Hansen to Seattle: Okay, how about if we build two arenas?

Would-be Seattle arena builder Chris Hansen seems to have resigned himself to the city approving Oak View Group’s plan to renovate KeyArena, which appears to be a fait accompli despite its main backer resigning in disgrace last month. That doesn’t mean Hansen is giving up on his own arena dreams, though, not when Seattle could just have two pro sports arenas, amirite?

Hansen says he also now believes the city could move forward on KeyArena and his proposal.

“I think it would work better when you consider the purchase price for NBA teams. Look at Houston as an NBA comp,” said Hansen.

The NBA’s Rockets just sold for $2.2 billion.

“A venue with an NHL partners and music partner and NBA partner is inherently going to lead to issues,” he said, “with how to divvy up the pie.”

There are several things wrong with this argument. First off, one doesn’t “divvy up an arena pie,” because there is no pie: Arenas don’t bring in money, NBA and NHL games and concerts bring in money. I suppose one could argue that there are a few things about an arena you can only sell once regardless of how many events you hold there (naming rights and some ad signage, maybe), but those are unlikely to make up for the fact that you only have to pay to build one arena.

Secondly, the history of urban areas building multiple arenas for multiple pro teams is not great: They end up competing for concerts to fill the dates around the sports schedule, and something often ends up being demolished or abandoned. Sure, there are exceptions, especially in cities larger than Seattle where there are tons of concerts to go around. But again, putting in twice (or close to twice) the construction costs to get back the same amount of total sports and concert revenues is a pretty dumb business plan all around.

Plus, does it really make sense for Seattle to devote two parcels of land to sports arenas when one will do? You get the idea.

But hey, if Hansen wants to go up against Tim Leiweke in an arena marketing war, more power to him, I guess. This guy clearly really wants to own an NBA team in Seattle, and really thinks the best way to do that is to build an arena in SoDo. And I’m on record as saying I think Seattle should do everything in its power to keep both Hansen’s and Oak View’s bids alive to see if they’ll keep upping the ante, so really, all good here.


5 comments on “Hansen to Seattle: Okay, how about if we build two arenas?

  1. The MOU being batted around for OVG section 1 b (so right near the top) is about exclusivity terms.

    If Hansen can build his arena without expecting the financial support/incentive of an admissions tax waiver (estimated at $74-ish million NPV when it was bond repayments), that might be interesting.

    Then again, “a bird in hand is worth two in the bush” theory says “Chris, when would you start building again?”
    —————–
    During the term of this MOU and the term of the Lease Agreement, (i) the City shall not negotiate with any person or entity, other than OVG (or its designee or permitted assignee), regarding renovation or redevelopment of the Arena, or solicit or entertain bids or proposals to do so, and (ii) the City shall not provide financial support, benefits, or incentives (other than those that are generally available to any potential developer) with respect to the construction of any live entertainment venue with a capacity of more than 15,000 seats within the jurisdictional boundaries of the City of Seattle.

  2. Hansen’s got the persistance market cornered, but the City of Seattle is as likely to approve his arena as WalMart would approve Target building a store down the road from one of their own facilities (if WalMart had that kind of power) for the same reason: They don’t want the competition for the same entertainment dollar.

    Hansen’s best option for buiding a new arena would’ve been to sell some of that valuable acreage in SoDo and use the proceeds to buy that plot of land south of Seattle in Tukwila that was being talked about as a possible site for an arena to house an NHL team when Ray Bartoszek was sniffing around and talking the talk. The City of Tukwila was willing to expedite as many permits as they could to help make that happen and the proposed site was very close to the intersection of Interstates 5 and 405 (the two main north-south routes in the Greater Seattle area) and is well-served by mass transit. But Chris has the blinders on regarding the SoDo location and the 62-acre site in Tukwila was sold last winter for $136 million by David Sabey, who was one of the local business “leaders” who passed on buying the Sonics when Howard Schultz was offering the team to local buyers only but then suddenly became interested when Clay Bennett’s group bought them.

    Let’s face it. The NBA now has what they REALLY wanted from Seattle: Steve Ballmer’s billions. What sane businessman would be such a cementhead that he’d be willing to place an NBA or NHL franchise at the Seattle Center (which WILL be the only option), where they’d be nothing more than a tenant with a dysfunctional City as owner and OVG as landlord? They’d be third in the pecking order…good luck getting control of the facility you play in with that setup.

  3. Arenas aren’t the only problem, Neil. There are basically three huge stadiums for concerts in the Seattle area. Safeco Field, Centurylink Field, and Husky Stadium. And for indoor venues we have the Rose Garden in Portland, OR, and the TacomaDome in Tacoma. That being said, I think Chris Hanson’s best best for his own arena is to build in SoDo and take either the Mariners or Seahawks with him.

    • Stadiums don’t typically compete for arena-size shows, and nobody’s driving to Portland to see a concert. Tacoma Dome is somewhat of an issue, yes.

      No idea what you mean by “build in SoDo and take either the Mariners or Seahawks with him”? They’re both in SoDo already.

  4. Lots of chickens getting counted before they’re hatched. They have zero commitments or firm timelines for either NHL or NBA. Most things I’ve ready put them in the top 5 desired expansion spots for the NHL but not in the top couple which is a pretty awful place to be–close enough to see the prize but likely to lose out more than once before you actually get it. They’re #1 on the NBA list… except there don’t seem to be any plans of expanding for several years and everybody who looked likely to move has re-upped with their current cities.

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