It’s been a good week for Seattle sports fans.
Only hours before the National Football League upheld the hometown Seahawks’ dramatic last-second—and controversial—victory over the Green Bay Packers on Monday Night Football, the Seattle City Council voted 6-to-2 to approve a deal for a new $490 million sports arena designed to lure a National Hockey League or National Basketball Association franchise to the Pacific Northwest’s largest city.
Several Am Law 200 firms landed roles advising parties with a stake in the memorandum of understanding executed between the city and hedge fund manager Christopher Hansen that should smooth the way to building a state-of-the-art facility replacement for the outdated, 17,000-seat KeyArena.
Terms of the tentative deal—which was revised earlier this month to add funding for transportation improvements and an environmental impact study—calls for Seattle to put up at least $200 million of the arena’s overall price tag in a combination of tax revenues and bond financing, while Hansen has personally guaranteed the city’s debt, according to The Associated Press.
That a new arena is on the horizon should provide a particular lift to the city’s basketball aficionados, who have been mired in something of slump since the NBA’s SuperSonics left town to become the Oklahoma City Thunder in 2008. (The pain of that loss flared anew this summer with the Thunder’s run to the NBA Finals, where they lost to the Miami Heat.)
In an effort to block the Sonics’ departure, the city of Seattle retained former U.S. Senator Slade Gorton, formerly of counsel with K&L Gates. Gorton, who played a prominent role in the 1977 settlement that created Major League Baseball’s Seattle Mariners, billed the city a discounted $685 hourly rate for fighting the Sonics move.
Despite Gorton’s efforts—which included a breach of contract suit against Sonics owner Clayton Bennett—the team fled the Emerald City after the NBA and its lawyers from Skadden, Arps, Slate, Meagher & Flom intervened in the litigation to help broker a $75 million settlement with Seattle.
While Gorton later left K&L Gates and opened his own lobbying shop last month, the firm itself is playing a role to bringing an NBA team back to the city.
A K&L Gates spokesman confirmed to The Am Law Daily that the firm is serving as bond counsel to King County—where Seattle functions as the county seat—in connection with the arena deal. David Thompson, a public finance and municipal law partner in K&L Gates’s Seattle office, has taken the lead on the matter for the county.
Seattle itself is being advised by bond counsel Hugh Spitzer and Marc Greenough, both of whom are municipal and public finance partners at Foster Pepper. Spitzer says his firm has long served as the city’s bond counsel.
Both Foster Pepper and K&L Gates are well acquainted with arena issues in the State of Washington, and both are working closely with Seattle’s city attorney Peter Holmes on the deal with Hansen, according to Spitzer. Holmes beat former city attorney Thomas Carr in a 2009 election that focused heavily on the Sonics’ departure. (Carr went on to win election as city attorney in Boulder, Colorado, the following year.)
Spitzer says Orrick, Herrington & Sutcliffe public finance of counsel Susan Barry in Seattle is also advising the city on the arena deal, along with Hogan Lovells government and legislative affairs partner Craig Umbaugh and corporate partner Tyler Harvey in Denver.
Hogan Lovells has previously handled legal work the NFL’s Seahawks and Major League Soccer’s Seattle Sounders. The Am Law Daily reported last week that Harvey, who joined Hogan Lovells in 2007 from Holme Roberts & Owen, was leading a team from his new firm working on the proposed sale of sports and entertainment giant Anschutz Entertainment Group.
Foster Pepper’s Spitzer says that Hansen, a founder and president of San Francisco–based hedge fund Valiant Capital Management, has cycled through several lawyers as the arena plan progressed. Daniel Grigsby, chair of the national sports law group at Jeffer Mangels Butler & Mitchell in Los Angeles, confirmed Wednesday that he is now advising Hansen on the matter, along with local land use and real estate attorney John “Jack” McCullough, a name partner at Seattle’s McCullough Hill Leary.
During the negotiations, Seattle has sought information on Hansen’s various investments, including his stake in social networking site Facebook, to assess the hedge fund manager’s financial solvency. As part of the deal with the city this week, Hansen has agreed to an independent audit to prove he’s worth at least $300 million, according to news reports.
When initially presented with Hansen’s plans earlier this year, Seattle Mayor Michael McGinn and King County Executive Dow Constantine—both of whom are lawyers—appointed a 10-member arena advisory panel to evaluate the proposal’s financial merits. The panel’s members included former Sonics coach and NBA legend Lenny Wilkens and Stoel Rives health care partner Anthony Miles, who joined the firm in 2009 from K&L Gates. (Miles told The Am Law Daily via email that he did not participate in the body’s deliberations because “professional obligations” required him to resign before the first meeting.)
Hurdles to a final deal remain. Peter Goldman, director and managing attorney of environmental group the Washington Forest Law Center, and Mariners vice president of legal and government affairs Bart Waldman signed a letter earlier this month objecting to the tentative agreement between the city and Hansen. (Goldman was out of the office and not immediately available for comment; the Mariners have publicly cited traffic and scheduling concerns as their reasons for opposing the arena.)
Spitzer says the environmental impact study must still be completed in order for the deal to move forward, and Hansen himself also must find a team willing to move into the new building.
The NHL’s Edmonton Oilers, whose own arena lease expires in 2014, are one team that has reportedly held discussions about possibly moving to Seattle.