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PubliCalendar: Arena Hearing Today at 5:30

By Josh Feit July 19, 2012

The $454 Million Question



Seattle City Council member Tim Burgess' budget committee is holding a public hearing (meaning the public gets the microphone) on the $500 million arena proposal tonight at City Hall at 5:30.

The basics are this: San Francisco hedge fund manager Chris Hansen wants $120 million in city-backed bonds to help him build an arena in SoDo. (The county will give him $80 million if he also brings an NHL team; otherwise, they're only on the hook for about $5 million.)

Hansen would pay the city back through: $13 million in annual debt service from taxes on arena activity (sky box suite sales, hot dogs) plus $2 million in annual rent payments (the city is buying the property from Hansen). Any shortfall (the city's conservative estimate puts the debt service shortfall at around $4 million a year) would also be paid by Hansen. (Hansen doesn't think there will be a shortfall.)

Hansen has also agreed to put $2 million a year into a capital fund to keep the stadium up to (ever-changing) NBA standards.

Ultimately, Hansen is on the hook for $454 million in debt service over the life of the 30-year bond repayment.

The $454 million question for the public is this: Does Hansen and ArenaCo (the company that will own the arena and is cued up to sign the deal with the city) along with Hansen's NBA "TeamCo"  (which will actually own the team) and a parent holding company have the money to pay the city back?

The public needs to know more financial details about NBA TeamCo and the parent company (Microsoft's Steve Ballmer and the Nordstroms are investors) to answer that question.
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