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Softy's photos from his road trip with the Huskies, as they beat the Utes
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Chris Hansen, the man trying to bring the NBA and NHL back to Seattle, has written an email to Seattle Times Columnist Ron Judd, responding directly to, and correcting, comments he made in a radio interview Monday. Here's a copy of that email:
I just wanted to reach out to you to clarify a couple of
significant inaccuracies you made on the Kevin Calabro show a couple days ago.
You stated repeatedly that we are not investing any of our own money into the
transaction. Your specific comments were:
“How much of their personal money are the table here?”
“Read the memo of understanding, these people are not
putting their private money on the table they are financing their chunk of it.
It’s a big finance shell game.”
And then went on to reiterate later in the show that:
“He is borrowing the money. Read the MOU. It’s important
because in the event of default it’s not his money on the line, it’s the
borrowed money. It’s a bank that doesn’t care about our little MOU.”
Ron, I honestly have no idea where you got this information
from. But I will tell you that your statement is completely factually
inaccurate and wrong. There is nothing in the MOU whatsoever that says we
are going to use debt financing (bank or other) to completely finance the
private share of this. Nowhere.
That has never been our plan as it would be: 1) financially
impossible with lenders, 2) unacceptable to the NBA, 3) unacceptable to the City
and County, and 4) not in our best interest anyway.
As we highlighted on our SonicsArena.com site today, our
investor group is planning to invest well over $300 million of our own cash into
the project. Not borrowed money that is part of some “finance shell game” as
you implied. Cash. And I will personally be the largest investor in the
group. In fact I have already personally invested over $40 million in land and
other costs to get the project to this point with no debt financing whatsoever.
In addition, we are planning to close the remainder of the Arena real estate in
the coming months, as well as cover the soft costs associated with the
environmental and permitting process, which will push the cash investment
Furthermore, if you do read the MOU, under 12f point (ii)
“parent guarantee” on the top of page 9 of the MOU, you would see that we have
agreed to restrict any borrowings that would be senior to the City as mandated
by the NBA’s league wide credit facility to $125 million or 40% of the franchise
value to insure there will be adequate collateral to protect the city in the
event of a team default.
Further, the City and County will also be entitled to receive
the first distributions of any proceeds from any sale of the NBA Team, subject
only to repayment of any obligations of the NBA Team related to any debt of the
NBA Team to the NBA or other lenders approved by the NBA that are secured by the
NBA franchise and other assets of the NBA Team up to the $125 million cap on
such debt currently allowed under applicable NBA rules (“NBA Team Secured Debt
Obligations”). Notwithstanding the foregoing, however, if the NBA revises its
rules to allow NBA teams to borrow in excess of the current limit of $125
million that may be secured by the NBA franchise and other assets of NBA teams,
then the NBA Team will be entitled to increase the amount of the NBA Team
Secured Debt Obligations; provided, however, that the NBA Team will limit the
amount of the NBA Team Secured Debt Obligations that will be senior to the right
of the City and County to receive distributions of any proceeds from any sale of
the NBA Team to the lesser of: (A) the maximum amount of NBA Team Secured Debt
Obligations that is then allowed under NBA rules, or (B) 40% of the then "fair
market value" ("FMV") of the NBA Team.”
While I completely respect your right to disagree with our
project, I think it is only fair to ask that if you are going to make the kind
of claims you did in a public forum like the Kevin Calabro show, you have an
obligation to get your facts right – particularly when they are around a
critical element of our transaction.
Chris R. Hansen
One Market St.
Steuart Tower, Suite 2625
San Francisco, CA 94111