So apparently a new group affiliated with our pals from "Citizens For More Important Things" is saying that Chris Hansen's MOU, which will eventually turn into a more detailed Umbrella Agreement, with the City and County is illegal because ALLEGEDLY it fails to specify dates in which certain fees will be paid, it fails to require Chris Hansen to pay extra premiums (added return) required by Initiative 91 and the City is supposedly forfeiting property taxes.
So now what?
There's basically 4 options for the City and Hansen to tackle this new found problem.
- Lawyer up and amend the MOU to make it more I-91 friendly.
- Leave the MOU alone and take your chances on its merits in court.
- Amend the terms of I-91 to make the language more understandable and reasonable since it is an initiative that is over 2 years old.
And then there's the 4th and final solution to swatting this gnat away. . .
Exempt the arena deal from the requirements of I-91.
Now, is this a scary proposition for some? Sure it is. Some would argue this decision would lead to the demise of City Council members who support the MOU and the arena build in general while others would even argue that it'd lead to a public vote push like the one we've seen in Sacramento over the past few months.
But I would argue there are actually a few really good common sense reasons to exempt the future arena tenants (Sonics and NHLSeattle) from this confusing law. Namely these reasons are:
1. There's no more legal liability in this document for I-91 if the Umbrella Agreement states that the arena project and its future tenant(s) are EXEMPT from this potentially convoluted law.
Once I-91 is gone, there's no legal ground to challenge the validity of this deal for those reasons; it's that simple. Thus, it would save the City from spending time and money (albeit money that's reimbursed by Hansen) in court.
2. There is a precedent for revoking the I-91 requirement.
As has been covered before in the arena debate, the Seattle Storm when signing their 10-year lease for KeyArena in 2009 were given an I-91 exemption when the City Council voted to issue/approve the lease. Mind you there was already a ready-made building for the Storm to play in and the return required of them through I-91 would've been much smaller than the one the "Sonics Without Subsidies" group suggests is necessary for the proposed new arena in SODO. But nonetheless, the City made this decision with seemingly little public dissent to not hold the Storm to any extra requirements and waive this law in order to help Force 10 Hoops achieve their goal of keeping the team and women's pro basketball in Seattle. And this fact leads me to my next point. . .
3. By removing the requirements for I-91, the political reality surrounding this deal wouldn't change.
And here's why. By voting to approve the MOU, the City Council, County Council and Chris Hansen all agreed this deal would be achieve the objective of building an NBA/NHL arena in Seattle in a financially safe way that'd protect John and Jane Taxpayer from the brunt of the project's risk. Simple as that. Certainly the legality of I-91 was considered when constructing the amended deal last summer, but that still hasn't stopped the deal's staunchest critics from believing the MOU isn't I-91 compliant because the math and language of the deal don't match the terms of the convoluted law. And because of this newest complaint, it's forced arena deal figureheads such as Pete Holmes, Sally Clark, Tim Burgess, mayor-elect Ed Murray and even Dow Constantine to constantly say "NO COMMENT" about what kind of legal standing the I-91 case has.
Any way you want to interpret these complaints from the "Sonics Without Subsidies" group, this complaint has put the City, County and Chris Hansen in an awkward situation as all 4 potential decisions that could be made in response to this anti-arena group's presence would all have drawbacks.
- Revoke the I-91 requirement and anti-arena people spin it as the City admitting guilt and they even potentially get motivated to hold a referendum/initiative drive.
- Amend the language of the 7+ year old I-91 to make the language more understandable and fair for the pro sports teams and the City and then it's possible that you'd face potential political backlash from anti-arena people for being perceived as helping "billionaire owners" and "millionaire athletes" rather than helping the 99%.
- Keep the deal the same and take the risk of going to court where it's possible the wrong judge could look over the details of this deal and rule in favor of the "Sonics Without Subsidies" group.
- Amend the deal to make the I-91 people go away but face the risk of the deal no longer being financially viable to the Hansen group because of all the strings attached to the I-91 deal.
But if we are talking about political reality, you have to remember this about the arena deal:
- Arena advocates apparently made up 25% of Mike McGinn's volunteer base during his election campaign this year and helped him get out of a competitive primary field and to within approximately 4 percentage points of Ed Murray's final vote total after he was losing decisively in polling following the August primary. Remember, at one point it was perceived that enough people wanted an "Anyone But McGinn" candidate after McGinn had gained a reputation as a divisive leader in Seattle for reasons such as vetoing the deep bore tunnel to the point where Murray could win in a landslide. This wasn't the scenario that played out.
