With this week’s announcement that the NHL will begin a process that could lead to expansion teams beginning play as early as the 2017-18 season, interest in an arena for a potential Seattle franchise has been revived. Of the three most likely candidates, Seattle is the one in the U.S. which will require municipal financing support. The NHL application process will begin July 6 and run through August 10, with expansion teams costing at least $500 million.
Municipal Funding
To move forward, Chris Hansen, backer of the NHL franchise, and founder of Valiant Capital Management, would need the city council to vote on a Master Use Permit. However, they would also have to agree to vacate a street south of Safeco Field. Five votes on the city council (up for re-election this November) would be needed to support what opponents will likely call “corporate welfare”—$120 million of the public’s bonding capacity given to Hansen.
Hansen’s current offer to the city (and county) is in a Memorandum of Understanding for “basketball first” that takes a lot of risk on the private side. It would first have to be rewritten to allow hockey and prove that hockey isn’t a riskier proposition. Any proposal that included a replacement for the former Seattle Supersonics of the NBA would get a warmer reception.
King County has been the usual vehicle issuer for stadium financing in Seattle. Prior financings had to be conducted through the County after State support and authorization. In fact, the financing for the Mariners was initially rejected by local voters before the state stepped in. For Safeco Field, the funding package for a new stadium, which supported debt, included a food and beverage tax in King County restaurants and bars, car rental surcharge in King County, a ballpark admissions tax, a credit against the state sales tax, and sale of a special stadium license plate.
The Mayor has already indicated lukewarm support for a package that does not maximize private vs. public investment and the City Council tends to reflect a view that stadium financing is not a good use of local funds. The mayor did say, however, “the NHL news today, I think, creates an opportunity for folks eager to bring an NHL team to Seattle to see what can be done on that (financial) front.’’ There are potential competitors to the downtown project.
RLB Sports and Entertainment has confirmed it sent a representative to Las Vegas. The league is said to be open to any Seattle-area applications knowing that no group would have its arena plans approved until next year. But the NHL has also indicated that it expects any formal application to already have financial arrangements worked out. RLB is said to have secured financing from Citibank for part of an arena, but it continues to seek additional funds for an arena to be located in Tukwila, near the Sea-Tac Airport in King County.
