Sonics arena backers propose to fully pay for new arena, street improvements

FILE -- Sonics arena drawing.

SEATTLE -- Chris Hansen and his team of investors hoping to build a new arena in Seattle's SoDo neighborhood and lure an NBA team back to the Emerald City have changed their tune and told city officials they are now willing to fully pay for the estimated $490 million project.

Hansen's group and the city of Seattle signed a 5-year Memorandum of Understanding in 2012 that would require the city and county to put up $200 million in public funds once the NBA committed to bringing a team back to Seattle. The project hit a major snag in May when the city refused to vacate a critical part of Occidental Avenue that was needed for arena development. Now, the project backers are coming back to the city with the new proposal in the hopes of getting the street vacated and the arena built.

In a letter addressed to Seattle Mayor Ed Murray, King County Executive Dow Constantine and the Seattle City Council, Hansen's group suggested that improved economic conditions mean they no longer need to seek $200 million in public funding for the project and would terminate the MOU.

"The recession is behind us and we are deep into this new economic cycle," Hansen and his investors wrote in the letter. "Interest rates have declined and the NBA has completed its new national television contract, creating more financial certainty in the industry."

"We just don't want to wait anymore," said Wally Walker, one of Hansen's partners. Walker played for the Sonics and later was the team's general manager. "The reality is we want an arena. W we got into this because we want to get an arena built because we want to get the NBA and also we hope the NHLl here. That's it -- pure and simple."

Thus, Hansen's group is proposing they would pay for the arena's construction costs, plus help pay for the city's pending construction of a nearby Lander Street overpass -- an olive branch to the Port of Seattle. The Port has been one of the most vocal critics for the project, citing concerns about heavy arena traffic impeding cargo trucks carrying goods to and from the nearby port facility along the southern Seattle waterfront.

"We have identified other traffic and freight mobility improvements in SODO to which we will direct contributions," Hansen wrote. "Further, we will agree, following street vacation approval, to commit the future payment of compensation for the vacated street to the City’s financing package for the Lander Street Overpass."

The city just received $45 million in federal funding for the project, and with other grants, had still been about $40 million short of the projected $140 million price tag.

Hansen and his group is asking in return that the city approve the street vacation of Occidental Avenue, grant a waiver of the city's admission tax for the arena as other city sports stadiums enjoy, and an adjustment of the City's B&O tax rate for revenue generated out-of-town.

The new proposal comes just a week after Hansen's group purchased another $25 million in property along the proposed arena site, and a month after another $32 million land purchase. All told, Hansen's group owns about $120 million worth of SoDo real estate.

“Chris Hansen today demonstrated his continued commitment to building an arena, and to take advantage of an improving economy," Constantine said in a statement posted on his office's web page. "His efforts will strengthen our ability to compete for an NBA team. We won't stop until we bring the Sonics home."

Hansen has been trying for years to bring the Seattle SuperSonics back to town after they left for Oklahoma City and became the Thunder in 2008. The group tried unsuccessfully to buy the Sacramento Kings and move them to Seattle in 2013.

The termination of the MOU provides Hansen's group with flexibility - should the city agree to its requests. Hansen already owns the land for the arena and could proceed with construction even without a team. It also opens up the NHL as an immediate possibility as the MOU was tied to the acquisition of an NBA team as a condition of construction.

No NBA franchises are currently for sale, and the NBA has not publicly said if or when it would offer an expansion team to Seattle. The NHL has recently approved an expansion franchise to Las Vegas and has eyed Seattle as a potential new market.

But Walker insisted that the city needs an arena before it can get a team.

"A lot of politicians have been saying, 'Well if we just have a team, then we'll vote for street vacation or financing.' It doesn't work that way," Walker said. ".We have to have a plan in place,. We have to have a glide path, for the leagues and the teams or they are never coming."

"We are hopeful these additional steps will address the concerns of the Council so the Arena project can move forward – which remains the critical first step to bringing the NBA and NHL back to Seattle," Hansen wrote on his blog page

As of now, Hansen's group - which includes members of the Nordstrom family and former Seattle SuperSonics president and minority owner Wally Walker - has not taken on additional investors.

The Associated Press contributed to this report.

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