What’s an MAU?
On Wednesday, investor Chris Hansen, Seattle Mayor Mike McGinn and King County Executive Dow Constantine held a joint press conference in Seattle to update the Seattle Arena Proposal project.
They announced a Memorandum of Understanding between Hansen and his investors and the city on the proposed NBA and NHL arena in the Sodo District in Seattle.
This is the next step in the process to getting the proposed arena built. If you don’t know the basic details, let me fill you in real fast.
Chris Hansen grew up in the Seattle area before moving down to the San Francisco area for business. He and a group of investors put together a proposal to build a new multi-purpose arena in the stadium district in downtown Seattle.
The arena would be just on the other side of the Mariners parking garage. Hansen and his team has acquired all the land necessary, and then some, to make this proposal happen. They want to bring the NBA back to Seattle as well as an NHL team. The arena would be used for other entertainment purposes as well when not being used by the pro teams.
Now onto the update.
The MAU was announced at the Wednesday press conference and bodes well for the proposal’s shot at passing. It is now moving onto the Seattle City Council and the King County Council to be voted on. While the proposal isn’t expected to pass with 100% of the members of each council, it is believed so far that it will be approved after both councils vote by the end of the month.
Here are some interesting quotes and notes from the press conference.
Mayor McGinn, when talking about the agreement with Hansen and his ownership group kept using the terms “investment” and “partnership.” These are good terms when looking for positive signs that this will get done. If they think highly enough of the group to use those terms, then they see this as a true positive despite the qualms others may have about the proposal.
McGinn, while breaking down the proposal terms in the city’s perspective, had these quotes outlining the positives of this deal:
“Meets commitment to protect existing resources in the city and county general funds”
“Made protections that substantially mitigate any risk”
He said there would be no new taxes for construction or operations and that the project is completely self-financed (by using revenue that would not otherwise exist if it werent for the operation of the arena.)
There is a “binding non-relocation agreements for the NBA and NHL teams will be in place covering the full term of any public financing.” Basically, depending on the bonds used to help fund the arena, the teams cannot relocate while those bonds are still being paid off.
There is a “security reserve fund will be established to provide another layer of taxpayer protection for the duration of the public debt.” If the team doesn’t do well financially, the city will not have to take over immediately.
They will be able to reach into a reserve fund to cover those losses
In addition to that, McGinn said the group is “solely responsible for any cost overruns and operating revenue shortfalls over the life of the facility, including a capital improvement fund.”
McGinn said they are looking for a “fair return” and see this proposal as offering just that.
There will be “annual debt services guaranteed by the investors.”
There will be “no public funds will be committed until franchise acquisition and all environmental review and permitting processes are completed.” This basically says that the city must have an agreement to obtain an NBA team before they start building the arena.
The city and county will be in the first-tier position in the highly unlikely event of a financial default and it conforms to initiative 91. So if the team goes flat broke, the city and county will become new owners of the facility.
Lastly, this deal would bring up to $800 million in private capital to the city of Seattle. This is an unprecedented amount and will be in the top 3 in history for privately funded stadiums and arenas.
As Mayor McGinn finished his speech, he echoed a sentiment that should be the forefront of this arena proposal movement. He said that when you create jobs and bring people to the city, it’s a good thing. This proposal would do exactly that.
By month’s end, we’ll know how this ends up. Hansen is currently funding a traffic study that will be done by the time of the councils’ votes and everything should come together at once with the passing or failing of this proposal.
What can you do to help?
Thursday, May 31st the Seattle City Council will be hearing public comments on the arena proposal at 9:30am. This will be taking place on the 2nd floor of City Hall.
Hansen also expressed in the past that people who would like to support the cause should write a letter to the City and County councils as well as the NBA to let them know how badly this city wants and needs a team.
By showing them how passionate Seattle fans truly are and the great desire to have an NBA team to support, it may tip the scales when it comes time to decide.