Hansen Re-submits Street Vacation Petition for SoDo Arena

 Property  Comments Off on Hansen Re-submits Street Vacation Petition for SoDo Arena
Feb 232017
 

Following a lot of media blitz about local hero Russell Wilson joining the ArenaCo team and public pitches for an “all private” financing model that still includes significant tax breaks, Hansen announced the intention to re-submit the street vacation request for Occidental Ave South.  That petition (pdf) is now on-line contained in Clerk File 314369 .

 

The petition specifies an additional $1.3 million tentatively allocated to SDOT freight mobility projects including various planning projects and some smart signs related to railroad-based delays.

A Contribution of an additional $1.3 million to SDOT to implement the following 2016 Freight Master Plan projects (or other freight-related projects, at SDOT’s discretion):
  • Spokane Street Freight-Only Lanes Pilot Project, Phase I (FMP Project #24)
  • Railroad Crossing Delay Intelligent Transportation System (FMP Project #28)
  • 1st Avenue S./S. Atlantic St. Freight Improvements (FMP Project #37)

What other changes are included/excluded will require a bit more digging as this is a street vacation petition and not a full outline of the new, privately-built arena proposal.  The MOU being “thrown out” in bulk but aspects being retained leaves some gaps related to 1) the KeyArena use agreement that was in the MOU and included renovation funds based on early tax collections is now gone, 2) the MOU’s provisions for team non-relocate agreements is also gone (while owning the team and the arena might be good private motivation, team values could eventually rise enough to outweigh taking a loss on their old arena’s value with no primary tenant), and 3) various provisions related to Hansen/the investor’s financial security/maintaining a $300 million net worth are gone (something Geoff Baker’s recent Seattle Times piece outlining Valiant Capital Partners’ recent losses and opening up for new investors highlights).

The Seattle City Council has no planned meetings related to the street vacation petition.  Mayor Ed Murray has already said that the focus is on evaluating the KeyArena RFP proposals due in April 2017 before spending time considering SoDo again.

KeyArena Remodel – Geoff Baker and Sports Radio Roundup

 Lawsuit, MOU, PR Campaign  Comments Off on KeyArena Remodel – Geoff Baker and Sports Radio Roundup
Feb 252016
 

Geoff Baker at the Seattle Times has launched into a theory that the city council buried the AECOM report about potential use of the Seattle Center Coliseum (formerly sponsored to be named the KeyArena).  The city council drafted a memo that, as Field of Schemes puts it, says “nyah” but the report does have footers and headings with April, May, and June dates in just the first few pages, despite titling it for a June release.  The April and May footers agree well with Baker’s published timeline and suggest some sort of lackadaisical editing as delays occurred.  Godden is reported to have said the report was posted to the council website, but I was looking and the council’s nice collection of arena documents had gone 404 by May, so we’re left to presume Jean is referring to official city clerk files, somewhere, while not discussing it publicly.

 

Local sports radio personalities Danny, Dave and Moore discuss this between about 20 – 34 minutes in the following show.  The hosts appear to have not actually read the AECOM report, instead looking at pictures, as evidenced by commenting about “simply twisting the ice” as the report clearly states that the rebuild completed in the 90s made the lower bowl and seats a structure separate from the roof floating structure, allowing for a relatively cheap rebuild of the new configuration.  It would require excavation and new seating, etc but apparently there’s a lot of unused space below that roofline currently.

 

Ian and Puck also discussed the same things in their 2-23 hour 1 show at 11:30ish here, with added rants about “bikes” and “bertha” thrown in.  Softy also interviewed Chris Daniels in his 2-23 hour 3 show here who does agree that the delays are oddly timed (Chris starts speaking at about 18:30 into the show).  Daniels suggests that a soft majority of the council is ready to vote in favor of the vacation to clear the plate,being  somewhat emboldened by recent media coverage.

The sports radio folks are pushing hate on the Seattle Times and a public comment “rally” at the street vacation hearing, while calling that vacation the “last major step” which is, of course, factually wrong as made very clear by the county council stating they had to vote before issuing any bonds (and the city would have to do so as well).  Oh well, February is kind of boring for sports around here.

 

Sports radio is pushing the public comment period on March 15th at 5:30 as the next “battle” and “showdown” and is not really discussing all the nuances of the vacation (what public benefits are required, etc), so expect lots of “rah”.  You can read the source vacation documents posted here. March – April 2016 is several months behind the timeline outlined a year ago for when this would occur.

