Chris Hansen, the man leading the investment group to bring the Sonics back to Seattle at a new arena, said he has no intention of replicating L.A. Live in Seattle’s Sodo neighborhood.
Hansen got on the phone with me while I was researching my Thursday column, “Sonics fans, it’s time to give your heart a break.” In the column, I write that I want The Squatch back. I know an NBA team will be coming back to Seattle, eventually. But I don’t want a team to come back to a new arena in Sodo.
The rightful home of the Sonics isn’t just Seattle, it’s Seattle Center. Memorial Stadium, the area in the Center that Seattle Schools wants to sell to the city, is the ideal place to build a new NBA arena, and the city should put together a financially attractive deal for Hansen to consider. This sounds like a job for a new mayor, and we’ll be electing a new one this year.
Here are edited excerpts from our interview, in which he talked about L.A. Live, the rumor that he is out to gentrify Sodo and whether he will endorse a candidate for mayor of Seattle.
Me: I read the front page Seattle Times news story about L.A. Live so I just want to ask you directly: Do you want to build an L.A. Live in Sodo?
Hansen: I didn’t think that was a fair presentation of what we’re trying to do. No matter how clear we try to be, people keep taking it a different way and I’m not exactly sure why.
I think a couple things I would say is one, we plan to do something on a much smaller scale on only the block north of the arena site. We only own three properties there and we plan to do something that is much different from L.A. Live. We want to have a gathering spot for our fans and other fans from the stadium district but it would be something more in line with Seattle. I think you would expect it would look much more like an extension of Pioneer Square and it would consist of local restauranteurs and merchants. … We said that over and over and over again, we would like to build an entertainment area but it’s much smaller. Our vision would not look or feel anything like L.A. Live.
L.A. Live is meant for L.A. It fits their market. Kansas City Light and Power is much more the look and feel [of what we want to do]. It has a covered atrium, is used for a gathering spot, has more local merchants, it’s brick, fits the city.
I read your last article…
(Hansen brings up a blog post I wrote as a companion piece to Dave Gering’s guest column about Sodo and L.A. Live. In the post, I wrote, “Hansen’s reasoning for choosing Sodo is that it would be cheaper to build from scratch than to tear down KeyArena first and build a new arena in the same spot. That, and because Sodo offers far greater return from a a real-estate investment perspective.”)
Me: OK, let’s talk about the return on investment in real estate in Sodo. Because the conspiracy theorists believe you want to gentrify Sodo and drive out the Port of Seattle and manufacturing businesses.
Hansen: We have never said that. Why do people keep saying that? Keep in mind this project, on the team and the arena, will be well in excess of a $1 billion project. These three little real estate parcels we own cost about $15 million. Trying to get a reasonable return on whatever the return on whatever we do is not going to put a dent in the return on investment for buying the team. We are putting this out there because we think it’s a great fan experience for our fans.
We double our money there, that’s 0.15 percent.The cynics are out there. Is there any calculation going on out there? If we ten “X” the money, that’s 1 percent. The law of the numbers here has to take into account, we just don’t own enough property in the area, Bartell’s owns the property to the north, the strip club does not want to sell.
Me: Those are important facts to highlight.
(Just to follow through on his math: Ten * $15 million = $150 million. $150 million – $15 million = $135 million. The percentage change between $1 billion and $1.135 billion is a 1.4 percent increase. I see his point: You could make more investing your money elsewhere. But I maintain that it’s a crazy, great investment deal. The value of an NBA team is the team plus the arena it plays in. Team owners get the return on the investment when they sell the team.)
Me: I know you’ve said it to others but I want to ask you again. Why can’t we renovate KeyArena?
Hansen: We cannot tear down KeyArena and play in it at the same time. Our deal with the city cannot work unless we have an NBA arena to play in because neither the city nor us is going to build an arena on spec.
The only other site talked about is Memorial Stadium. … We did not have that ability to purchase that property, and then you’re still left with all the other complications. You’re left with difficulties of parking, ingress, egress, construction on city-owned lands potentially. These issues make it prohibitive for the cost of building the arena. We felt the cost of the arena would be much cheaper and easier in Sodo and as the private developer sponsoring the project that’s our decision to make. The city certainly has right to disagree with the site, that’s what the EIS (environmental impact study) and public process has been about.
Me: What about the other theory that you and real-estate investor Henry Liebman are speculating on Sodo land prices going up with gentrification of an manufacturing area?
(For background, here is a 2007 Seattle Times news story about Liebman buying up 40 acres in Sodo.)
Hansen: The only thing that I have done with Henry Liebman is buy a property he owned in the area and he made a profit. … I don’t have any other agreement with Henry. Henry has his own real estate development going on and his own vision for what should go on down there. There’s other people we bought property from and there’s other developers down there. You should talk to them. We’re focused on building a stadium and building parking and building a small entertainment district.
Me: I definitely see that as the developer, you want the best return on your investment. And I believe Seattle Center is the rightful home of the Sonics. It’s on the city to make a deal that’s financially attractive to your investment group to build an arena at Seattle Center that makes up for the higher cost of building there.
Hansen: It is on them. I cannot tear down KeyArena and build it in a manner that’s acceptable for the NBA to play in while the arena is being built. Unless the city wants to tear it down and build it itself. We’re not going to build an arena on spec. …
(Note: He does not say anything specific about Memorial Stadium.)
Me: What if the environmental-impact study (EIS) says no to Sodo but yes to Seattle Center or the Eastside? Would you consider building at Memorial Stadium?
Hansen: We’re open to the EIS process. … The EIS is not necessarily about can you build or not build. It’s not usually a go or no go decision, it’s what you need to do to mitigate.
(In my column, I suggest a newly elected mayor would be the ideal person to come up with an arena deal that is more attractive than building in Sodo, a deal that would sell the Memorial Stadium plot to Hansen’s group, and accounts for his real-estate purchase in Sodo and the higher cost of building in Seattle Center.)
Me: Have you endorsed or do you plan to endorse a candidate for Seattle mayor?
Hansen: I’m not a Seattle resident. I don’t know what business I would have endorsing anyone in Seattle. I’m a resident of Marin County.
(Hearts break at mayoral forums across town.)