The SODO Arena plan is back

In a surprise announcement today, Chris Hansen and his investment group made a new proposal to the City of Seattle in order to address the concerns that halted the project last May — and hopefully to get a necessary street vacation approved.

Hansen sent a letter to Mayor Ed Murray and King County Executive Dow Constantine outlining their revised plan for getting the SODO Arena built.

The 2012 MOU between Seattle, King County and Hansen’s group is dead — or will be allowed to expire next fall. That releases both sides from commitments made, including that Hansen needs to secure an NBA franchise before public dollars become available.

The arena now will be privately financed, no longer requiring $200 million of public bonds to be issued by Seattle and King County. That nullifies the arena opponents’ argument that it was a poor use of public dollars. It also means that the tax revenues generated by the arena will no longer need to cover debt service on the bonds.  But the arena will remain privately owned, a departure from the MOU which would have had it become city property with a lease back to Hansen.

Hansen has identified some additional street improvements in the SODO area he is willing to pay for. He also points out that the compensation for the vacation of Occidental Avenue should be enough to cover the remaining funding gap in the Lander Street overpass project — about $27.5 million. That might quiet the Port of Seattle, a fierce opponent of the arena last spring based upon its expectation of traffic disruptions. The Environmental Impact Statement for the arena showed that lack of an overpass at Lander Street is already a large contributor to the traffic snarls in the area and will become an even greater one in the years to come as light rail and freight trains increase.

The package of public benefits associated with the street vacation are the same as they were in the original application last spring, according to sources within Hansen’s group.

In return, Hansen makes three requests of the city:

• Approve the Occidental Avenue street vacation;
• Waive admissions taxes for the arena, as he claims has been done for other sports arenas;
• Adjust the B&O tax for revenues from out-of-town activities, i.e. games played on the road, since the hosting city will also tax them — just as Seattle taxes sports teams that play “away” games here.

With the removal of the public financing and the requirement to secure an NBA franchise, this becomes a much simpler deal. The biggest obstacle will still be the Port of Seattle. Since May, the Freight Master Plan has been approved, and the city has secured most of the funding for the Lander Street overpass — with Hansen’s contribution likely filing in the remaining hole. It will be interesting to see whether that appeases the Port, and if not, whether the Mayor and Council care.

The Mayor made a statement this afternoon:

“The City will review the letter sent by a group of stakeholders, including Chris Hansen, suggesting a revision to the previous SODO arena proposal,” said Mayor Murray.  “We share the goal of bringing the NBA and NHL to Seattle. The City will continue to consider all options to build a new, state of the art arena that will accomplish that goal and that can serve the city for years to come.”

No word yet from the City Council nor from the Port of Seattle.