SoDo Arena Final Environmental Impact Study Released – Murray Reminds Everyone NHL First Requires Money

 Finance, Security  Comments Off on SoDo Arena Final Environmental Impact Study Released – Murray Reminds Everyone NHL First Requires Money
May 082015
 

People have been working themselves up into a tizzy about alternate arena proposals related to the NHL in Tukwilla and Bellevue.  Are they real, privately funded plans or just distractions prior to the SoDo arena FEIS being released ?  Nobody really knows as NHL team owners tend to do very little without public subsidy.

The FEIS is a huge document I’ll browse through later.  It’s being said that the document did not uncover huge roadblocks but did take a rather low-end view on traffic impacts and estimated a negative impact to the Port of Seattle of $-115,584 a year or so.

I also have noticed that the whole City of Seattle collection of arena documents for the city has gone dark with a 404 error.  (I think I found the re-designed collection for the County)  Hopefully, that’s a temporary issue.

NHL-First Means Sweeten the Private Money Pot

Ed Murray’s comments to the Seattle Times suggest the NHL first proposal will have to put in even more private money towards an arena than the NBA-only one.  I guess Ed realizes that NHL-associated taxes and benefits are likely to be far fewer than that of a NBA team.

While hailing Thursday’s release of a final Environmental Impact Statement (EIS) as “another major milestone” reached, Murray said he’s prepared to look elsewhere if entrepreneur Chris Hansen and his hockey partner can’t produce an “NHL first” funding proposal by fall. Murray told The Seattle Times he needs a “much, much better” public funding package to present to the Seattle City Council than the current Memorandum of Understanding (MOU) between Hansen, the city and King County.

That deal calls for up to $200 million in bonds toward a $490 million arena if an NBA team is acquired. But Murray believes there’s no chance of that now, meaning a new proposal with more private money for a riskier “NHL-first” scenario is needed.

“Folks have got to come up with a plan that’s viable for us to finalize this process,’’ said Murray, who needs less public funding to help him sell the council on a request to close a street that’s part of the 627-page EIS. “The timeline you see for decisions on the arena are the timelines for when we either go forward, or we pull the plug.’’

As a refresher of how much public financing (aka, the money the public would be getting to support public functions if this were an entirely private arena) is involved, from way back in September 13, 2012’s meeting we had this chart.  Does Hansen and his NHL partner have a way to sink $400+ million into just the arena and still have things pencil out ?

The range of public money that would be going to the arena project under NBA-only and NBA+NHL scenarios.

The range of public money that would be going to the arena project under NBA-only and NBA+NHL scenarios.

Department of Planning and Development Halts SoDo Review, ~$50k Due / Hansen’s Earnings Take a Hit in Q2 2013

 Finance, Property  Comments Off on Department of Planning and Development Halts SoDo Review, ~$50k Due / Hansen’s Earnings Take a Hit in Q2 2013
Aug 092013
 

Design Review Process Halted by Hansen Not Paying Bills

Today the Seattle Times announced that the Seattle DPD in charge of reviewing Hansen’s arena designs has halted the review process over months of unpaid bills.  By the looks of the unpaid “additional hours” entries, two months worth of bills since 4/30 have gone unpaid by McCullough or Hansen.  Hansen’s spokesman (McCullough?/Fatland?) is reported to have claimed “an administrative oversight occurred because of summer travel and that the bill is being taken care of.”   I know there’s administrative errors, but two months in a row (and probably some courtesy reminders) seems to be a stretch for an oversight by a professional like McCullough.  If the bill is paid promptly, I would expect the DPD site to reflect that fairly quickly.  If not, this could be Hansen trying to quietly slow down the arena process without announcing it outright and losing the rabid NBA fanbase he has frothed up this past year.

EDIT (morning of 8/9):  The site still says on hold, but the receipts tab reflects that all debts have been repaid as of today, 8/9/2013.  I hope somebody set a monthly reminder in their “SoDo arena project” calendar as it really doesn’t look good to not pay your small bills when asking for $80 million+ in public financing/projected tax revenues.

Arena On Hold Due to Hansen

Arena On Hold Due to Hansen (not lawsuits, etc)

 

Hansen’s Hedge Fund Way, Way Down

Seattle Times commenter Copernicus posted a story I’d missed.  Hansen’s hedge fund posted a losing first quarter 2013 back in April that we talked about.  In early July it was revealed that Hansen’s hedge fund was down in the second quarter 2013 as well.   I think the article’s first few sentences paint a grim picture of how investors would probably be fleeing this fund to others after being 30% down relative to a simple market index.  Hansen’s personal wealth does not appear to be sufficient to put him on any list of billionaires and hedge funds are typically setup to charge a small percentage of the amount invested and a larger percentage of any fund gains (which have been absent for many months).  How grim this looks for Hansen being the head of the “potential Seattle NBA team ownership group” is unknown.  Just how far along did the Seattle City Council get in that third party review of Hansen’s business model and financial situation ?

