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King County Executive Dow Constantine and Seattle Mayor Mike McGinn on Wednesday will formally announce that a Memorandum of Understanding has been reached for the Seattle Arena proposal, sources tell KING 5 News.

The formal document, if approved by both the Seattle City, and King County Council, would give investor Chris Hansen the go-ahead to begin preliminary work on his proposal for a new NBA/NHL sports arena in the SoDo neighborhood.

Hansen had previously agreed to invest $290 million into the project. The key component is an interlocal agreement that will lay out how much the city and county would have to commit in bond capacity for the project. A preliminary term sheet called for that number to be capped at $200 million, and be repaid through revenues generated by the arena.

That part of the agreement will likely receive the heaviest public scrutiny.

Barring any last-minute hurdles in the negotiations, the unveiling of the agreement is set for 10:30 a.m. at the Chinook Building. One source said Hansen is expected to be present on Wednesday morning's event.

Hansen's planned arena project still faces many more hurdles. For one, the Seattle Mariners have voiced concerns about the effect of a new arena on traffic in the already congested SODO area, which is home not only to the Mariners' Safeco Field but also to CenturyLink Field, home to the Seahawks and the Sounders.

Labor and business groups involved in operating the Port of Seattle have expressed similar concerns about traffic.

Nobody has been able to bring to us a city with this combination of major marine cargo activity, says Dave Gering, the Executive Director of the Manufacturing Industrial Council of Seattle. I think you're not sure you're ready to sign the Memorandum of Understanding unless you understand the ramifications.

Gering says he's looking forward to hearing more about the agreement, and is pleased the proposal has prompted discussion already. The issues are coming out that need to come out.

No NBA or NHL team has committed to playing in Seattle, though both leagues have teams facing ownership and economic challenges in their current home cities.

But for Jason Reid, that doesn't matter right now. The loss of the NBA, and pursuit of its return has become his passion project of sorts.

We're pretty excited. This is the next step going forward, says Reid, the 'Sonicsgate' filmmaker. He stood at the proposed site Tuesday night and looked around. There is nothing going on here right now, Idon't see any traffic. This area is prime for development.

He believes if the MOU is approved, the NBAwould want to return, They would probably want to get the black eye of Seattle off their face.

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