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Chowder House Rules

How the Sodo Arena Went from Dead Deal to Slam Dunk

Chowder House Rules

Robert Ullman

BURGESS, MCGINN, AND HANSEN Finally done playing ball.

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The party started early on the afternoon of September 13 at Pioneer Square's F.X. McRory's, with free beer flowing and basketball fans cheering in celebration of the latest milestone in hedge fund manager Chris Hansen's quest to return the Sonics to Seattle.

A few blocks away, at City Hall, a more sober meeting of the city council's Government Performance and Finance Committee was plodding through the details of a new and improved Memorandum of Understanding (MOU) on the arena—which still has several hurdles to leap before it's built. But down at the sports-dependent saloon, a new Sonics stadium was seen, correctly, as pretty much a done deal. Workers rolled kegs into a basketball-court-sized chunk of Occidental Avenue South annexed to McRory's for the occasion, and Hansen sat at a small table inside the Whiskey Bar, absorbing congratulatory backslaps and granting interviews to reporters. Meanwhile, Hansen's dream team of local consultants milled about, drinks in hand, occasionally glancing at their smartphones for news of a final council vote.

As usual, the council was taking its time. But everybody knew it was a slam dunk.

It was quite a comeback from just a few short months before, when the port and other Sodo stakeholders appeared to have the upper hand, and city council members were elbowing each other for room to demonstrate their skepticism. At a June 7 hearing, International Longshore and Warehouse Union Local 19 president Herald Ugles lambasted the arena as a job-killing "landgrab," while Council Member Sally Bagshaw dismissed a traffic study that had concluded Sodo could handle additional arena traffic with minor improvements. "Has anybody actually stood on First Avenue and watched the traffic?" Bagshaw asked rhetorically before recounting the congested view from her own First Avenue condo.

A couple weeks later, Council Member Richard Conlin publicly pronounced the deal all but dead, a view finance committee chair Tim Burgess says he shared at the time. "A majority of council members were clearly saying that this was not going to work," Burgess recalls.

So how did we get from a dead deal to a celebratory beer bash? A steaming hot bowl of chowder.

Or something. Neither Burgess nor Hansen can remember what they ate when they met for dinner at Duke's Chowder House in South Lake Union on July 2—it seems the conversation was somewhat more memorable than the food—but Burgess says the tide started to turn that evening. "All the money was going to Hansen," Burgess says of the up to $200 million in city and county bonds that the MOU, at the time, called for. "I communicated to Chris that this was not going to work unless we meet the principle of public money addressing public benefits."

The two didn't negotiate details after that, but Burgess says Hansen signaled that he understood what the city needed, and the discussions moved on from there.

Hansen, a professional deal-maker, doesn't remember the dinner as being quite as momentous. "It was great to get to know him," says Hansen, "but I didn't have Tim's skepticism." Having offered the city what he believed to be an "unprecedented transaction," Hansen says he never felt like the deal was dead. "I'm an optimist," explains Hansen. "I just tried to work something out."

And so they did.

On top of the substantial protections offered in the original MOU, the city now benefits from a minimum $200 million buyout at the end of the lease (aka a guaranteed profit to taxpayers!), while public debt will be further secured by additional reserve funds plus an unprecedented personal financial guarantee from Hansen—if everything goes to shit, he personally picks up the tab. Such a personal guarantee is unheard of, but hardly a big sacrifice on Hansen's part if he's as confident in his numbers as he's always said he is.

The biggest give from Hansen: the allocation of $47 million to be spent on public benefits, with $7 million going to KeyArena and $40 million to mitigating traffic in Sodo.

Beyond the financial details, two of the most important modifications to the arena deal fall outside the MOU itself. In a nod to port stakeholders, the city will impose a new Port Overlay District that would more proactively protect maritime and industrial uses within the Duwamish Manufacturing and Industrial Center. And, in a move to reassure organized labor, Hansen has struck a deal with the stagehand, teamsters, and service employee unions that guarantees both KeyArena and the new Sodo facility will be union shops.

Altogether, these concessions were enough to overcome the council's early opposition. "The amount of study and analysis that has gone into this has really changed my mind," Bagshaw said at last week's hearing, in marked contrast to her prior skepticism. The rest of the committee agreed, ultimately recommending approval of the MOU by a 7–0 margin, with Nick Licata abstaining and Conlin absent for a Sound Transit board meeting. The final council vote will be held on September 24, but it's only a formality.

Back at F.X. McRory's, the news of the council vote broke just in time for the crowd to toast Hansen (with the beer he bought) on the five o'clock news.

All that remains now is for him to snag an NBA franchise and then bring a championship back to Seattle. And while that may seem like a daunting challenge, it should be nothing compared to persuading a reluctant city council to hand Mayor Mike McGinn a 7–0 victory on what is arguably the highest-profile accomplishment of his term. recommended

 

Comments (6) RSS

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1
As far as I can tell, the only thing new in this story is that Burgess and Hansen had dinner.
Posted by pkbrown on September 20, 2012 at 1:25 PM · Report this
2
Hansen has been taking several of the council members out for dinner and informal discussions. You can see evidence of lots of discussions of council with Storm, with Hansen, etc in the visitor logs.
I recall reading about Burgess and Hansen going out to dinner before but this is the first time I've heard the specific restaurant name. Although the article graphic and "Chowder House" is a bit disturbing.
Posted by ChefJoe on September 20, 2012 at 2:19 PM · Report this
3
And someone is getting a hand job; that would be Hansen, via the taxpayers.
Posted by hmmmmm on September 20, 2012 at 2:30 PM · Report this
rob! 4
What that illustration fails to show is Goldy hoeing in the garden outside the bedroom window.

Couldn't resist.
Posted by rob! http://www.youtube.com/watch?v=QZBdUceCL5U on September 20, 2012 at 2:31 PM · Report this
seatackled 5
Er, does the cartoonist actually know each man's level of hirsuteness?
Posted by seatackled on September 20, 2012 at 2:39 PM · Report this
6
Oh come on, this was baked in the cake from the get-go. The "progressives" in this town are every last bit as sleazy, corrupt, and dishonest at the "conservatives" who run Bellevue. There is absolutely no difference between them.
Posted by Wing It on September 25, 2012 at 4:06 AM · Report this

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