The wheels are turning for a new, self-funded NBA and NHL arena in Seattle in the city’s Sodo neighborhood, funded privately and publicly by tax revenue on the arena development and the professional teams that would call it home.

The plan was spearheaded by Seattle-born investor Chris Hansen, who with his investment group is planning to purchase an NBA franchise and bring it to Seattle. He also is searching for a partner to bring an NHL team to Seattle.

Under the plan, which must still go through a newly appointed regional citizen panel, any teams at the new arena would be bound to stay in Seattle for 30 years. That means there could be no repeat of the Sonics fiasco for at least three decades.

“If we succeed, this project means hundreds of millions of dollars of private investment – an investment that will help our city recover from the longest and deepest recession since the Great Depression,” said Mayor Mike McGinn at an announcement Thursday at City Hall.

Read a PDF of Chris Hansen’s letter to McGinn and King County Executive Dow Constantine. Additional documents are below.

The proposed arena could take two years to construct and would be located south of the Safeco Field parking garage, where Hansen already owns 3 acres. Several businesses would need to be relocated and several buildings would need to be demolished. The facility would be jointly owned by the city of Seattle and King County, and available for additional recreational and cultural events.

No public funds would be committed to the arena until NBA and NHL franchises have been secured for Seattle. Hansen also would not commit his money until he has secured a team. So, there will be no new arena until Seattle has a new team.

However, the proposal paves a clear route for the NBA’s return to the Emerald City. The Seattle Sonics left in 2008 after a controversial and divisive effort to fund a replacement for KeyArena, where the team had played for decades but was eventually deemed unsuitable by the NBA. A returning NBA team could temporarily play at KeyArena while a new venue is built in Sodo. A developer will study whether KeyArena could host hockey games.

Hansen is hoping to raise $290 million in private investment for the new venue. The entire cost of the facility would be between $450 million and $500 million. Public funding participation would be capped at $200 million, with revenue generated mainly by operation of the facility, and with rent paid by the teams and by the arena operator.

Under the proposed agreement, if those sources do not generate enough money, the teams would be on the hook to pay more in rent, said Dwight Dively, finance director for King County. He spoke with media at a City Hall briefing before McGinn’s news conference.

“There will be no new taxes because of this,” said Fred Podesta, finance director for the city of Seattle. “There will be new revenues created by the arena.”

City and county representatives stressed that there would be little to no funding obligation by local taxpayers. The proposed agreement includes financial security provisions that would make Hansen’s investment group responsible for construction cost overruns and operational shortfalls, said Beth Goldberg, director of the city’s budget office.

For a basketball tenant, Hansen reportedly has his sights set on the Sacramento Kings, whose city — in a situation eerily similar to Seattle’s loss of the Sonics — is under intense pressure to build a new basketball facility. Sacramento must submit a financing plan by March 1 or risk losing the Kings, and city leaders are running out of time.

Constantine, who recalled attending the Sonics’ 1979 NBA championship parade, said he and McGinn have appointed an arena panel to analyze the proposal. The panel includes the coach of that ’79 team, Lenny Wilkens; former Seattle and King County Councilwoman Jan Drago; and El Centro de la Raza Executive Director Estela Ortega.

“We expect them to give a frank and honest appraisal and to let us know if they think this is something that makes sense for our community to pursue,” Constantine said. “If it pencils out, construction of this arena would create thousands of good-paying construction jobs — the kind of jobs we’ve been fighting for, fighting to create to get us out of this recession.

“Games played by a new NBA team would bring visitors who spend dollars, thousands of dollars, to boost our regional economy on hotels and restaurants, not just in Seattle but on the Eastside and SeaTac and Federal Way, on outdoor recreation businesses and wineries in Woodinville.”

McGinn and Constantine have asked the panel to submit its findings in March. The Seattle City Council and King County Council could consider a financing proposal as soon as this spring, the mayor’s office said.

Meanwhile in Sacramento, that city’s council pushed forward by voting Tuesday to allow city staff to enter into talks with 11 firms interested in leasing downtown parking in the city, under a plan that could raise half of the nearly $400 million needed to build a new arena in Sacramento, The Sacramento Bee reported. Considering Sacramento has been discussing a new arena for years now, Seattle’s aggressive arena timeline could up the stakes for Sacramento.

Now Seattle and Sacramento appear to be off on a sort of foot race. With Thursday’s announcement, Seattle has a potential financing proposal for a state-of-the-art arena in a big sports market. Sacramento, it appears, is now scrambling. Last season, the Kings very nearly relocated to Anaheim; this time, it could be Seattle.

NBA Commissioner David Stern has said Seattle is a “great” destination for the NBA, The Salt Lake Tribune reported last week. In fact, Stern had a conversation with Hansen about a year ago, the newspaper reported, though Stern said it was “just a general conversation.”

Meanwhile, the struggling Phoenix Coyotes professional hockey team may also be up for grabs. NHL Commissioner Gary Bettman has said the league is looking for a buyer to keep the Coyotes in Phoenix, but has strong interest in bringing a team to Seattle — as long as there’s a venue.

The Seattle Times, which originally broke the arena story two weeks ago, reported that Hansen met with three Seattle City Council members on Wednesday to discuss the arena proposal. He contacted Constantine’s office several weeks ago, and briefed the rest of the City Council on Thursday morning, the Times reported.

Hansen, a San Francisco hedge-fund manager, is a relatively unknown name in the realm of multimillionaires connected to Seattle. A Roosevelt High School graduate who also attended Bishop Blanchet High, he’s not alone in wanting pro basketball back in the Emerald City. A potential site on the Eastside was being eyed by potential investors like Chicago businessman Donald Levin and Microsoft CEO Steve Ballmer. That was last summer — it’s unknown at this point whether Ballmer is interested in contributing to Hansen’s plan.

Here are some more details of Hansen from The Seattle Times:

In his interview with The Times, Hansen said was pursuing his goal out of a sense of “civic obligation” and not for financial gain. He said he wasn’t interested in lobbying or political posturing. Rather, he said, the terms of the arena proposal should stand on their own merits. “This is for the people of Seattle to decide if it fits their needs,” Hansen said, adding that he did not want to be seen as a hero or savior.

If Hansen ends up the reason Seattle gets an NBA team again, he may not have a choice in the matter.

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Follow the links below for PDFs from the Thursday afternoon press briefing:

– Chris Hansen’s letter to Mayor Mike McGinn and King County Executive Dow Constantine

– Information about ArenaCo

– A city-produced FAQ sheet about the proposed arena

– Information about the arena review panel

– Chris Hansen biography from McGinn’s office

– Arena announcement from McGinn and Constantine

Seattlepi.com reporter Casey McNerthney contributed to this post. Visit seattlepi.com for more Seattle news. Contact Nick Eaton at nickeaton@seattlepi.com or on Twitter as @njeaton.