February 06, 2012
Seattle rich guy wants to build arena, presumably not with own money
Talk about a new arena in Seattle has been fairly quiet since the Sonics left, at least in public. But behind the scenes, according to an investigation by the Seattle Times, the mayor's office has been talking to a local hedge fund manager about building a new arena to lure teams, possibly targeting the Sacramento Kings or Phoenix Coyotes:
In an initial email laying out his vision, [Christopher] Hansen told city officials an arena could be built with minimal impact on taxpayers...
"I really appreciate it and look forward to making this happen in Seattle," wrote Hansen, a multimillionaire who built a fortune in the private investment world. "I genuinely mean that and am confident that with a little effort and creativity we can find a solution that meets our needs and the City's /State's desire to get a team back to Seattle without a large public outlay."
Hansen offered to provide information on "recent municipal arena deals that have been put together and some of the direct and indirect contributions that the city can make that don't require incremental taxes or direct public funding."
There's the catch: How on earth to raise the cash (the Times article doesn't say, but $400 million is a decent starting point) to build a new arena without charging teams such a high rent that they have no interest in relocating there. Seattle voters approved a referendum in 2006 that requires that the city get a positive return on any investment in a sports facility. The Times speculates that possibilities could include kicking back ticket taxes to pay off arena costs (which could still violate the 2006 law, since the money would be cannibilized from existing local spending) or "increased tax collections tied to a boost in Sodo property values," which is pretty much the definition of "incremental taxes," unless Hansen means something else by that term.
Reading between the lines here, it looks as if Hansen is going to try to find a loophole in the "return on investment" clause in the 2006 law, by claiming that the tax revenues being kicked back to the arena wouldn't exist without it. That's generally a pretty lousy economic argument, but given that this would likely be decided in a court of law, not a court of economics, Hansen might have a chance at pulling it off. And at the very least, it let him get his name in the paper.
Meanwhile, talk of the Kings having another relocation option is likely to heat up talks by Sacramento to sell off their future parking revenues to pay for a new arena there. Not that that has a great shot of success either — while plenty of bidders are interested, it would blow a $9 million a year hole in the city budget that would presumably have to be filled before the plan could go forward — but in the arena game, much of the time it's about throwing as much stuff against the wall as possible, figuring that eventually something will stick.
July 14, 2011
Seattle pols launch arena task force
Put down Seattle as the latest city that, with no particular ideas for how to fund a new sports facility, has instead created a task force:
Now, lawmakers are getting more involved, beginning with the formation of the Sonics Taskforce.
State representatives Mike Hope (R-Lake Stevens) and David Frockt (D-Seattle) led the taskforce meeting on Monday, presiding over a brainstorming session with the goal of finding ways to fund a new arena in or around Seattle. The goal, they say, is to bring the NBA/NHL to Seattle with a plan that involves no additional tax-payer money.
Good luck with that, given that a new arena is expected to cost at least $300 million, and any NBA or NHL team would want the revenues for themselves, not see them go to pay back private investors. SBNation says, "While the meeting was preliminary, it's a good sign for a possible arena deal somewhere down the line," which I guess is fair enough, if your definition of "somewhere down the line" is broad enough.
November 10, 2010
Kings not for sale to Seattle, says Maloof
Microsoft CEO Steve Ballmer cashed out $1.3 billion in shares last week, leading to rampant speculation of all sorts of things: Either he hates the Windows Phone, or he's looking to buy a basketball team for Seattle, as he'd expressed interest in previously.
Sacramento Kings owner Joe Maloof immediately denied that Ballmer, or anyone else, was targeting his team, saying he's "never met Mr. Ballmer, we've had no contact with him and the team is not for sale." No denials yet from the owners of the Memphis Grizzlies, the Milwaukee Bucks, or the Baltimore Claws.
Of course, there's another obstacle to bringing the NBA back to Seattle, which is that the city would still need to come up with at least $150 million to meet Ballmer's (and the NBA's) demand for renovations to KeyArena. Not to mention that NBA commissioner David Stern is busy using the league's struggling franchises as a contraction threat against the players union. So while you shouldn't rule out the Ballmer Option entirely — people with billion-dollar checking accounts don't grow on trees, much as it may seem otherwise — you probably don't want to hold your breath, either.
May 14, 2010
Seattle residents on NBA arena: Meh
A new poll of Seattle residents by SurveyUSA has found that ... well, mostly that pollsters really need to work harder at coming up with questions where they don't already know the answers:
- Unsurprising finding #1: Most Seattleites would be fine with a new NBA arena if they didn't have to pay for it. Asked "If an arena could be built for a new NBA team without using any taxpayer dollars, would you support? or oppose? building an arena?" 72% of respondents said "support."
