FIRST REPORT, 7:31 AM: If you’re following the SODO arena story, you are probably more than well aware of reports late last night that City Councilmembers and arena backers reached a deal (here’s what our partners at the Seattle Times wrote). This morning, word’s just in that three councilmembers plan “an announcement” at 9:30 am – if you want to watch live, they’re planning to stream it online (here’s the link). The councilmembers (President Sally Clark, Tim Burgess, Mike O’Brien) were among the eight who sent the arena contingent a letter in late July expressing concerns about the proposed deal.
ADDED 9:58 AM: The briefing’s still under way, but the city has already sent a news release summarizing what’s happened – including the proposed creation of a Port Overlay District – and two links to related documents, including an FAQ. We’ve added those after the jump (also added, 10:31 am, King County Executive Dow Constantine‘s comments):
Seattle City Councilmembers Sally J. Clark, Tim Burgess and Mike O’Brien announced today that they have reached an agreement with Chris Hansen’s ArenaCo for a new sports and entertainment arena they will recommend to their colleagues for approval by the full Council.
The modified memorandum of understanding (MOU) protects family-wage jobs in Seattle’s industrial, manufacturing and maritime sectors by funding freight mobility and other transportation improvements. The MOU also strengthens the legal and financial protections afforded to the City and County, including a personal financial guaranty from Hansen.
“The new and improved agreement with Mr. Hansen makes this a sound step for Seattle,” said Council President Sally J. Clark. “We set out to make sure the general fund is protected, freight mobility is helped and that we have help in charting the future of Key. We achieved these goals.”
The new agreement creates a $40 million SODO Transportation Infrastructure Fund to address longstanding transportation problems in the area. The Fund will initially be a collaboration between the City and County, but additional funding will be sought from other public and private partners, including the Port of Seattle and state and federal governments. Councilmembers also announced that the City will begin an area-wide planning process to strengthen land use protections for industrial lands, including the creation of a Port Overlay District.
The MOU clarifies the environmental review process by requiring an examination of alternative sites, including the Seattle Center, and stating that final City Council adoption of transaction documents will only come after the EIS process is fully completed.
“We strongly believed that public money should be used for broader public purposes. The negotiated changes allow us to address long-standing transportation problems, preserve good jobs and protect Seattle’s taxpayers,” said Councilmember Tim Burgess, Chair of the Council’s committee that analyzed the agreement. “The new agreement demonstrates how healthy skepticism paired with collaboration and good governance can lead to wonderful opportunities for the public.”
In addition to transportation improvements, the new agreement creates a $7 million Key Arena Fund, a portion of which will be used to fund a study of options for the future of Key Arena and the Seattle Center.
The agreement includes significant new financial protections for the City and County, including a personal guaranty by Hansen for the City and County’s annual debt payments. It also requires ArenaCo to double the security reserve if its revenue fails to meet expectations.
“This agreement marks an exciting day in Seattle as we take a big step towards bringing back the Sonics. This is a great deal for the City and County, basketball fans and non fans alike,” said Councilmember Mike O’Brien. “This deal is not just about an arena or the Sonics, it now includes new funding for transportation improvements in SODO, a new path towards protecting our industrial lands, and new money for Key Arena. I commend Mr. Hansen for his good faith negotiations throughout these past few months.”
The revised language gives the City and County the authority to conduct an independent, third party assessment of the financial assumptions underlying the planned construction and operations of the arena and the overall risks associated with both prior to the approval of the final Transaction Documents. The City and County will have access to the same information about ArenaCo and its business structure as the entity’s private lenders. At the end of the arena use agreement, the City and County can require ArenaCo to purchase the land and facility for $200 million.
The Mayor submitted legislation with agreements between the City, King County and ArenaCo to the City Council on May 18. The Council spent two months reviewing the proposal and gathering input from members of the public. On July 30, eight Councilmembers sent a letter to Hansen outlining areas of concern in the proposal and stating a desire to reach a positive agreement.
The Council’s Government Performance and Finance Committee will consider the revised legislation at a special meeting on Thursday, Sept. 13 at 2 p.m. in Council Chambers (600 Fourth Ave, Second Floor). After a vote in committee, the legislation will be voted on by the Full Council on Monday, September 17 or Monday, September 24.
The following documents contain more information on the revised agreement:
ADDED 10:31 AM: From King County Executive Dow Constantine:
“I’m encouraged to learn that City Council leaders have found a way to get to ‘yes’ with Mr. Hansen on a revised memorandum of understanding.
“This is a great sign of progress. I always felt this proposal presented a win-win opportunity to bring back our Sonics, secure an NHL team, and address the existing transportation issues south of downtown.
“Our region has at its core a “can-do” spirit and the ability to work together. We’ve invested billions of dollars in SoDo and made it the largest transportation hub in our region. It is well within our ability to enjoy a new arena while creating sensible solutions to better move people and goods.
“I look forward to reviewing the provisions of the revised MOU.”