The big risk in a new sports arena

I write this as I sit in the ground floor coffee shop of Starbucks world headquarters on First Avenue South. As I look east across the parking lot and street to the industrial area that would be adjacent to the proposed new PRIVATELY FUNDED ARENA (caps and face added by me as the initial name for the place), I see the project’s best feature:

The arena would be practically in the grill of Howard Schultz, the Starbucks CEO who sold out the Sonics. Thus, the all-time, punk-ass facial ever delivered in the NBA.

Delightfully ironic as it is, that is also part of the problem. 

Giddy as sports fans and talk shows hosts have been over this proposed project, which has been sufficiently viable to have an investor put down $22 million to buy some land and and Mayor Mike McGinn to pay a consultant to vet it, there will be at least three neighborhood entities besides Schultz and his many innocent workers who won’t like it:

• Seahawks/Sounders
• Mariners
• The Port of Seattle.

None of them will say so, of course, ever conscious of the consequences of adding poop to the sudden party that is getting McGinn more attention than any of his screw-ups. But anyone who has much used First Avenue South is having a hard time imagining anything but hell attending the comings and goings of 22,000 fans to the truck (dead) stop that it often becomes in the late afternoon rush.

Besides the epic, five-sport congestion at the location — which will get worse in a few years as thousands of commuters use surface streets in an attempt to avoid tolls on the tunnel that replaces the viaduct — even I, as a sports guy, am having a couple of problems with it, one near term and one long term.

At the moment, Seattle is being played for a stooge in the Machiavellian manipulations of NBA Commissioner David Stern. Devious Dave suddenly likes Seattle, for the same reason that the NFL likes Los Angeles — it’s an empty, potentially lucrative market that can be used as leverage against cities fighting the extortions of the pro sports leagues.

Stern gave an interview to the Salt Lake Tribune Monday that the Seattle Times foolishly bannered Tuesday in which he admits talking to Chris Hansen, the hedge fund guy originally from Seattle who appears to be the leader of the group trying to build an arena without tax money. Stern’s unstated point was to let politicians in Sacramento, New Orleans, Charlotte, and elsewhere know that there is a bigger market getting itself ready to take your team if you don’t fall in line.

Stern committed to nothing but was at his his cloyingly, passive-aggressive best in threatening without threatening. Just as did the plain girl told by the stud jock she was the prettiest girl at the prom, Seattle lapped up the insincerity as Stern played it for personal laughs.

It is hardly the first time, and won’t be last time, Seattle will prove gullible in the saga. The more troubling question about the proposal is this:

Which among the big-time teams — Mariners, Seahawks, Sounders, University of Washington football, an NBA team, and NHL team — is going to be the sixth ticket in town?

In a seriously bruised economy that is stubbornly staying bruised, one of these enterprises would be the least sports desirable entertainment choice, which is no place to be.

Remember, the Sonics were already on a revenue fade before Schultz bailed in July 2006, which was before the economic collapse of September 2008 and the 2009 arrival of the Sounders and astounding MLS expansion success that makes them a co-equal in this market, unlike any other sports market in the U.S.

Aside from location, the other vulnerability in this proposal is that the private funding of the arena virtually mandates that it secure NBA and NHL teams for the 80-plus dates the anchor tenants would provide.

If we can guess comfortably that the arena itself would cost more than $500 million, plus another $100 million in infrastructure additions and changes, the arena would probably need a minimum of 250 rental dates to cover construction costs — unless Hansen is planning to donate the $500 million to his hometown. I don’t know, maybe successful hedge fund managers need the tax writeoff.

If construction costs aren’t a donation, Hansen and pals will need not only 80-plus winter dates, but an owner for each team who has to risk being the sixth ticket in town. We all know that Steve Ballmer is favorite to be the NBA owner, and while we all know he can afford it, rich guys hate looking stupid. Probably the same will be said for the NHL owner.

So somebody is going to be taking a rotund risk in the the next few years that Seattle is going to be a more robust sports market than it has ever been. Just ask the teams that have tried to sell a stadium suite in this town over the last few years. Sales are possible, but in the class warfare that is becoming a big part of the American culture, any public-facing company that owns a suite these days is going to be perceived, rightly or wrongly, as out of touch with what is going on.

Speaking of the public, we know little about the people, plans, and plausibility for this project, so we are way out over our skis in debating at this stage which teams Seattle can poach. Nevertheless, mayor and members of the council who have been in the know seem on board. That’s good, because their political careers will be in immediate jeopardy if the city’s financial contribution is anything more than one chubby old cop holding the stop/slow sign on First Avenue South during construction.

A huge private investment in Seattle and sports would be welcome. The benefits would be many, not the least of which is knowing Schultz’s morning cup in the office will be forever bitter.

But the risks for the principals are large. Hedge fund managers are used to that tightrope walk, so the presumption is Hansen knows the way. But he’s never been involved in pro sports, where up is down, right is left, and night is day.

And he has to know that one in his new circle will end up with the sixth ticket. Better hope it’s the richest guy, and he has a sense of humor.