You can say that Christopher Hansen of Valiant Capital Management is one of the most consistent hedge fund managers this year. Unfortunately for him, his performance has been consistently bad.

The San Francisco–based hedge fund firm has the dubious distinction of being perhaps the worst-performing long-short hedge fund in 2013. The Tiger Management–affiliated Hansen, who unsuccessfully tried to buy the Sacramento Kings basketball team earlier this year, lost another 1.87 percent in June. His liquid fund lost 2.10 percent while his side pockets lost 0.65 percent, according to an investor.

As a result, Hansen’s two hedge funds, Valiant Capital Partners and Valiant Capital Partners Offshore, are now down about 17 percent through June. Yikes! This means Hansen is lagging the S&P 500 by 30 percentage points this year alone. Now, that is what you call a lack of correlation.

It is not clear at the moment what accounts for Valiant’s lousy second quarter, the firm’s worst ever. But it is probably safe to say that a fair amount of the firm’s struggles are related to Hansen’s non-U.S. portfolio and perhaps his short book. (The firm would not comment.)

May 102013
 

Today Hansen took to his SonicsArena.com site to announce he’d embiggened his embiggened offer all the way to $625 M total team price.  He’d be buying 65% of that for $406.25 M.

Maybe he didn’t hear what Mickey Arison said, this isn’t about Seattle, it’s about Sacramento’s efforts for retaining the team in their market.  Trust a hedge fund manager to make it all about waiving money around.

KeyArena Still Could Be Signed Away to Hansen ?

 Finance, MOU  Comments Off on KeyArena Still Could Be Signed Away to Hansen ?
Apr 302013
 

I could have sworn that McGinn told the Seattle Center to prepare documents related to financial stability and studies of how to use the area.  There were going to be studies before grandstanding moves like this were going to happen.

Chris Hansen and the Seattle City Council appear to be pushing forward on the KeyArena Use Agreement.  The hearing is scheduled for 9:30 AM on Wednesday morning.  This would give Hansen the ability to operate and profit from the KeyArena in exchange for a $1.5 mil use fee, any NHL team would pay a 0.75 mil use fee, and any tickets for events that weren’t sports related (non NBA, WNBA, NHL, or city events) would get a ticket surcharge of $1 or $2.

This would be a joint meeting of the Gov’t Performance and Finance Committee as well as the Center Committee.  Hopefully someone with brains (Licata/Godden/Conlin, I’m looking at you) tables this thing until Hansen has NBA approval, because there’s little point in giving the operation over to him when we’ve already got a guaranteed payment and profit sharing from AEG for KeyArena use.

The use agreement summary is here and the full text is here.

Members:
Tim Burgess, Co-Chair
Jean Godden, Co-Chair
Nick Licata, Member
Sally J. Clark, Member
Richard Conlin, Member
Sally Bagshaw, Member

As a bonus, staffers Sara Belz, Hall Walker, Nathan Torgelson, and Robert Nellems (of the Seattle Center) will be there.  Ben Noble, and Dan Eder will also be there.  I’m still waiting for Noble and Eder to revise their “this doesn’t comply with I-91” presentation to show that the MOU somehow does comply, but not holding my breath.

Later in that meeting, there’s a budget-related issue with approving carry-forwards that has a SoDo arena carry forward of $400,000 cited as “This carry forward covers costs related to the SoDO Arena proposal. These funds were appropriated in the 2012 3rd Quarter Supplemental (Ordinance 124054) and were not fully expended by the end of 2012.”  Sally and Richard were asking for a summary of the “burn rate” on this arena proposal back in February’s arena update…  I’m really curious if they got those documents before they approve what may well end up being more arena expenditures.

I’ll be watching to find out answers to such interesting questions as:

if we don’t have a finalized transaction document for the rest of Hansen’s MOU, doesn’t this KeyArenaUse agreement have to comply with I-91 on its own ?  I wonder if we’ll finally find out what the fair market rent value is for an NBA arena.  Or how much of Hansen’s “use fees” would come from the KeyArenaFund that is earmarked to come from KeyArena taxes.

UPDATE 5/5/2013

Wow, most of the questions I’d asked were responded to during the discussion.

