"If it was about making money I would have preferred to have just stayed under my rock and have no one on this earth know about me," millionaire hedge-fund manager and would-be Sonics owner Chris Hansen says about his quest to bring big league basketball back to Seattle. "Regardless of whether the NBA is a good investment or not, my business is a better investment," insists Hansen. "I'm able to earn higher returns in my existing business with a minimal level of public disclosure and opinion about how I should do things."
So if it's not about the money, and if Hansen is so obviously uncomfortable in the public spotlight, why the hell would he invest up to $800 million in building a new NBA/NHL arena and bringing a couple of franchises to town?
"I'm really passionate about basketball," says Hansen, "really passionate about it here in Seattle." You know, hoop dreams and all that. Dreams that are one step closer to reality today after Hansen signed a Memorandum of Understanding (MOU) with county and city officials.
Today's MOU, announced at a morning press conference, is pretty much along the lines of the previously released agreement, except with a lot more specifics filled in. As promised, no new taxes will be raised to fund arena construction, with the public contribution entirely self-financed via revenue that would not otherwise be generated but for the arena. Both NBA and NHL franchises will sign non-relocation agreements covering the full term of the public debt, with investors guaranteeing revenue sufficient to meet the city/county's annual debt service. Hansen and his partners will be responsible for all cost overruns, maintenance and capital improvements, and the city/county will be first in line among creditors in the unlikely event of a default. (The value of the franchises alone would more than cover the public investment.)
The biggest news today has to do with the timeline of the payments, the split in public financing between city and county, and the fact that Hansen is ready to move forward as soon as he acquires an NBA franchise, regardless of whether an NHL franchise is immediately available.
Once the city and county councils embody the MOU in ordinance, Hansen's group will proceed with the design, permitting, and environmental reviews necessary to get the project moving. "It will take 12 to 15 months before we can put a shovel in the ground," Hansen told me in explaining the urgency for the councils to move quickly in evaluating and approving the MOU. "The farther along in the process, the better position we'll be in" should a franchise become available says Hansen.
Only after the permitting has been completed and a franchise is acquired would public bonds be issued and a payment due: the city would purchase the land at fair market value ("roughly what we paid for it plus the soft costs to get it ready to build on," says Hansen), but no more than $100 million. Sometime after the arena opens (the "Transfer Date" is complicated for technical reasons), a second payment would be due transferring full ownership of the arena to the city/county: up to $200 million ($120 million from the city, $80 million county) less the amount paid in the first installment should both NBA and NHL franchises be acquired, or up to $120 million ($115 million from the city, $5 million county) less the amount paid in the first installment should only an NBA franchise have been acquired; the additional $80 million would be paid at a later date should an NHL franchise subsequently be obtained.
The city/county would then lease the arena back to the ownership group, with the rent and the taxes covering the debt service on the bonds, which in any case would not exceed the $200 million cap in the MOU, with Hansen's group picking up the rest of the estimated $500 million cost. That's a pretty sweet deal for taxpayers compared to previous arena proposals, as well as those deals struck recently in other cities. There would be no hit on city and county budgets both Mayor Mike McGinn and county executive Dow Constantine promised at today's press conference, and no new taxes. If all goes according to the terms of the MOU, taxpayers are merely lending the bonding authority to borrow up to $200 million cheap.
- Goldy | The Stranger
- Understated and unassuming, Chris Hansen does not come off as your stereotypical multimilionaire.
But then, as Hansen has stated, this isn't about the money. Sitting in a Starbucks atop the Columbia Center about an hour before today's press conference, a somewhat guarded Hansen chatted with me about his motivations, his past, and his future plans for the team, and he certainly didn't come off as your stereotypical multimillionaire out to make a quick buck off of taxpayers (yes I'm talking to you Paul Allen and Clay Bennett).
A born and raised Sonics fan and a graduate of Seattle's Roosevelt High School, this would be the culmination of a lifelong dream. Lot's of kids fantasize about playing in the big leagues, but "when I was five foot four and starting high school, I knew those dreams weren't in the cards," admits Hansen, who says that it was during college that his dreams of someday owning the Sonics started to take form. "I thought if I worked really hard in my life, maybe I would have the opportunity to achieve it someday," says Hansen, "and once I became a little more educated and sophisticated about the way these things work ... I could see the path to this becoming a reality."
Becoming fabulously wealthy didn't hurt either.
As for the remaining obstacles to achieving his dream, Hansen remains relentlessly if understatedly confident. "Seattle's at the top of the list in terms of places where the NBA would like to have a franchise," says Hansen. He refused to speculate where that franchise might come from, saying it wouldn't be appropriate, but allowed that "everybody understands the opportunities out there." (Sacramento, wink, wink.) Hansen says the NHL also views Seattle as the most attractive market it's not currently in, having the entire US Pacific Northwest to itself, and serving excess demand in Vancouver with an arena conveniently accessible via heavy rail.
As for concerns over traffic and parking in the SODO area—a neighborhood Constantine strategically referred to as the "Stadium District"—Hansen says he's listening to the concerns, but insists much of it is overstated. Hansen points out that the arena's 18,000 seats would be far less than the neighboring football and baseball stadiums, and that most of the events will be held at night, hours after the main shift at the Port of Seattle ends. The site is also convenient to commuters via light rail, Sounder, bus rapid transit, and various Metro buses, while being situated at the intersection I-90, I-5 and Highway 99.
"We're really happy with the site we've chosen," Hansen insisted, brushing off my question about whether another site would do. "I think that we did our homework."
Hansen has funded a traffic study being conducted by SDOT, that he expects to back up his analysis, but says he's keeping an open mind about whether he might put up additional funding toward traffic mitigation if needed. "It needs to be reasonable and it needs to be things that we're impacting," says Hansen. "Should we be responsible for solving all of the traffic problems that occur, particularly those that occur during non-operating hours? I don't think that's fair to ask," says Hansen. "But we'll definitely listen."
As for what kind of owner he'd be, fitting to his demeanor, Hansen says a quiet one. "Fans don't want to hear from the owner," says Hansen, "Fans want to hear from the coach, the players, the player personnel people that are making decisions. It's about the sport, and the less you see the owner the better." And when asked to name another franchise he admires, Hansen immediately pointed to the San Antonio Spurs, a consistently playoff calibre team with a number of championships to its credit, and a model of management stability that Seattle fans wouldn't mind following.
Hansen wouldn't predict when his new Sonics might claim their first championship, but he does think that fans will be celebrating sooner than later. "First we have to get a team," says Hansen, but "I do do believe that the day that we have a team will feel a lot like winning a championship."
And for Hansen, it'll feel a lot like a dream come true.