It looks like the final shoe may be about to drop: Seattle Mayor Mike McGinn says that hedge fund rich guy Chris Hansen and the Seattle city council have reached an agreement on a new downtown arena that alleviates the council’s concerns. An official announcement is expected later today.
So, what’d the council get in its month and a half of haggling? As you’ll recall, councilmembers had three main concerns: They wanted to keep some of the tax proceeds from the arena to pay for traffic improvements around the site; they wanted more information about Hansen’s business plan and financials, to ensure the city wouldn’t be left holding the bag if his project went belly-up; and they wanted a concrete proposal about what to do with KeyArena once the new building is in operation.
Details of the revised plan are still sketchy, but some hints are provided in today’s Seattle Times:
- $40 million of future tax revenue would go to a fund for road improvements, assuaging Port of Seattle concerns that their trucks won’t be able to navigate local streets on game days. Hansen would kick in an extra $40 million to make up the difference.
- Another $7 million in tax revenue will go into “a fund to improve KeyArena and plan for its future,” again with Hansen presumably filling the gap with his own cash.
- The city “might” borrow $145 million instead of $120 million to put toward stadium costs, but Hansen will still pay it all back, either via rent or kicked-back arena tax receipts.
- “City sources said the council believes Hansen’s business plan will succeed even with the added debt load.” Presumably this means the councilmembers got a peek at Hansen’s books, or one set of them, anyway.
Clearly, the big ticket item here is the $47 million in subsidies that Hansen agreed to give up, though it’s not yet clear whether this is $47 million in 2012 dollars, or $47 million spread out over the next 30 years. Still, given that the deal was looking awfully close to break-even for the city previously, either way this concession likely pushes the needle over into the black.
The main concern now about the deal shouldn’t be whether it’s a reasonable one on its own merits — it is, especially compared to the more typical arena giveaways — but what will happen to the KeyArena, and the city’s revenues from it, once a new arena is built, especially considering that arena experts question whether there are enough events in town to support two NBA-sized arenas. A piddly $7 million isn’t going to be enough to bail out an empty arena, so unless Hansen has provided more details that will be revealed later, this still has to be a worry.
Still, preliminary kudos to the Seattle city council for apparently getting Hansen to sweeten a deal that was never all that sour to begin with. It’s amazing what elected officials can accomplish when voters tell them in no uncertain terms what they should do.