SEATTLE Seattle, King County and the man behind a proposed Seattle NBA/NHL arena announced Wednesday they had reached a memorandum of understanding to build the $490 million facility and that the public cost could be cut significantly if no NHLteam is attached.

There are still many hurdles to clear before any construction can begin, including securing an NBA franchise.

The agreement released by Mayor Mike McGinn, County Executive Dow Constantine and San Francisco hedge fund manager Chris Hansen says construction on the arena could begin as soon as Seattle knows it is getting an NBA franchise.

The memorandum of understanding (MOU) now goes before the city and county councils for approval. [See the McGinn-Constantine letter to councils.]

We're willing to shepherd this transaction through environmental and SEPA and get this project shovel ready at our own cost and risk, said Hansen.

The agreement adds a new wrinkle to the original proposal: An NHL team is no longer needed to start construction. Only an NBA team, with a non-relocation agreement signed, is needed to begin construction on the proposed 18,500-seat facility.

The city-county investment in the project would be capped at $200 million if both an NBA and NHL team are acquired.The city would cover $120 million and the county would pay $80 million.

If it's only an NBA team, the city still covers $120 million, but the county would pay just $5 million. [Read the interlocal agreement about the bonds.]

The bonds issued to cover those costs would be repaid with revenues generated by the arena, a point city and county officials said will result in no actual costs to taxpayers.

The agreement calls for $290 million in private investment.

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.

The MOU also says the city will try to obtain the rights to the name, colors, logos and memorabilia of the Seattle Supersonics from the Oklahoma City Thunder. That team was originally the Sonics before Clay Bennett and his ownership group reached a settlement with Seattle in 2008 to let them out of their lease with KeyArena.

[Read the Summary of MOU and interlocal agreements.]

Other challenges faced by arena backers include concerns voiced by the Seattle Mariners 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.

Mariners spokesperson Rebecca Hale said the team still had concerns about the transportation impact of a new arena, but declined to comment specifically on the MOU.

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, said 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.

The Port of Seattle issued a similar statement, saying the arena project has the potential to hamper one of King County's most reliable and successful economic engines. There must be a thorough analysis of impacts to transportation, land use, and, most importantly, the jobs that depend on access to Elliott Bay and markets across the state prior to further action.

McGinn responded to the traffic concerns bluntly Wednesday.

People coming to the city, to an event is a good thing, he said, followed by applause from supporters.

What happens to KeyArena? In a letter to McGinn, Hansen suggests removing some seats and turning it into a theater venue or an exhibition space. But he warns either option could be expensive and would need study.

Hansen also notes that his group would make investments in the arena so it could host an NBA and NHL team for two years.

Information from KING 5 s Chris Daniels and Associated Press compiled by Travis Pittman.

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