Chris Hansen: KeyArena bids should be nitpicked like his SoDo plan was
May 9, 2017, 11:01 AM | Updated: 12:27 pm
When it comes to building an arena that will attract an NBA and/or an NHL team to Seattle, entrepreneur Chris Hansen insists that SoDo is still the best option. And further, he told “Brock and Salk” on Tuesday that he hopes City of Seattle officials and observers will vet the two bidders hoping to renovate KeyArena as intensely as they did with his group’s SoDo plan.
“You spent five years nitpicking every little part of our proposal, right?” Hansen said. “I don’t just mean financially. I mean traffic and the Port and various issues that came up form overpasses to – do the same thing with these guys, man. There’s a lot of details here that they have purposely glossed over since they released their proposals, their responses to the RFP. Don’t get fairy glitter here. Eventually this stuff is going to come out, and read the details, read what they’re asking for and do a good side-by-side comparison, and if that’s left to us to do it, I think we’ll certainly have our take on it.”
Hansen has led the SoDo Arena Group, whose members also include Nordstrom co-presidents Pete and Erik Nordstrom, former Sonics player and team executive Wally Walker as well as Seahawks quarterback Russell Wilson.
The two opposing bidders, Anschutz Entertainment Group and Oak View Group, are pitching renovations to KeyArena that would allow it to stand alone as a music venue until an NBA or NHL team is ready to move in. Hansen’s group has said it doesn’t want to start building at its site – one block south of Safeco Field – until a team has been secured.
The SoDo Arena Group has changed its initial proposal to be entirely privately funded. AEG and OVG have also pitched privately funded options (though OVG has suggested public bonding). But Hansen said local media covering the arena issue hasn’t done enough combing through the fine print.
“I don’t think that the press here has done a good job of actually reading the details of those two proposals and really understanding the various subsidies,” he said.
In terms of personal owner equity, Hansen called the proposals “fundamentally different.”
“We could probably finance our budget without putting in any additional capital ourselves right now, with just taking on private debt and the equity we have in the ground,” Hansen said. “Now, we’ll probably put in a little more, because we don’t want to be more over-levered, but I’m just saying I think that should answer a lot of the questions about our financial commitment and resources.”
Hansen said that if the city was willing to give hundreds of millions of dollars in subsidies, like the other proposers are asking for, then his group would be willing to build the arena on speculation. He specifically pointed to OVG, which is asking for the public to “build a $30,000 per stall, 850-space garage on land that they don’t own.”
“When you’re talking about redirecting the taxes of the arena into an account that can be used for operations, and covering all of their operating expenses, if the city would like to redirect all of the city taxes into an operating account for us, sure, we would consider building on spec,” Hansen said. “That would be easy to raise incremental financing against, debt financing against. Yeah, it would fundamentally change the equation.
“Do I think that’s in the best interest of the city? I really don’t.”
Where things stand with the SoDo project
The SoDo Arena Group still needs a street vacation of Occidental Avenue to move forward with its project. In May of 2016, the City Council voted 5-4 against selling that strip of land. Hansen said his group is at “the 1-yard line” in terms of the design development stage.
“We’ve been through a very, very long entitlement process, where really everybody from the city has weighed in – from politicians to design review boards, to SDOT, to people in the area – which is sort of the normal Seattle way,” he said. “So I think we feel pretty good with where that’s at and I think we have a really compelling case.”
Much less clear, though, is how close Seattle is to getting a team from either league.
“I think it would be great if someone could tell me what yard line we are on as far as getting an NBA team or an NHL team,” Hansen said. “I don’t have any perfect clarity into that. I would say that the NBA is a little bit harder to find the timing because either a team has to come up that’s available for sale or the league has to make a decision on expansion, and none of those seem imminent.
“The NHL is a little easier to understand. They really would like to be here, and it’s just a matter of finding an ownership group that is willing to pay the price that (NHL commissioner Gary Bettman) is asking and also having a solution of where to play.”
While the heads of OVG and AEG have connections in both the NBA and the NHL worlds, Hansen is an outsider. The perception of the group appeared to change when billionaire Steve Ballmer left to purchase the Los Angeles Clippers.
