How would taxpayers be protected if a new basketball arena gets built in Seattle? The details are in an agreement between the city, King County and the man who wants to bring an NBA team to town.
After three months of meetings and negotiations, there’s now a formal Memorandum of Understanding between investor Chris Hansen and Seattle Mayor Mike McGinn along with County Executive Dow Constantine. In the fine print, it describes how Hansen will purchase the land south of Safeco Field, build a new basketball arena on it, and then sell it to the city.
McGinn says the city’s portion – which could total up to $120 million worth of bonds – will be covered by revenues from the arena:
“No new taxes are being sought for construction or operations. So, it will b paid for by the taxes that are on the operations of the team and the arena itself.”
The first payment would come only after an NBA team has been secured, giving the city and county first rights on all revenue from that team.
The portion coming from King County is smaller, and mostly depends on a second phase. That would be if the owners can also land a professional hockey team to share the arena.
The next step is for both the city and county councils to hold hearings and eventually vote on the agreement.
Investor Chris Hansen originally hoped to have a deal finalized before the annual NBA owners meeting in June. He won’t make that deadline, but still hopes the process will move quickly.
"The sooner we get it done, obviously, we’ll be in a position to bid on a franchise."
Hanson needs one of the NBA’s struggling teams to go up for sale. He wouldn’t say which team’s most likely.
The agreement in Seattle includes several clauses to force the team to stay here, for at least 30 years, even if it starts losing money or changes owners.
It calls for up to $200 million in public financing, through the sale of bonds. The county's portion is less, $80 million of the total, because it earns less revenue from the arena. Without a hockey team, the public funding tops out at $120 million, of which $115 million comes from the city and $5 million from the county.
Hansen must come up with $290 million himself, plus purchase an NBA team.
The arena would seat nearly 19, 000 people, depending on the type of event. McGinn noted that's less than half of what Safeco Field holds for baseball, so the traffic impacts will be smaller.
A report on the traffic impacts is due from the Seattle Department of Transportation in about two weeks.
The full Memorandum of Understanding is posted online, and includes a clause that says the new team must be named the "Seattle Supersonics."
