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Originally published September 11, 2012 at 10:59 AM | Page modified September 12, 2012 at 7:47 PM

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'We got it all' in arena deal, council member says

The announcement that the Seattle City Council had reached a revised agreement with investor Chris Hansen to build a $490 million arena drew widespread support from city and county business and political leaders Tuesday, and from sports fans who celebrated the possible return of the Seattle SuperSonics.

Seattle Times staff reporter

Key changes to the deal

Adds $40 million to a transportation fund to make improvements in Sodo.

Adds $7 million to improve KeyArena and plan for its future.

Can require Chris Hansen to buy the new arena and land from the city for $200 million after it's paid off.

Strengthens financial protections for taxpayers and requires study of alternative sites.

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The announcement that the Seattle City Council had reached a revised agreement with investor Chris Hansen to build a $490 million arena drew widespread support from city and county business and political leaders Tuesday, and from sports fans who celebrated the possible return of the Seattle SuperSonics.

Indeed, if the agreement is approved by the city and county councils, Hansen can start shopping for an NBA team.

Even Port of Seattle officials, who had warned that the Sodo location could put at risk $3 billion in annual revenues and 33,000 maritime jobs, sounded more optimistic.

"I think it addresses a number of the Port's concerns. I personally am very heartened by it," said Commissioner John Creighton.

Commissioner Gael Tarleton also said she was encouraged by the terms of the new agreement.

"I feel that [the City Council] listened. We asked them to do an environmental-impact study, and they are. We asked them to look at alternative sites, and they are. I think that builds confidence and trust."

The revised agreement directs $40 million into a transportation fund repaid by Hansen that would prioritize freight mobility and other infrastructure improvements identified by Sodo maritime business and industry leaders, including the Port.

In announcing its deal Tuesday, City Council members suggested that the Port would contribute to the fund and that the money could be leveraged to obtain additional state and federal funding.

Dave Gering, executive director of the Manufacturing Industrial Council, said many of his members are still skeptical that the city can make enough improvements to matter.

"What does $40 million buy? What if we can't make it work?" Gering asked.

The revised agreement did satisfy state Rep. Judy Clibborn, chairwoman of the House Transportation Committee, who had previously joined other state transportation leaders in opposing the original deal negotiated by Mayor Mike McGinn and King County Executive Dow Constantine, and announced to the public in February.

Clibborn, D-Mercer Island, called the Port's business critical to the state economy and said even more important to her than the transportation fund was another provision of the revised deal — creation of a Port Overlay District aimed at identifying and protecting manufacturing and industrial lands from gentrification.

"This long-range look is the deal changer for me," Clibborn said.

The revised agreement with Hansen includes $225 million in public bonds that would be repaid with taxes and rents generated by arena activity.

The revised deal also directs $7 million to improvements at KeyArena and planning for the future of Seattle Center.

"We strongly believed that public money should be used for public purposes," said Councilmember Tim Burgess, who with Council President Sally Clark and Councilmember Mike O'Brien led the council negotiations with Hansen.

Burgess said after the news conference that he was skeptical of the deal when it was presented to the City Council in May, and grew more skeptical as he delved into it.

But eventually, he said, he realized "there's hidden opportunity here. Chris Hansen becomes the catalyst to do other things," like make transportation improvements in Sodo.

He said he's convinced there will be an arena built somewhere in the region soon, and it's better to get a direct benefit and be able to have some control over how it affects the Sodo neighborhood and KeyArena.

Asked whether there was anything the city wanted, but didn't get from Hansen, Burgess said, "Nothing. We got it all."

The revised agreement strengthens financial protections for the city and county by requiring Hansen to double the security reserve if arena revenue fails to meet expectations.

And it now includes a personal guarantee by Hansen for five years of annual debt payments.

Hansen also agreed to annual audits to show his personal net worth is at least $300 million, and the city can conduct independent assessments of the viability of Hansen's business plan and the wherewithal of the other private investors, just like private lenders would require.

And if that weren't enough to make the 44-year-old Seattle native turned San Francisco hedge-fund manager a hometown hero, he also offered to buy for all the Sonics fans who supported his arena proposal a beer at F.X. McRory's from 5 to 7 p.m. this Thursday.

"Your voices were heard and your hearts spoke volumes. I really hope you all just appreciate how much it meant and what a difference each and every one of you made," Hansen said in a statement on his website.

Jason Reid, director of the documentary "Sonicsgate," which details the loss of the Sonics in 2008 to Oklahoma City, said fans are relieved after all the debate over Hansen's proposal.

"So many fans are fired up. It's a very festive mood, especially after all we've been through the last six years," said Reid.

The council's Government Performance and Finance Committee will vote on the revised memorandum of understanding Thursday.

The agreement then goes to the full council for ratification, possibly on Sept. 24.

The Metropolitan King County Council, which approved a slightly amended agreement in July, also must ratify the revised deal.

If it is approved by both the city and county councils, Hansen will have the official backing he needs to search for an NBA team. A team must be acquired before the city and county issue construction bonds and before ground is broken for a new arena.

The new deal also specifies that a state environmental review that examines alternate locations, including Seattle Center, be completed before the final legal documents with Hansen are signed.

The Seattle Metro Chamber of Commerce praised the revised agreement for adding financial protections to protect the public interest. Chamber President Maud Daudon, who served as an adviser to the city on the Arena Review Panel, said, "Thriving regions face complex issues and the best of them figure it out."

Clark, the City Council president, said the deal came together over the past three days after three months of negotiations that she described as "productive, sometimes tense" and with Hansen always focused on problem solving.

She said the layers of financial protections emerged from council members contemplating "various meltdown scenarios" that could beset the sports teams and ownership groups in the future.

McGinn has been criticized for conducting negotiations in secret with Hansen and for not including key stakeholders such as the Port and the Manufacturing Industrial Council.

But the City Council members on Tuesday praised McGinn and Constantine for recognizing the opportunity for a new arena and for getting the ball rolling.

Burgess, continuing the basketball metaphor, said, "they tossed up the alley-oop and we slammed it home."

Staff reporter Drew DeSilver contributed to the story.

Lynn Thompson: 206-464-8305 or lthompson@seattletimes.com.

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