally hate political decisions that send gushers of tax dollars and subsidies to self-interested private groups with political juice.  

Think Sound Transit light rail. The South Lake Union and First Hill streetcars. The massive Mercer Mess traffic-grid redo. The fat state-level subsidies extended to The Boeing Co., Microsoft, and other big hitters but not to less-favored enterprises.  Think too of stadiums built with major public subsidies for sports-franchise owners who, down the road, sell those franchises for hundreds of millions in private gain (as former Sonics owner Howard Schultz did when he sold the team to an Oklahoma City group without searching first for local buyers).
Only recently, during the big public revenue squeeze, have our elected officials come awake to the fact that ordinary voters and taxpayers don't like such subsidies.  As a result, they may be leaning to rejection of a new Sodo sports arena whose sponsors are asking for far less public support than their predecessors and who appear to be genuinely committed to sustaining successful National Basketball Assocation and Natioal Hockey League teams in Seattle. 
The group which has bought the land in Sodo, headed by former Seattle guy Chris Hansen and including local financial heavy hitters such as Steve Ballmer, and critics on the Seattle City Council, in particular, could get a deal done quite quickly that would protect taxpayers but also thrill local sports fans.   They ought to do it right now.
To do this, some of the players will need to take a step back.
Look first at the political stakes.  Seattle Mayor Mike McGinn is all in on the arena proposal.  Could he resurrect his seemingly hopeless reelection chances by winning a big one?  His only strong allies on the council are his bicycle pal Mike O'Brien and Bruce Harrell.  There is a temptation for other council members to oppose the arena deal simply because McGinn supports it so strongly.  If he is so flaky on everything else, how could he be right this time?

Former City Councilmember Peter Steinbrueck, who may oppose McGinn in next year's mayoral race, has gone all in himself — on the anti-arena side.  He has hired himself out to the Port of Seattle, which opposes the arena (on grounds that it would further congest freight traffic in the Sodo area), thereby generating short-term consulting fees for himself and, he no doubt hopes, longer-term political contributions from the constellation of private interests tied to the port.
Steinbrueck and other advance numerous arguments against: the proposal. While the prospective Sodo arena site is zoned for stadium and arena construction, the Port of Seattle argues that a new NBA/NHL arena would hopelessly congest the already clogged arteries serving the port.  The city several years ago promised traffic fixes in Sodo which never got done because the money got diverted to fixing the Mercer Mess reconfiguration (which will not reduce Mercer congestion even slightly). 

But it's hard to believe that evening traffic to and from basketball and hockey games would impede working-hours traffic around the port.   Traffic fixes are required in the Sodo area, and the Port of Seattle and its neighbors, including the Hansen group, should get on the city's case to demand them.  The Hansen group should not be expected to pay for them.
The Seattle Mariners also object to the Sodo arena, although they have recently softened their public criticisms, perhaps because of the presence in the Hansen group of such local business figures as Microsoft CEO Steve Ballmer and the Nordstroms.   The Mariners should be so lucky as to have traffic jams near Safeco Field, since their own attendance is not generating them. 

True, there would be few overlapping dates between major-league baseball, National Football League, and professional soccer games and the new teams in the neighborhood.  But the NBA/NHL capacity crowds would be small compared to those of the other pro franchises.  The real reason for Mariner opposition, it would appear, is the team's fear that the sports-ticket buyer base in Seattle is only so large and that successful NBA and NHL teams might lure those buyers away from the eternally losing Mariners.
The traffic-congestion argument, it seems to me, is characteristic of Seattle.  Those who have attended stadium or arena events in Boston, New York, Philadelphia, Washington, D.C., Chicago. Los Angeles, or San Francisco will tell you that congestion on game days and nights is mild here as compared to that in those other cities.  The same is true for traffic congestion in general here as compared to elsewhere. 
There is an emotional argument, too, that says that the National Basketball Association should under no circumstance be allowed back into Seattle.  After giving the Sonics many years of active and loyal support, local fans took a screwing from Schultz, NBA Comssioner Howard Stern, and the Oklahoma buyers.  They all issued short-term ultimatums to city, county, and state governments; misled many about their ultimate intentions; and then took the Sonics franchise away in typically smarmy NBA fashion.