- With Ed Murray ending up with approximately 51.5% of the popular vote, it would appear as if he gained absolutely ZERO positive political traction by welcoming endorsements from arena opponents such as Peter Steinbrueck and ILWU Local 19. If nothing else, Ed is now in a position over the next 4 years where he must win over skeptics who believe he's not being truthful about his intentions of supporting the MOU and the proposed SODO arena site in order to NOT potentially face a serious risk of losing his job through a primary or a competitive general election in 2017.
- SEVEN Seattle City Council members, all of whom were voted in by the entire City of Seattle prior to redistricting, voted to approve the MOU last summer and one of the two dissenting arena voters got fired by his constituents partially due to late votes from frustrated Sonics fans.
- Remember when Peter Steinbrueck ran on an anti-arena, anti-density and NIMBY platform in the August primary? That didn't work out so well for him.
- And what about Albert Shen? Remember when The Seattle Times endorsed him for City Council in part because he opposed the idea of building an arena in SODO? That didn't work out so well for him either.
Now, I may be wearing green and gold glasses here. But the political anecdotes that we've seen over the last year and a half or so in Seattle suggest that public sentiment is on the side of building the arena in SODO even though there's a vocal minority opposing it.
And those who are supporting the deal aren't necessarily thinking about the convoluted requirements of I-91. They are thinking mostly about hoops, hockey, concerts, opportunities for small businesses in SODO and city pride. It's really that simple other than the obvious issue of the City making sure their financial house is in order before signing a detailed arena agreement.
And speaking of city pride, this leads me to my next argument for getting rid of I-91. . .
4. The City has gained ZERO positive benefits (intangible or tangible) from this law.
In fact, ever since the controversial initiative was passed in 2006, the following events have happened:
- The Sonics moved to Oklahoma City with no promises of an expansion team as compensation and the NBA couldn't wait to get out of here.
- It helped create a toxic relationship with David Stern and potentially a general mistrust in Seattle's ability to get an arena deal done and "shovel ready" among NBA owners. At the very least, it's hard to say the NBA would embrace an arena deal that technically beats the standards of I-91 because it could encourage other municipalities to pass similar restrictive laws.
- As of January 2014, there's no guarantee that an NBA team will ever come back to Seattle. Again, this could be partially due to the NBA not wanting to reward an arena deal that beats I-91 with a tenant in addition to the idea that Chris Hansen and Steve Ballmer fit the role of "NBA Neighborhood Bogeymen" beautifully.
- Ever since the Sonics left in 2008, there's been only 1 viable bidder that's come to the table in 5 years with an arena plan. And even then, it's never been determined in a court of law if this bid is compliant with I-91.
So with all this mind, did we REALLY gain anything by passing this initiative? And what will happen 40-50 years from now if this law is still in place and the Seahawks and Mariners stadiums become antiquated?
Think about THAT for a second as I go into this 5th and final reason for getting rid of I-91 as it relates to the arena deal.
5. Even though the initiative garnered 74% of the vote in 2006, it's possible a segment of the population voted for this law without really understanding what they were voting for.
For example, did everyone truly understand the consequences of passing this law in 2006 and does anyone today understand this law without having their head spin? I certainly can't if we're talking about an extra $731 million Chris Hansen would need to pay to somehow make this deal I-91 compliant. People, particularly the City Council and Ed Murray, need to understand that there are certain civic decisions people all over the political spectrum have made over the course of history where if they could have a do-over, the results would be different.
In this case, it's possible a judge in the court of law could perceive I-91 as a law where those who ask for public subsidies in the broadest possible sense of the word must pay a financial penalty.
And if this ended up being the case in court, how would it ever be viable to build an arena or stadium in Seattle and work with a private investment group who are willing to take on nearly $1 billion of financial risk as is when you combine the costs of building the arena with buying a team? And for that matter, how can it ever be possible to have a "fair return" on a deal when there would be no arena deal to be had?
Sure, it'd be nice if Chris Hansen paid for the whole arena himself.
That'd be the most ideal scenario.
But even then, he'd still likely need to comply with I-91 requirements because it's possible (hasn't been determined YET in a court of law) that the City providing a lease to Chris Hansen's group would be considered a "service" under the terms of the law (which is why the Storm needed to be freed from I-91's clutches). And at some point, the financial risk to buy an arena and build a team in an all-private build scenario in Seattle would become too much for Chris Hansen and his group. Because while his group may be financially loaded, everybody has their limits. It's just common sense.
That's why I hope the City Council uses common sense and does the right thing in this case; especially since this was the first new arena construction plan to be passed through Seattle City Council while making an honest attempt to comply with the stringent and confusing terms of I-91 (and thus, making Sonics Arena a guinea pig of sorts for I-91).
In my opinion, the City can best help accelerate the construction of a world class arena in SODO and the return of hoops and hockey to Seattle by removing the potentially cumbersome requirements of I-91 from this arena deal and letting the MOU (and future Umbrella Agreement) stand on its own merits.