Ballmer, Nordstroms part of Seattle arena investor group
Microsoft CEO Steve Ballmer and two members of the Nordstrom family are part of the investor group seeking to bring a National Basketball Association franchise to Seattle, San Francisco hedge-fund manager Chris Hansen announced Wednesday.
Seattle Times staff reporters
The announcement Wednesday that two names synonymous with Seattle business and civic identity — Ballmer and Nordstrom — are part of an investment group to build a new Seattle sports arena buoyed supporters and eased some concerns of local politicians.
But the presence of Microsoft CEO Steve Ballmer and Erik and Peter Nordstrom among the investors joining San Francisco hedge-fund manager Chris Hansen to build a proposed $490 million arena in Sodo cuts two ways, say city- and county-council members, who must still approve the deal for it to take effect.
Metropolitan King County Councilmember Pete von Reichbauer said some constituents already are asking why an ownership group that includes one of the richest individuals in the world needs up to $200 million in public bonds to finance the deal.
"If Steve Ballmer is involved why aren't they funding it privately, like the new owners of the [NBA's Golden State] Warriors in San Francisco?" von Reichbauer quoted the question posed by one.
The announcement by Hansen, in a letter to King County Executive Dow Constantine and Seattle Mayor Mike McGinn, came on the eve of a public rally planned for Thursday afternoon in Occidental Park in Pioneer Square to show support for the arena proposal.
It also comes as both the Seattle City Council and the County Council have called for full disclosure of the investment group before they give approval to an agreement Constantine and McGinn reached last month with Hansen.
That proposal calls for a commitment of up to $200 million in public bonds to help finance a new 18,000-seat arena.
Constantine said the involvement of Ballmer and the two Nordstroms will ease some concerns about the credibility of Hansen, a wealthy, though previously unknown out-of-towner who rocked the city in February with the disclosure that he and other investors were willing to spend up to $800 million to build a new, state-of-the-art sports and entertainment venue and purchase an NBA team.
"For those who don't know Chris Hansen well, the presence of these well-known business and civic leaders will certainly inspire confidence in the proposal," Constantine said. "These local leaders are ready to put not just their money, but their credibility behind the deal."
According to Forbes ranking of the world's billionaires, Ballmer, 56, would be the league's richest owner. Forbes ranks Ballmer 44th (and 19th in the U.S.), with a fortune of $15.7 billion. It ranks Microsoft co-founder Paul Allen — currently the richest NBA team owner — at 48th globally with $14.2 billion.
The Nordstroms aren't on the Forbes list. The stake of Erik Nordstrom, 48, in the Nordstrom company is worth $118.6 million and that of Peter Nordstrom, 50, is worth $117.4 million. That's based on their holdings as of March 30.
Hansen did not release the financial stake that the three have in the investment group, but said they would have an interest in both the arena and a new NBA team. He also said that as many as 10 investors would be involved, but that the others were not yet ready to be publicly identified.
City- and county-council members have said the identities of all the investors as well as an analysis of their financial strength will be necessary to approve any public financing of the project.
Ballmer, who succeeded Microsoft co-founder Bill Gates, is known as a fierce competitor and avid basketball fan. He was a regular presence at Sonics games and was part of a failed, 11th-hour effort to expand KeyArena and prevent new Sonics owner Clay Bennett from moving the team to Oklahoma City in 2008.
Ballmer has long been rumored to be interested in bringing professional basketball back to Seattle. He told a Seattle Rotary Club luncheon last year that a competitive building was essential to getting an NBA team and that KeyArena, where the Sonics played, could not be made competitive.
Through a spokeswoman, Ballmer declined to comment on his involvement in the new arena project.
The Nordstroms also have a long history of involvement with Seattle sports. The family was a majority owner of the Seahawks from 1976 to 1989. Both Peter and Erik played basketball at the University of Washington. In a 2004 profile, Peter Nordstrom said he remembered collecting autographs as a boy of Sonic stars Slick Watts and Spencer Haywood.
But Peter Nordstrom also was a minority owner of the Sonics when they were sold by Howard Schultz to Bennett, a sale that many Seattleites blame for the loss of the team.
"I have been very impressed with Chris' thoughtful plan to build a viable arena that makes Seattle an obvious choice for a successful NBA city. There are many details to work through and lots of work yet to be done, but I believe Chris' plan represents a unique opportunity for the community," Peter Nordstrom said in a statement.
City Councilmember Bruce Harrell said the presence of Ballmer and the Nordstroms "should address the issue of whether we have local, civically minded investors."
But City Councilmember Tim Burgess, whose finance committee is reviewing the arena proposal, said the announcement "doesn't in anyway reduce our need to do our job and be thorough about it."
Under the proposed agreement, taxes and revenue generated by the arena would be used to pay off the public bonds. The investment group would finance and build the arena and pay for any cost-overruns on the project.
It also would pay for maintenance on the building, create a reserve fund to make up for any revenue shortfalls, and agree to a 30-year nonrelocation clause for a basketball team and a National Hockey League team, which Hansen also wants to secure as part of the deal.
The biggest objection to the proposal so far has been from the Port of Seattle and the maritime industries, which worry about the impact of traffic from a third sports venue in the city's main industrial corridor.
King County Councilmember Larry Phillips said he remains concerned about the impact to Port operations as well as whether the region can support six professional teams and University of Washington sports.
But Phillips said Wednesday that his goal of a deal with no financial risk to the county became more attainable with the involvement of Ballmer and the Nordstroms.
"Guaranteeing the bonds just got a lot easier," Phillips said. "When you have some of the world's richest people here stepping up, they are in a strong position to hold the county harmless.
"The question now is how to re-craft the deal so the public is assured there's no risk."
Seattle City Councilmember Sally Bagshaw said that the loss of the Sonics to Oklahoma is one reason the council will continue to take a close look at Hansen's proposal, even with Ballmer and the Nordstroms' involvement.
"Having local ownership is a good thing because it means they will fight to get a team and keep a team." But she added, "When [NBA Commissioner] David Stern couldn't get us to pay for a new arena, he made an example of us by taking our team. This is our city and our team. We want the arena deal to be on our terms."
Lynn Thompson: 206-464-8305 or firstname.lastname@example.org. On Twitter @lthompsontimes.
Information from Bloomberg News and Seattle Times archives was included in this report.
Seattle Times staff reporter Brier Dudley, assistant political editor Joni Balter and news researchers Miyoko Wolf and Gene Balk contributed to this story.