How The Sodo Arena Plan Would Work
Here's an outline of how it works:
- The investor who's pushing the arena plan, Chris Hansen, obtains land for the arena in Sodo.
- The City of Seattle would buy the land from Hansen, using government bonds that are backed by future taxes on arena events.
- Then, the city would lease the land back to Hansen.
- Hansen would build the arena. He could end up paying property tax on the building for at least a year.
- After that, the city and King County would purchase the arena.
- Hansen would personally guarantee to cover any shortfalls or debt.
- Hansen, the city and the county would contribute toward an account that would pay for transportation improvement in Sodo.
The plan is detailed in a memorandum of understanding (PDF).
Opponents To The Plan
Critics of the plan include the Port of Seattle and maritime businesses. Among other things they say that a new arena in Sodo would attract increased traffic and make it harder for them to do business.
Also, a Seattle longshoremen's union plans to announce a lawsuit Monday to stop the proposed Sodo arena. An attorney representing the union said the actual filing will happen later, after the expected passage of the legislation.
Supporters Of The Plan
Supporters include many Seattle-area officials, including King County Councilman Joe McDermott, the chair of the council's budget committee.
He said it makes sense to use public resources for an arena, arguing that professional sports have a cultural value. "This proposal, which an independent expert has said is the strongest public-private partnership that he's seen in a decade of studying them, uses only new revenue from existing taxes to pay back the county's investment which would be financed by bonds — less than three percent of the county's outstanding bond capacity. So I think it's a very solid investment for the county," he said.
When asked why public bonds were needed for the plan, McDermott said public involvement lowers the borrowing cost. "We can finance over a longer period of time, and those factors make it much easier to pencil out, and successful for the private investor. It wouldn't otherwise be profitable and therefore it wouldn't happen," he said.
One looming question is how Hansen would actually get an NBA team. We'll have to stay tuned for that.
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