Dec 22 Messages from Chris
As we close out 2014, I wanted to take a moment to thank all the amazing fans who have stood by us as we work to bring our Sonics back to the Emerald City. I also want you all to know that we remain just as committed to bringing NBA basketball back to Seattle as we were the day we first announced Sonics Arena.
From my family to yours, have a wonderful holiday season and a healthy New Year. Bring on 2015!
— Chris Hansen
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First I would like to congratulate Steve Ballmer on his apparent successful bid for the Los Angeles Clippers. Steve's passion for basketball and commitment to the NBA will make him a great owner and strong asset for the league.
I would also like to assure Seattle fans that my remaining partners and I remain committed to bringing the NBA back to Seattle. The environmental review process for the Seattle Arena is nearing completion and we will soon be in a strong position to attract a franchise back to the Emerald City.
Feb 06 Messages from Chris
I was at the game in NYC with my wife, kids and close friends and needless to say it was a lifetime experience for me just as it was for so many of you. As a diehard Seattle sports fan living in California for the better part of the last 25 years, I have had to sit quietly as friends have celebrated the numerous titles from the Lakers, Dodgers, Niners, and Giants. I have been in SF and witnessed the unbridled joy of three championship parades. And I have stood aside with envy as bars of loyal fans raised their right index fingers in the air and sang "We are the Champions."
After watching a game that can only be described as a blur of joyous domination, when I saw Paul Allen and Pete Carroll hoist the Lombardi Trophy in MetLife amidst a snowstorm of blue and green confetti, I hugged my kids and just started to tear up. Like all Seattle sports fans, I have waited so long for this moment, and the gravity of it was just overwhelming. I honestly kept thinking to myself, "Is this really happening?"
After celebrating with my kids on the bus ride back to Manhattan, I headed out to a 12th man pub in NYC called Carlow East to celebrate with friends. We sang and danced and hugged and cried. And for the first time in 35 years, I held my right index finger high in the air and belted out "We are the Champions" in a packed bar full of Seattleites and just thought to myself… "We did it. We finally did it."
So I would just like to commend Paul Allen, Pete Carroll, the Seahawks organization, and most of all the players for delivering the title that our city has so desperately craved and deserved for the last 35 years. Few have the opportunity in life to do something that means so much to so many. And I know I speak for all Sonics fans when I simply say thank you.
And for anyone who has any lingering doubts as to whether Seattle is a "sports city" capable of supporting an NBA and NHL franchise, there are about 700,000 of us that have a few pictures from yesterday we would be happy to share with you.
— Chris Hansen
Nov 25 Messages from Chris
It’s been a while since I have posted anything here but hope you don’t take that as a lessening of my commitment or an indication that work on the Sonics Arena has slowed. My team and I have been working through the city’s environmental and design review processes and without getting into a lot of detail I can say that I am pleased with the progress we have made.
While we are focused on this important work our opponents continue to raise the same arguments and issues we have heard so many times over the past year. I guess they think that if you just keep saying the same thing over and over again it somehow becomes true.
For some reason, this seems to hold especially true for the editorial writers at the Seattle Times. With a history of completely fair and unbiased reporting on the Arena issue, is it really a surprise that a report that was not only paid for by the Arena opposition but was also rife with errors in legal interpretation, math, and basic reasoning qualifies as the basis for their latest sensationalistic criticism?
The Times Editorial Board apparently didn’t feel the need to consider the fact that our arena proposal went through a lengthy public process in which its legal and economic merits were completely and thoroughly vetted by both the City and County Councils. No need to take into account the fact that both Councils appointed independent committees of experts who analyzed and concluded that this was a good deal for the City. No need to weigh the fact that both Councils employed inside and outside legal counsel to advise them on the legal aspects of the deal (including I-91). And certainly no need to consider the parade of local and national experts who called this amongst the best arena deal any city has ever received.
Based solely on the apparent legal expertise of the Times’ Editorial Board and a biased report paid for by the opposition, the MOU is apparently illegal and our group is apparently receiving over $700 million in illegal subsidies. Great work. I guess everyone else involved just missed this.
While we have covered the MOU’s compliance with I-91 in numerous past posts and writings, in the interest of sanity I thought it would be helpful to point out a couple of the more significant miscues in the so-called report by Private Valuations.
- Above all else, alarm bells should clearly sound on the credibility of a report that is paid for by the opposition and which claims that the subsidy we are receiving ($773 million) is nearly four times the amount the City and County have agreed to invest in the project — especially with all the public sector vetting and guarantees we have put in place. As the saying goes, if it walks like a duck...
- Having said this, the first major mistake the report makes is NOT basing the I-91 calculations on the “net cash-on-cash return” of the project. This is the exact language from the I-91 legislation — and language the writers of the report “conveniently” fail to consider or address.
- Under the definition of “cash-on-cash” returns (from the finance textbook of your choice!), the return is calculated by dividing the net cash returns (after deducting financing costs) from the project by the “cash” equity invested (EXCLUDING debt borrowed). Thus the City is either financing their entire investment and investing ZERO cash in the project (which would make the calculation infinite) or the City is considering the entire investment as “Cash Equity” under which the financing costs must be excluded in calculating the cash return BY DEFINITION. Under this latter interpretation the City would generate a return that exceeds Treasuries by a very wide margin. It is a blatant error to count the $200M investment as equity and then turn around and treat the funds as if they were borrowed and count interest expense as a reduction in the cash return to the City. It is simple double counting. This is an obvious error that Private Valuations should publicly acknowledge as it renders the bulk of their I-91 subsidy conclusions in the report invalid.
