Thiel: An epiphany in the history of Seattle sports

To all the supporters of his basketball/hockey arena project, Chris Hansen Tuesday offered what is believed to be a first in the history of American pro sports would-be ownership (digital era):

An invitation to readers of his arena website: “Beers on me.”

And in a more formal response emailed to media outlets, Hansen wrote what may be a first in the oft-lamented history of constipated municipal government in Seattle: “The process worked.”

To offer a summary even more tidy for opponents whose legitimate points contributed to the outcome, we offer, in the spirit of splendid compromise, a single new word: Congratu-shutup.

Tuesday’s benchmark does not mean the arena is guaranteed to be built. Doesn’t mean the arena will be in SoDo. Doesn’t mean we won’t hear “Ahem . . .” “Um . . .” and “Wait a minute . . .”

Things happen in land-use projects. The first shovelful may discover the remains of the first Native American strip club, which contains the first known buffalo-tail tassels.

That’s not the point for Tuesday. This was the day is for celebrating something close to unique in Seattle’s civic history, as well as a template for public-private sports-building partnerships nationally in the new normal of post-recession government inertia:

A little sumthin’-sumthin’ that works for almost everybody.

The amended deal that Hansen struck with the city council budget committee Tuesday, months in the making and still to voted on by the full council, is a testament to what can happen when no one is out to screw anyone.

Even Pete von Reichbauer, one of three King County Council members to vote no on the county’s version and the project’s most strident critic, said if the proposals are adopted, “they will address many of the concerns I raised in opposing the initial proposal  . . . The proposed amendments put the public back into the process. Just as you cannot build an arena on a weak physical foundation, government officials should not commit public tax dollars without a strong public process.”

The memorandum of understanding introduced months ago by Mayor Mike McGinn and King County Executive Dow Constantine is now a significantly smarter, more comprehensive and secure document, which benefits a public that includes the Port of Seattle and non-sports SoDo users, who now at least have $40 million from the arena project to start to sort the traffic congestion.

It is enough? No one knows. But it sets the table to fund an overdue discussion about how to avoid diminishing a community asset that had problems long before Hansen showed up. That discussion will also include a commitment to define and preserve maritime and industrial uses of SoDo, a concession that may help curb the gentrification that many who work there feared would accompany the new arena.

Is it enough? Not sure. The port and the metal-bender shops have been through promises and commitments before with the city; skepticism is warranted. But the port has has bigger management problems than an arena location, and its CEO, commissioners and unions have to realize they have leveraged the arena location dispute to the maximum reasonable civic attention and funding.

Is it enough for the Mariners? Notice I wrote above “almost everybody.” The Mariners get little out of this deal. The baseball club’s agenda all along, serviced by the Seattle Times editorial board, has been to halt the threat of more competition for the sports dollar, with a barely plausible cover story of traffic congestion. Ownership is left now with one option: FIELD A QUALITY TEAM!  Even Hansen can’t fix that.

So what has Hansen done? He took one for two teams: the community in which he grew up, and community that he joined — phenomenally wealthy guys with cash to burn.

After committing $290 million of private money that was dedicated to creating just a building, he gave in on the point about using some revenues to help fix a problem he didn’t create: Existing traffic. Belatedly — and this is on McGinn, who should have told him what was in store — Hansen became aware that taxpayers in general and the city council in particular had too much scar tissue from past sports-building fiascoes to allow Hansen’s original, break-even MOU proposition, to stand.

They had to have something to show the city will do better than break-even.

So he agreed to divert arena revenues that would have gone to construction-debt retirement: $40 million for an infrastructure fund and $7 million to essentially help preserve KeyArena for the short- and mid-term. The $47 million will be under exclusive city control. So I-91 fans of a return on pro-sports investment, please stand down from the discussion.

Then Hansen offered a third concession, which is a big part of why this deal may become a landmark.

If worse comes to worst, he put his own hindquarters on the line. To quote from the council’s summary document on the MOU changes:

“The principal owner of ArenaCo will provide a personal guaranty that protects the city from shortfalls in the revenues needed to pay debt service and ensures that all outstanding debt will be repaid should the Arena not prove to be financially successful.”

That means Hansen has no corporate entity to hide behind in the event of bankruptcy. No hitting up Steve Ballmer or the Nordstroms for a bailout. No Howard Schultz-style, whiny-ass whimpering when the team under his stewardship loses money by failing to make the playoffs while paying high salaries.

As Seahawks coach Pete Carroll likes to say, Chris Hansen is all in. Which just might make him Public Enemy No. 1 among the members of the club he wishes to join — pro sports owners. Fellas: Deal with it. It’s the new now.

It’s not that some other pro sports owners failed to have skin in their games. It’s that very few of them agreed to be the safety net BEFORE a building is built and BEFORE a team has been purchased.

The risk for Hansen is relatively small: A lot of bad things will have to happen with the arena before the city turns to him to pay the mortgage (a debt that can’t begin under after he secures a team). But the symbolism of having a rich guy agree 100 percent to protect the municipality in the event of default before he even owns the woebegone Sacramento Kings (just sayin’) is extraordinarily rare.

The man is out there. Then again, as a hedge fund manager, he’s used to risk. Remember, this is a guy who owns 1.8 percent of Facebook, which right now as an investment is  second only to the Gynecologists for Todd Akin U.S. Senate campaign.

Amid the whoops and backslapping that accompanied the moment, council president Sally Clark said something simple and trenchant that helps explain what Hansen did during negotiations.

“I really applaud him,” she said, “for listening to our concerns.”

In an age marked by shouting and fear-mongering from a massive digital array of  24/7 media platforms,  Hansen threw down with an increasingly forgotten analog tactic: Listening.

He learned that too many constituencies would stand in his SoDo way if he kept to the deal McGinn and Constantine proposed.

The council listened too. Members learned he will borrow much of the money for the arena construction — a common practice for developers of any stripe —  and if he gave away too much of his revenues, no banks would deal with him. (Remember, Hansen still needs to spend about $350 million, mostly cash, to buy an NBA  team).

Together with Hansen’s advisers, the council, primarily Tim Burgess and Mike O’Brien, their staffs and outside consultants, added layer after layer, week after week, of changes to the MOU that made it acceptable to all. They will probably complain privately that this sort of deal should have been done by the mayor’s office a while ago, but as Burgess adroitly put it Tuesday, “It’s like an alley-oop; he threw the pass and we dunked it.”

As the presser broke up, O’Brien’s smile nearly demanded sunscreen for nearby observers.

“This is a little self-serving today, I know,” he said, “but I think this was a great example of local government at its best.”

Sure it’s self-serving, and we all know time will tell. But it’s a feat that many thought was highly unlikely. Now it’s a milestone, like pencil-marks on door jambs for kids going vertical.

Hansen wants to mark this growth by inviting the part of the local world that cares to come down Thursday from 5-7 p.m. to venerable F.X. McRory’s bar in Pioneer Square, where many a Seattle sports triumph or defeat has received an alcohol bath.

Hansen says he has the first round. The second should be on sports fans, with a toast to Hansen, his aides, the Seattle and King County politicians and staffers who have labored so strenuously to get to a local yes in a time of national no:

“To Lenny, Bill, Freddy, Jack, Wally, Gus, D.J., J.J,, Lonnie, X, Tom, Dale, Nate, George, Sam, Hersey, Detlef, Shawn, Gary, Ray and many other green-and-golds known by a first name:  Sonics homecourt advantage is coming.”