NBA deal: City, county would put up $200 million (to be paid back); $290 million from private group
Seattle Mayor Mike McGinn announced at a press conference this afternoon that the city has received a proposal to bring NBA and NHL back to Seattle. He said the new facility would be 'self-funded' but would include public money upfront.
McGinn said $200 million from city and county would be invested, but the funds would be paid back through rent and tax revenue generated at the new facility. He said guarantees for paying back the money would be in the agreement.
"The $200 million investment from the county and city would be repaid (from) revenue that would not otherwise exist," McGinn said.
A group led by Christopher Hansen, the San Francisco businessman and Seattle native, would put up $290 million. Hansen was not at the press conference. McGinn said the proposal, if accepted, would not kick in until Hansen's group had purchased NBA and NHL teams.
King County Executive Dow Constantine said the arena would be owned by city and county, despite the hundreds of millions invested by the private group. They are appointing an arena review panel to vet the proposal.
From the news release handed out at the press conference:
"In his letter, Mr. Hansen proposes to raise $290 million in private investment for the facility. In addition, he and his investor group would bear the costs associated with acquiring an NBA team and seek a partner who would recruit an NHL team to the new facility. The remaining arena development and construction costs would be financed by the combination of tax revenues generated by the facility and rental income paid by the teams."
McGinn said the deal could bring hundreds of millions of dollars back to Seattle. Suggests the team that could come to play in Seattle could be the Super Sonics. McGinn, in answer to a question, said the new team brought to Seattle should be called the Sonics.
"This is the first stage in a process here and this is a strong proposal, a promising proposal. And, we put in a lot of work to get to here. But other things have to align too. All the planets have to align and we’re going to work hard to push all the planets into place, but I’m not going to make any predictions," McGinn said at the press conference.
More details from the press release:
Constantine and McGinn said any agreement eventually reached by the city, county and private investors "must adhere to the following principles:"
- A new arena must be self-funding, and not rely on new taxes
- Existing city and county funds and services would not be adversely impacted
- Private investors would bear risk against revenue shortfalls
- Any project cost overruns will be the responsibility of private investors
- Private funding should be provided for a study of ways that Key Arena can be modified to keep it a financially successful part of Seattle Center
The City of Seattle has announced an afternoon news conference where Mayor Mike McGinn and King County Executive Dow Constantine are expected to announce a proposal for a new arena that could bring the NBA back to Seattle, and potentially hockey as well.
The 2 p.m. Thursday news conference will take place at Seattle City Hall. Not expected to speak is Christopher Hansen, the San Francisco businessman and Seattle native who has purchased land in the SoDo neighborhood of Seattle with the hopes of brokering an arena deal.
No financial plans have yet been released on how a new facility, expected to be upward of $400 million, would be paid for. But the news comes at a time when both the NBA and NHL have franchises potentially looking for new homes.