Despite comments from NHL Commissioner Gary Bettman that three groups expressing interest in owning an NHL franchise in Seattle have contacted him, there is little likelihood that the agreement between Chris Hansen and the city and county will be changed to accommodate hockey ahead of an NBA team.
Responding to an email from Sportspress NW, City Council president Tim Burgess wrote Tuesday that the memorandum of understanding is unlikely to be changed because the financial risk is too high.
“I don’t believe the MOU could be modified to allow an NHL team to go first,” Burgess wrote. “During our initial consideration of the MOU, it was quite clear that the financial risk to the city increased dramatically with the NHL-first scenario.”
A source within the group helping Hansen, the Seattle native who has proposed a $500 million basketball/hockey arena in SoDo, said Hansen has given no consideration to asking the city to change.
“Chris has not proposed changing anything,” he said. “He’s always said he’s a basketball guy.”
Speculation shifted to the NHL after Hansen’s bid to relocate the NBA Kings from Sacramento to Seattle was shot down in May by a 22-8 vote of owners. Later in the summer, the NHL Phoenix Coyotes threatened to leave if politicians in suburban Glendale didn’t give in to their demands for a subsidy. The team’s prospective owners went so far as to inquire about dates to use KeyArena for two or three seasons until Hansen could build an arena, but the subsidy demand won a close vote.
The increase in speculation about a Seattle expansion franchise was fueled by Bettman and NHL owners speaking positively about a team in the robust Seattle marketplace, but wasn’t grounded in the reality of changing Seattle politics.
Burgess last summer led the council’s successful modification of the MOU first struck by former mayor Mike McGinn with Hansen. Burgess helped negotiate Hansen’s assumption of greater risk while reducing exposure for the public contribution, which was primarily the borrowing of $200 million at rates far cheaper than those available to commercial developers.
The calculation of payback was based on assumptions from revenues of a league with a 41-year history in Seattle and a more robust national profile that included $1 billion in national TV contracts. The NHL has no modern history in Seattle, nor does it have a lucrative TV deal in the U.S.
Even though Hansen was willing to take on more financial risk than any previous owner in Seattle sports, opponents questioned whether the city’s borrowing capacity should take on any risk associated with a non-essential investment. Other opponents have objected to the location in SoDo, next to football and baseball stadiums already crowding the Port of Seattle’s congested transportation on the waterfront.
An environmental impact statement mandated by state law is under way comparing the SoDo site with two at the Seattle Center. The draft version was released in August for public comment. In January, the city’s department of planning and development issued a request for more information from Hansen’s ArenaCo organization largely about transportation and parking issues.
Hansen’s group has yet to respond, pushing back the release of the final EIS from sometime in March to sometime in September. After that, opponents have indicated their willingness to challenge in court a document whose draft version they deemed inadequate.
Since the EIS review has begun, the NBA saw the retirement of commissioner David Stern, long a Seattle antagonist. But his successor, Adam Silver, indicated he had little interest in the foreseeable future in expansion, leaving only relocation as a possibility. The only team possibly vulnerable is the Bucks in Milwaukee, where the arena is old and small.
But Hansen has expressed his reluctance to go through any battle similar to the experience with Sacramento, which became a bidding war for a free-agent franchise unprecedented in American sports. And the NBA is loathe to relocate a franchise, particularly after going through a lockout to obtain a new collective bargaining agreement that may allow every team to at least break-even in the next few years.
The city’s strong reluctance to re-open the MOU doesn’t mean it will never happen, because things change. Hansen and his partner, retired Microsoft CEO Steve Ballmer, could make an offer to change the MOU to reduce again the public risk.
But for now, it seems that there is no sentiment on the council to do anything but wait on Hansen’s ability to deliver an NBA team, which would trigger public participation — if the SoDo proposal survives inevitable objections to the final EIS.