- Unsurprising finding #2: Most Seattleites don't actually care about basketball. Asked "Do you want a professional NBA basketball team in Seattle? Do you want Seattle to NOT have a professional basketball team? Or do you not care one way or the other?" 60% said either "no team" or "don't care."
This may be a nice way to kill time if you're a pollster, but what does it really tell us about how serious prospects are for a new or rehabbed arena in Seattle? Seattle news blog Publicola sums it up best:
The Stranger's post took the most positive scenario, a stadium built with no tax dollars, and used it to characterize the poll as strongly favorable to a new or rebuilt stadium. In contrast, the P-I took the most straightforward question—do you want a new NBA team?—and concluded that voters were opposed or indifferent to the prospect.
The "free stadium" proposal also benefits from being entirely hypothetical. Arena boosters say the cost of a new or rebuilt arena—approximately $300 million, according to the most recent estimate—would be paid back entirely by user fees. With just over 1 million attendees a year before the Sonics left (600,000 of them Sonics fans), it's hard to see how user fees alone would pay to renovate or replace the arena.
Former Seattle city councilmember Judy Nicastro tells the Stranger that one way of resolving this problem would be to add an NHL franchise as well — not that Seattle has an NHL franchise, or has ever had one. And as certain other cities have discovered, in order to lure an NHL (or NBA) team, you pretty much have to offer such a sweetheart lease that it doesn't actually provide you with any new revenues, for paying off construction debt or anything else.
No word on whether Seattle residents are as indifferent to hockey as they are to basketball. Hey, more poll contracts for SurveyUSA! Score!
May 11, 2010
Seattle arena plans rise from dead, but not very far
The Seattle basketball arena wars are ba-a-ack:
Former city council member Judy Nicastro and a team of cohorts are in the planning stages of an initiative that could, she says, bring the NBA back to Seattle. If passed by King County voters this fall, the measure would create a stadium district to fund the renovation of Key Arena or build a new stadium.
"I want basketball back in Seattle and this is the only way we can do it," says Nicastro.
And what way is that, exactly? Turns out Nicastro is looking at using user fees (read: ticket surcharges) and entertainment surcharges for performers to fund a rehabbed or new arena. Good luck: Unless I'm mistaken, no arena in the U.S. has been built solely with user fees, for the simple reason that those cut into the arena operator's profits, which are the whole point of the exercise. Or to put it more simply: If an NBA team has to give a cut off the top of each ticket sale to pay the city back for the arena, they might as well just build it themselves.
Nicastro also suggested seeing if Microsoft CEO Steve Ballmer is still interested inkicking in $150 million, and called Key Arena, which was just completely renovated by the city in 1994, "a crap hole." Is this how you're raising your city councilmembers to talk, Seattle?
October 12, 2009
Throw it away and get a new one
Quote of the week, from Seattle hoops blogger M. Haubs in a review of the new documentary Sonicsgate:
Many fans have difficulty accepting that Key Arena is an inadequate venue, given that it's a great place to watch a game and is less than 15 years old in its current incarnation.
These fans are mistaken, continues Haub, because they fail to recognize that Key Arena can't "maximize the varied revenue streams" that newer arenas can offer. Which is true enough as far as it goes — but is "doesn't generate as much profit as the tenant would like" really the new definition of "inadequate"?
July 16, 2009
NBA Commissioner David Stern on saving the Seattle Sonics, November 8, 2007:
"I'd love to find a way to keep the team there. Because if the team moves, there's not going to be another team there, not in any conceivable future plan that I could envision, and that would be too bad."
NBA Commissioner David Stern on replacing the Seattle Sonics, July 13, 2009:
"I hope someday, whether on my watch or a successor's watch, that we again have a team in Seattle. ... I think ultimately there will be. I really do."
The lesson here: Don't take threats by sports league commissioners seriously. If you really needed any more reminding.
April 28, 2009
In case you missed it, the Washington state legislature adjourned for the season on Sunday night without passing bills to allocate money for renovating either KeyArena (former home of the Seattle Sonics) or Husky Stadium, home of the University of Washington football team. Proponents of the KeyArena bill, which would provide $75 million in state sales-tax revenues toward a $300 million renovation of the arena, which was just renovated in 1994 (another $75 million would come from the city, and $150 million from a new NBA team owner, presumably Microsoft exec Steve Ballmer), say they could try to bring the bill up again this summer during a special legislative session.
The problem, UW athletic director Scott Woodward told the Seattle Times yesterday, was the "psychological disconnect" of funding sports facilities during an economic collapse. "How do you lay off teachers and cut back on programs and then build a stadium?" Seems to me someone's asked that question before.