On Thursday, the Sacramento Kings will play their first game in a new arena that the city chipped in $255 million to build. They scraped together that money in 2013 in order to win an arms race with billionaire Chris Hansen and the city of Seattle. Hansen’s offer to the Maloof family was $39 million higher than the eventual winning bid, but Sacramento offered to pay up more than Seattle did. Then-commissioner David Stern helped push the Kings arena proposal through the relocation committee with a unanimous vote because of the incredibly owner-friendly precedent set by the city kicking in so much money. Stern used relocation as a cudgel and he got what he wanted.
Hansen has continued his efforts to get an arena deal through up north. A measure turning over a chunk of land near the Port of Seattle was expected to pass a city council vote in May, but they rejected it, 5-4, due to the $200 million in bonds the city was to offer, as well as opposition from the Port. Hansen is still trying to build an arena in the SoDo neighborhood, which is adjacent to where the Mariners and Seahawks play, and today, he wrote a letter to the mayor pledging to finance the whole thing himself, along with three partners.
The letter says that he doesn’t need any direct money from the city, just for the city to vacate a strip of land (that he owns) and grant a waiver on admissions tax to the arena. He also writes that he and his group plan to build a new overpass for the port to ease traffic concerns.
Our goal has always been to return the NBA to Seattle and to build a new arena to make that possible. Our partnership with the City and County started five years ago was based on a recognition that private financing of a new arena in the prevailing economic conditions was not economically feasible. The goal of this partnership was to build the arena and bring an NBA team to Seattle. Public financing was simply a mechanism that made that possible at the time.
We have concluded that a changed economic climate makes possible the private financing of the arena. For that reason, and to address concerns expressed by City Council members, we would consider revising the street vacation petition to eliminate public financing of the arena. In such a case the MOU would be terminated and the rights and obligations of the parties under the MOU would end. The City and the County would recoup the $200 million in debt capacity and tax revenue streams generated by the arena would cease to be encumbered for arena debt service.
The MOU that he references is a Memorandum of Understanding signed by Hansen and the city that outlines the skeleton of a potential arena deal. It was set to expire in 2017 if Hansen hadn’t found a franchise by then, but it would be superfluous under this new arrangement. All told, the concessions Hansen is asking of the city are not that significant, especially since he will pay $18-20 million for the street vacation.
Getting an NBA franchise will be much trickier. No teams appear to be obvious candidates for immediate relocation, especially since Sacramento and Oklahoma City have relatively new arenas. Hansen could pursue an NHL team, but that will also be tricky. He doesn’t have the exigency of the MOU to contend with any longer, and if the NBA is truly considering expansion to Seattle, their arena problem has theoretically been solved for them.
Here is Hansen’s full letter, via KING5.