Hansen said he was willing to do whatever it takes to secure a team.
“I don’t have to be the majority owner,” Hansen said. “If the league ever had any issue with me, it’s fine. First and foremost for me, I want to get a building built, I want to get a team back here and I want to be sitting in some great seats with my four kids, watching Sonics games again. It’s simple as that.”
Other highlights from the conversation:
What Hansen has learned: “I think I’ve learned that there’s a lot more constituencies that like to weigh in on things than I probably would have been aware of. I think I also learned that politics play a very key role. It’s not always just a matter of the facts. It’s people’s personal considerations that matter a lot, and I think I learned a lesson that I’m still learning, which is perception can matter more than the facts sometimes. And … constituents with a lot of money who really want to push their agenda can definitely affect the perception.”
The impact of perceptions: “It’s taken us six years and people have made things out to be bigger issues than they are. I think that’s the simplest way to put it. But at the same time, it’s OK. That’s just the Seattle way. I’m not mad about it or anything. I understand that if you’re going to attempt to do something like this, it’s going to be difficult. People are going to oppose you. It’s democracy; people have a right to do that. As long as they’re not doing anything illegal, who am I to complain about somebody standing up for what is in their vested interest?”
The impact of Ballmer leaving: “Look, Steve is one of the wealthiest people in the world, so there’s no doubt that it’s hard to have a partner with the financial resources of Steve, and he’s an awesome guy and he really loves basketball. How many people with multi-billions of dollars are diehard basketball fans that are from Seattle? There’s not many of those, right? So of course we miss Steve.”
Replacing that level of financing: “I am and have been the largest financial investor in the partnership, not Steve. Steve would have actually made a larger contribution when it came time to purchase the team. Personally … I am by far the largest investor in the actual land, paying for the entitlement costs. We have put forth about probably close to $125, $130 million in the ground so far, which is very different than the other projects that have been proposed and are currently being proposed.”
The viability of KeyArena and the SoDo arena: Hansen said the city can do whatever it wants with KeyArena and doesn’t believe it needs to be one or the other. “Many markets have two buildings. Can you imagine if you gave a concert promoter exclusivity to all sports arenas in a city for the future? Can you imagine what that negotiation would look like between a future NBA and NHL owner if they have the ability to charge facilities fees and you have no other place to build, what that power looks like and the difficulty that actually raises for a team.”
On the KeyArena bidders: “They’re not civically minded institutions … irrespective of what they say. It’s just not their nature. They’re interested in building a network of arenas to promote their music business and earning a good return on invested capital and that’s really just different than us, and I think that that’s the part of it that the city in this process has to do a good job of.”
On the city blocking the SoDo Arena: “Just because you’re exploring KeyArena, don’t block our project. If something comes up in the interim, we’ll go ahead. And we’re fine with the competition, we’re fine with this being a two-arena build. You want to build another music venue at KeyArena, it’s 100 percent OK with us. It’s the city’s property, they can do whatever they like with it, and whatever’s in their long-term best interest, we’re OK with that. If they would like our assistance, like in the MOU, they would like our help to make sure that it does not lose money, and maybe turn it into something different, we stand by ready to help, just as we were the last time. We are 100 percent confident that if our arena was approved, and the city asked us to do that, we would find a way to ensure that they make as much, or more, money than they make out of KeyArena right now.”
On the NHL being ready first: Hansen said it’s most likely that the NHL would come before the NBA. He said finding an NHL owner is key. “We’re not super passionate about hockey the way that you need to be about anything that you’re going to attack like this in life. It’s not just financial resources. Seattle deserves an owner that wants to build an incredible sports franchise. We’ve all seen the difference between ownership groups that are somewhat apathetic or disinterested or doing it for ulterior motives, compared to those that are. I think the challenge is finding someone who is a great fit for this market and really is passionate about hockey.”
On his passion for the project: “I’m not like a real animated person who gets out there and really pushes the envelope on some of the things I say. I try to keep it real and keep it honest and stick to facts and maybe that inspires some people the right way and then doesn’t inspire other people the right way. But that’s just who I am.”