When the SuperSonics left Seattle prior to the 2008-2009 season, it was largely because the ownership group was unable to secure public funding for repairs to the crumbling KeyArena. They then sold the team to Oklahoma City investors, with the stipulation being that they would try to either lease a different building or secure public funding for a new arena to keep the team in town. That didn’t work out as planned, however, and after a nasty legal imbroglio, the new owners relocated the team to Oklahoma City.
Since then, various entities have made efforts to bring the NBA back to town. A new investment group led by hedge fund manager Chris Hansen came tantalizingly-close to convincing the NBA’s board of governors to relocate the Sacramento Kings to Seattle in 2013, but that move was ultimately voted down.
Hansen hasn’t given up, though. After several years of trying to work out yet another deal for public funding to build a new arena, Hansen’s group has announced that they will forgo that option and instead rely on private funding. They outlined their rationale behind the decision in a recent letter to Seattle’s mayor, via Chris Daniels of KING 5 News:
“Our goal has always been to return the NBA to Seattle and to build a new arena to make that possible. Our partnership with the City and County started five years ago was based on a recognition that private financing of a new arena in the prevailing economic conditions was not economically feasible. The goal of this partnership was to build the arena and bring an NBA team to Seattle. Public financing was simply a mechanism that made that possible at the time.
“We have concluded that a changed economic climate makes possible the private financing of the arena. For that reason, and to address concerns expressed by City Council members, we would consider revising the street vacation petition to eliminate public financing of the arena. In such a case the MOU [Memorandum of Understanding] would be terminated and the rights and obligations of the parties under the MOU would end. The City and the County would recoup the $200 million in debt capacity and tax revenue streams generated by the arena would cease to be encumbered for arena debt service.”
The city council still has to approve the proposal. Earmarking local tax revenue to fund arenas is a common, yet increasingly divisive, practice in professional sports. The city of Seattle has been reluctant to do so over the years, which is a big reason why the Sonics left in the first place and why they’ve been unable make much headway on the current proposal.
One of the alleged reasons the investment group has decided to forgo public financing is because they believe, under the new collective bargaining agreement the NBA and owners are reportedly set to sign soon, the league would be more likely to consider expansion, and having the infrastructure already in place would make Seattle a much more attractive locale.