The insistent demands upon governments and fans would never have been necessary in the first place if NBA owners maintained any kind of rational business model.  The present business model consists of giving outsize multi-million-dollar contracts to a handful of players and then insisting that taxypayers and fans pony up to pay the contracts and give the owners a profit.   If professional sports leagues were cities, the NBA would be Las Vegas.

We could reaccept and support an NBA franchise, however, run by what appear to be straight-up guys and fans in their own right such as Hansen, Ballmer, et. al.
At the other end of the spectrum, the National Hockey League is respected as a sport.  Hockey is a wonderful game which has been absent at major-league level from Seattle since its 1920s Metropolitans won Lord Stanley's Cup.   The city would rally to it just as avidly as it has rallied to the soccer Sounders.
This leads us to the practical decision point.  It's good to be skeptical about tax revenues promised by professional sports franchises.  Will they ever repay taxpayers for their initial subsidies and deflected bonding capacity?   Will stadiums and arenas, such as the Kingdome and KeyArena, be demolished or sit vacant after relatively short years of use?  This syndrome has been repeated in other cities. 

But a pro franchise can provide a tax-revenue steam to a city, if the initial financial deal is structured sensibly.  Two aspects of current bargaining seem soluble and would seem to offer a happy ending for all.
First, the Hansen group proposes that the city own both the arena and property after 30 years.   But what, after 30 years, the arena is deeemed obsolete and Hansen et. al. ask for a new one in Bellevue?  Second. there is the fact that I-91 — the Seattle public initiative passed with a 74 percent majority — requires that a sports-franchise revenue stream yield a fair-market return for the city's investment from day one of its participation. At the present rate on a 30-year Treasury bond, this would amount to about $3.4 million annually.  
Hansen and members of his group did not get rich by being dumb.  When Hansen decided to buy the SoDo land, and go for the franchises, he no doubt researched carefully the history of stadium and arena deals already in existence.  That research indicates that his proposal is far fairer to taxpayers than those already in existence elsewhere, and certainly far fairer than those to which local folk had grown accustomed. 

What he probably did not recognize, however, was that the political ground has shifted in recent years and tipped away from huge public concessions to sports-franchise owners who sometimes later proved faithless.   There has been a climate change.
You have to believe that the Hansen group and arena skeptics can find common ground on the matter of ownership of the land and arena 30 years from now.  If, as Hansen argues, the land and arena could only appreciate in value over that time, he and his group should feel comfortable keeping their ownership.  The yield on 30-year Treasuries will always be comparatively modest.  Surely some tweak in financial formulae should guarantee that yield (or something spproximating it) to the city for its investment.
There should be room for flexibility on at least one of those issues.
The fundamentals remain.  Public entitities must beware of unwarranted subsidies to private entities.  Sports owners make huge capital gains, taxed at a lower rate than ordinary income, when they eventually sell their franchises.   The ground between is where deals can get made.
I believe Hansen and Co. want to be long-term and responsible owners of NBA and NHL teams here.  They are not predators seeking a quick buck from their home city.  The teams themselves would be of cultural and eventual economic value to the area. Perhaps the present KeyArena or some other venue would be more desirable than the SoDo location.  But the SoDo location is what Hansen and Co. own and where they want to build.

I don't buy into the Port of Seattle's wolf-crying plaints about off-hours basketball and hockey crowds crippling port operations.  Nor do I take the Mariners plaints seriously.  SoDo traffic can be congested but is not at critical stage.  All neighbors there should mobilize to get the imprvoements which the city originally promised and on which it reneged.
We should forget who might get credit or blame for the SoDo project.  It should be weighed independent of those considerations.  The Seattle Times editorial board does not believe a fair deal can be made and opposes the arena.  I think otherwise.  The Hansen group and city should work the numbers regarding land/arena ownership and meeting the requirements of I-91.  It should not take a Conference of Versailles to reach a fair deal.


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About the Authors & Contributors

Ted Van Dyk

Ted Van Dyk

Ted Van Dyk has been active in national policy and politics since 1961, serving in the White House and State Department and as policy director of several Democratic presidential campaigns. He is author of Heroes, Hacks and Fools and numerous essays in national publications. You can reach him in care of