 

Valiant Capital Stumbles For 2nd Quarter In A Row, Down 14% To S&P500

 Finance, Other Arenas  Comments Off on Valiant Capital Stumbles For 2nd Quarter In A Row, Down 14% To S&P500
Apr 292013
 

Yes, the BoG subcommittee is still expected to be in conference call.  We’ll all find out who leaks first and I’ll just report what I see.  The official vote by the whole B0G, if there is one, will be at least a week or two from now.

Valiant Capital Management Q1 2013 – Down More As Market Gains

In the meantime, we can imagine the fun of Valiant Capital Investors seeing a 2nd quarter in a row of losing money as the overall market gains. Valiant Capital was managing about $3 billion, then $2.8 billion at the end of 2012, and now just $2.44 billion.

Christopher Hansen’s Valiant Capital Management, which we earlier reported lost 10 percent on a gross basis and 8.70 percent net in the first quarter, lost 3.52 percent alone in its long portfolio in the first quarter, a period when the S&P 500 rose by 10.6 percent, according to Valiant’s March performance report, obtained by Institutional Investor’s Alpha. This means Valiant’s longs lagged the broad market by more than 14 percentage points.

In its performance report, the firm warns that it is “inappropriate” to compare its results to the S&P 500, MSCI World Index or “any other market index,” insisting that it is not aware of any index that would be directly comparable. However, it is safe to assume that even most custom-constructed stock indexes posted gains in the first quarter, and double-digit returns at that.

Hansen’s horrible first-quarter performance comes on the heels of a 7.44 percent net loss in the fourth quarter, putting the firm down more than 16 percent in the past six months, having lost money five of the most recent six quarters. Neither Hansen nor a spokesperson from the National Basketball Association returned calls seeking comment.

The performance report also provides insight into the firm’s illiquid side pocket portfolio. It shows Valiant’s biggest loss coming from Spandana Sphoorty Financial, an India-based microfinance institution. An initial investment of more than $14.8 million is now worth just $9,710.

Now, the question is whether the Sacramento Kings will indeed become a personal illiquid investment for Hansen, or whether his fund’s woes will make it harder for him to follow through with his deal.

Apr 132013
 

The end of this week was a whirlwind of Kings-related news and Hansen’s embiggening his offer by about $16M.

Sacramento’s “Here We Stay” Campaign

Sacramento gained a whale and even started to turn investors away.  Midweek the news emerged of the Maloofs demanding a solid offer from Sacramento’s whales to keep in their back pocket, just in case their agreement with Hansen was rejected.  Skepticism was high on anything going through the Maloofs after they already had what was supposed to be a binding offer with Hansen already submitted to the NBA for approval.  On Friday the Maloofs’ stance on a self-created 5PM deadline softened and by Friday afternoon (after some mid-day rumors) we learned the Maloofs and Hansen had “upsized” the agreement to a $550 M total evaluation (Hansen buying 65% would mean $16.25 M).

Seattle I-91 Lawsuit Dismissed at Preliminary Hearing

The lawsuit concerning I-91 (King Co Superior Court  Case Number: 13-2-01901-9) had a hearing to respond to the City Attorney’s petition to dismiss the case Friday morning at 10 AM.  It lasted about an hour and had city officials saying “we have no firm arena deal” at the same time they’re telling the NBA they do.  Ultimately, the judge dismissed the filed lawsuit but there’s widespread misunderstanding that she gave a ruling.  Even our elected leaders (not Daniels) seem to think dismissing a case as being “not ripe” means there’s a ruling.  Of course, they’re doing this so they can skirt doing any sort of detailed public analysis on why this deal passes I-91, because the council budget people didn’t see it.

I guess we’ll just have to wait for this to “ripen” while fools like Goldy, Dominic Holden, and McGinn keep cheering as hypocrite I-91 “yes” voters.  Thanks for trying Mark Baerwaldt, but there’s still plenty of time for any Seattle resident to challenge this thing.  The judge just thinks a binding MOU that is the determinant of the final terms in the transaction docuemnts isn’t “binding” enough.

Video Archive – City Inside/Out

Aside from the McGinn video where he says he voted for I-91 (above), I was watching some Seattle Channel videos this weekend and came across some March comments on the SoDo arena I missed.  I did find it amusing that Tom Rasmussen completely avoided taking a side on the arena… my god I miss CR Douglass on that show.  The Seattle City Council voted 6-2 with Rasmussen traveling and not voting (Conlin and Licata as the “No” votes).  He’s in charge of the Transportation Committee that will handle the Occidental Street vacation for the SoDo arena (once that site is selected and Hansen files to use it…  details are fuzzy on if he can file with the MUP or if the EIS has to help with site selection/mitigation first).