Both councils approve Sodo arena plan, but process not finished

The King County Council and Seattle City Council each voted Monday to approve a final financing plan for the proposed sports arena in the city's Sodo neighborhood, marking the end of the initial political debate and handing the process off -- for now -- to the arena's main investor, Chris Hansen.

Hansen now has the support he needs to go shopping for an NBA franchise to relocate to Seattle -- a prerequisite needed before construction can start on the proposed $490 million basketball and hockey arena.

"I hope that in fact this does lead to the return of the SuperSonics," King County Councilmember Joe McDermott said at Monday's council hearing.

Now, a state-mandated environmental review will analyze an arena's effect on the Sodo neighborhood, the Port of Seattle, and the surrounding industrial lands, plus will look at at least one alternative site for a new venue. Those studies are expected to take about a year.

After the State Environmental Policy Act (SEPA) study is completed, the city and county councils will have the option to move ahead with the Sodo arena or kill the project in its tracks.

"This is a journey," King County Councilmember Pete von Reichbauer said Monday. "We are at Camp Muir. We have not climbed the mountain. There are still plenty of challenges. But you have to build a strong foundation."

Von Reichbauer, who voted no on the arena proposal in July when the King County Council first took up the legislation, said the county and city councils have done a great job to amend the proposal with extra financial protection for taxpayers, support for the port and Sodo industries, consideration for KeyArena, and other safeguards to keep the risk to the public at a minimum. 

Though both councils had voted for the arena before Monday, they both had to re-vote on each other's amendments to the legislation. The councils had to approve the same document Monday for the process to move foward.

Hansen, Seattle Mayor Mike McGinn and county Executive Dow Constantine drafted up a "memorandum of understanding" (MOU) to send to the city and county councils in May. The MOU covered financial agreements among Hansen's investment group, the city and the county for public help building the new arena.

The arena investors, led by Hansen, asked Seattle and King County to contribute a total of $200 million in bond capacity for the arena -- essentially big public loans to assist with construction. Under the agreement, those loans would be paid back over 32 years using existing taxes on future arena revenues, including taxes on venue operations and team rent at the facility.

No new taxes would be created to fund arena construction. Only people who attend games at the new venue would help pay for it.

But when the proposed legislation got to the councils this spring, it was met with intense Seattle scrutiny. Over the past several months, as groups like the Port of Seattle and manufacturers unions voiced their opposition to building a third stadium in Sodo, councilmembers had been negotiating with Hansen's group to add extra financial security for local taxpayers and extra support for neighborhood stakeholders.

"Together we have a product that has the potential to be one of the better deals in the country," King Council Councilmember Larry Gossett said Monday.

The County Council initially approved their amended version of the arena MOU in July, voting 6-3 in favor of Hansen's proposal. Then, in late September, the City Council voted to pass their own amended version, which included a marquee guarantee by Hansen to personally fill the budget gap if his entire venture goes south.

Monday's votes occured because each council needed to approve all the amendments.

In their hearing Monday afternoon at the King County Council chambers, all nine councilmembers voted unanimously to approve the arena financing plan. Less than an hour later, at Seattle City Hall, the City Council voted 7-2 to adopt the same document.

City Councilmembers Nick Licata and Richard Conlin, who had been consistent skeptics of the plan, were the two who voted no Monday.

"I thank the city and county councils for their hard work and their approval of the arena memorandum of understanding," McGinn said in a statement. "This is another important step toward bringing the Sonics back to Seattle."

McGinn and Constantine are planning to sign the arena legislation Tuesday afternoon, during a ceremony at the Rainier Vista Boys & Girls Club at 1:30 p.m.

Nick Eaton can be reached at 206-448-8125 or nickeaton@seattlepi.com. Follow him on Twitter at twitter.com/njeaton. Visit seattlepi.com's home page for more Seattle news.