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April 12, 2013 at 11:26 AM

Judge dismisses lawsuit against proposed Sodo arena

A King County judge this morning dismissed a lawsuit aimed at blocking construction of a new arena in Sodo.

Superior Court Judge Laura Middaugh determined that there are too many unknowns to the proposed arena deal to rule now. Investor Chris Hansen is leading a group that wants to build the arena with the hopes of bringing an NBA basketball team and possibly an NHL hockey team to Seattle.

The suit, filed in January, alleged the arrangement, which calls for $200 million in public money to be repaid through arena revenue, violates the terms of Initiative 91. The measure, overwhelmingly approved by Seattle voters in 2006, said the city must make a profit on any investment in a sports facility.

The plan, the lawsuit says, “lacks fair value” because most of the sums to be repaid represent unsecured future cash revenue or interest repayment that is not allowed under the initiative.

“We think there is a massive shortfall in fair value because you can’t count the unsecured future cash,” said Seattle attorney Cleveland Stockmeyer, who filed the suit on behalf of Mark Baerwaldt, a drafter and sponsor of I-91, and three other Seattle residents labeled respectively as a taxpayer, a Sounder train conductor and a railroad switchman who serves as a United Transportation Union leader.

Middaugh said this morning the city’s agreements with Hansen to build the arena are not yet finalized.

She said the city must still complete an environmental review and final documents. Only when the final terms are known can the court determine whether the agreement meets the terms of I-91, Middaugh said.

“We agree with Judge Middaugh’s ruling that the I-91 lawsuit brought against the City and the County is not ripe,” Mayor Mike McGinn said in a statement. “The City and County are in the middle of following the decision-making path laid out by the [memorandum of understanding], and not until the end of that path will the Councils decide whether to go forward with public financing for the proposal.”

“This ruling is yet another in a long line of affirmations that the city and county are doing things right in the effort to bring the Sonics home,” added Metropolitan King County Executive Dow Constantine.

Comments | More in Arena, Chris Hansen, Kings, Sonics | Topics: King County Superior Court


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