09.11.12

Seattle’s Likely Sonics-Revivalist : Flush With Cash, Big On Promises

Posted in Basketball, The Marketplace at 3:09 pm by

Hedge fund manager Chris Hansen is another step closer to never being mistaken with NBC’s predator-nabing ambush artist.  On Tuesday, Hansen personally guarantee to cover the debt if his proposed new Seattle NBA arena is a financial flop, a concession the Seattle Post-Intelligencer’s Nick Eaton calls, “almost unheard of in these kinds of deals.”

Hansen,  who grew up in Seattle but now lives in San Francisco, has asked the city of Seattle and King County to contribute $200 million in bonds to the construction of a $490 million arena in the Sodo neighborhood, south of Safeco Field. Hansen’s own investment group, meanwhile, is willing to spend $800 million on construction and on the acquisition of an NBA team for Seattle.

Among other concerns, the original “memorandum of understanding” in May among Hansen, McGinn and county Executive Dow Constantine fell short of convincing the City Council that the public would be adequately protected from financial risks should the venture not be as successful as Hansen expects.

Over the past few months, city councilmembers were able to negotiate satisfactory solutions to their biggest concerns — mainly that the public would not be left on the hook to pay outstanding debt on the arena, that there would be plenty of reserve funds as financial safeguards, and that the city and county wouldn’t be stuck with a worthless, old building at the end of the 32-year financing period.

“Those three things really helped make the risk side of this equation much better for the city,” Councilmember Mike O’Brien said Tuesday. “It’s not risk-free, but I think it certainly is worthy of the benefits … to make this a good deal going forward.”

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