- In much the same manner, the second significant error the authors make is the absolutely ridiculous argument that we are not paying taxes since the incremental taxes generated by the arena go to repay its investment in the project but that same tax money paid by us to the city also doesn’t count toward bond repayments as it is not secured. Huh? So by their math we don’t get credit for either paying our taxes or the bond repayment — and both are cited as a subsidy. Clearly this makes no sense. I guess they are assuming the money we pay the city just vanishes into thin air once it is collected by the tax authorities. Rest assured Seattle, we will be paying taxes to the City and County as defined by the MOU. And we have secured those tax payments with collateral and guarantees that would result in any major lender in the world considering them “secured.”
- The final major miscue in the report is a claim that the City and County will be denied its share of property taxes by purchasing the land and arena as part of this transaction. While I-91 in no way prohibits the City from purchasing land, the analysis is also 100% factually incorrect. The City and County will see no reduction in their gross property tax receipts as a result of purchasing the property and leasing it back to us.
So when we see our opponents and the Seattle Times Editorial Board raising the same issues time and again I would just encourage you all to keep in mind that the arena MOU was approved by the Seattle City Council and King County Council after a thorough vetting process, numerous public hearings and close scrutiny by two independent review panels.
In closing I want to wish you and yours a very Happy Thanksgiving Holiday. This is a time to put aside our disagreements and focus on family, friends (and maybe a little football). Go Seahawks!
Click on an image to embiggen.
For more on the latest designs, check out this story at the Seattle PI.
In conjunction with the proposed settlement with the FPPC, I wanted to take the opportunity to give a more detailed explanation of the circumstances surrounding my contribution to the Sacramento Arena Opposition.
• Prior to the May 15th NBA Board of Governors vote concerning the relocation of the Sacramento Kings, I engaged Loeb & Loeb to conduct background research concerning the viability of a new arena in Sacramento. This research involved an assessment of legal, economic, environmental, and political issues surrounding past and present efforts to build an arena in Sacramento. During this process (and again prior to May 15th), after being approached by Loeb on behalf of opposition members, I agreed that a portion of the funds paid to Loeb could, in the future, be used for political purposes if a broad-based political committee, consisting of other donors and independent of STOP, were established to oppose the effort to build an arena in Sacramento. It was never my desire or intent to either directly fund signature gathering or to be the primary financial sponsor of the opposition’s efforts.
• On June 21, 2013, I paid a legal bill from Loeb & Loeb that consisted of all legal fees incurred from March 2013 through May 2013 for the aforementioned background research and my prior commitment of up to $100,000 that could be directed toward the Sacramento Arena opposition assuming that certain conditions were met (a broad based political committee was set up with substantial other donors). On the same day (June 21, 2013), and without my knowledge or consent, Loeb & Loeb advanced $80,000 to GoCo consulting to collect signatures to qualify an initiative that would require a public vote on a new arena. At this time, a broad-based political committee had not yet been established, and I neither directed nor authorized Loeb & Loeb to make this expenditure on my behalf. During this entire process, I never spoke with, emailed, met, or had any correspondence with GoCo, Brandon Powers, STOP or Taxpayers for Safer Neighborhoods.
• Additionally, at the time they made the payment to GoCo, Loeb & Loeb did not inform me of either the payment to GoCo or of the need to file a major donor report. The first time I learned of the payment to GoCo was on August 10, 2013. It was only after a complaint was filed with the FPPC demanding an investigation into the source of the $80,000 payment that Loeb & Loeb informed me that some of my funds had been advanced to GoCo. Again, this was the first time I learned my funds had been directed toward signature gathering.
• After discussing the matter with Loeb over the weekend, I retained separate counsel on August 13. After having just three days to assess the situation with my new counsel, I filed a major donor report on August 16th. It is also important to note, that I was never informed of the FPPC’s intent to file a lawsuit on August 15th and had already taken steps to file my major donor report before the suit was filed.
These facts were confirmed by Loeb & Loeb, which is noted in the settlement stipulation.
While I believe this explanation should go a long ways in clearing up many of the misconceptions surrounding my involvement with Sacramento Arena opposition, it should not be taken as an attempt deflect criticism from the mistakes I clearly made. I take a lot of pride trying to do things the right way in my life, and I simply should not have allowed myself to get caught up in the competitive dynamics of this situation and never should have agreed to commit any funds to the Sacramento Arena opposition — under any circumstances. I also should have taken steps to rescind my financial commitment following the outcome of the May 15 Board of Governors vote. Finally, although I’ve never made any political donations or contributions in my life prior to this (including contributions to PAC’s), with the benefit of hindsight I also should not have relied solely on Loeb’s expertise and discretion in handling this matter and clearly should have asked more questions earlier in the process.
But most importantly, I would again just like to reiterate my commitment to stay out of Sacramento’s Arena efforts. In this regard, I would also like to highlight that I will take steps to prevent any signatures collected by GoCo from being submitted to the opposition. As it was never my intent to directly fund signature gathering efforts, I completely agree with the numerous Kings fans who have taken the time to write me and suggest this course of action. It is also important to note that this decision is not part of my proposed settlement with the FPPC, and is one I am making completely voluntarily. It’s clearly the right thing to do given the circumstances and I wish the City of Sacramento and the Kings the best in their efforts going forward.
— Chris Hansen
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