Several city council members who were initially skeptical of a proposed arena agreement between the city, county, and San Francisco hedge-fund manager Chris Hansen, including Sally Bagshaw and Tim Burgess, said last week that they now support the deal because it includes a personal guaranty from Hansen; if the arena goes into default and Hansen's holding company can't pay the city back for the bonds it will use to finance the facility, Hansen will make up the difference from his personal funds.
However, King County Council staffers warned the county council—which also has to sign off on the updated deal— about the specifics of Hansen's guaranty this morning. Staffers told the council that the way they read the new deal, the personal guaranty is a one-time-only, five-year agreement: If the project goes into default, the city and county can invoke the personal guaranty, requiring Hansen to pay the outstanding arena bills for up to five years. Similarly, if the project goes into default twice within a five-year period, Hansen will be on the hook each time.
But once the personal guaranty gets invoked, the five-year clock starts running---meaning any financial trouble after those initial five years trouble won't be covered by the guaranty.
"I think the theory is that by the time this personal guaranty would be invoked, you would be in a very bad situation," council central staffer Mark Melroy said this morning. "Within those five years, several other remedies would be pursued, like the sale of the [NBA] team. It gives you a five-year window to pursue all your other remedies.
"It's an enhancement in security, but it's not a failsafe," Melroy added.
The city, it's worth pointing out, doesn't entirely agree with this point of view, arguing that Seattle can still hammer out the details in the transaction documents that will ultimately make the agreement official.
The agreement, as proposed, includes a number of other provisions that make it unlikely that the city and county would ever invoke the personal guaranty, including a provision saying that ArenaCo's parent company (currently known by the placeholder name ParentCo) would have to pay for any financial shortfall first, a provision allowing Hansen to sell the team to help make up any financial shortfall, and an agreement that Hansen will, if selling the team after a default isn't enough, buy the arena itself back from the city.
Today's second winner: King County sheriff candidate John Urquhart.
In a smart political move, King County sheriff candidate John Urquhart announced today that, if elected, he would appoint former Spokane police chief Anne Kirkpatrick as his deputy chief. Last week, three female detectives in the sheriff's department, currently headed by Steve Strachan, filed claims seeking up to $9 million for alleged sexual harassment and verbal abuse by male sergeants.
And today's loser: Stand for Children
In this year's primary, the hard-line education reform group Stand for Children supported Democrat Guy Palumbo as the insurgent Democrat against incumbent 1st District Democratic state Sen. Rosemary McAuliffe (D-1, Bothell). Stand believed that McAuliffe, as chair of the senate education committee, had blocked their reformist agenda. PTA dad Palumbo was a strong backer of their agenda.
However, Palumbo, who lost in the primary, de-prioritized Stand's agenda (including charter schools) today by endorsing McAuliffe.
In a statement, Palumbo said:
The primary campaign was defined, by outside groups and the press, as a fight over education and charter schools. It was probably inevitable in a race that pitted the head of the Early Learning & K-12 Committee against a Northshore School Board member. Especially in a year that the charter school bill is on the ballot. However, there is a problem with the theme that developed in the primary.
After knocking on over 4,000 doors in this district, I can count on two hands the number of times charter schools came up in conversation. It was not the most important issue for the voters I spoke with.
The issues that I heard about over and over again at the doorstep were: jobs, health care costs and accessibility, partisanship getting the way of progress and tolling/gas taxes – in that order.
He went on to say McAuliffe was better on those issues.
Lucky for Stand, they also supported McAuliffe's other opponent in the race, Republican, Dawn McCravey, another ed reformer. In fact, Stand put $50,000 into an anti-McAuliffe independent expenditure campaign yesterday.