To no one's surprise, Seattle mayor Ed Murray on Wednesday afternoon announced his pick for the proposal to renovate KeyArena: Los Angeles-based Oak View Group.
In front of the Seattle Center Wednesday afternoon, Murray said he decided by Friday to choose OVG's proposal to rebuild KeyArena over Seattle Partners—which withdrew its proposal over the weekend—largely because of its "privately financed" plan. (That excludes the 850-space parking garage that seeks funding from the Port of Seattle, The Seattle Times reported.)
Murray was joined by OVG CEO Tim Leiweke, as well as a large group of representatives from sports teams, labor, YouthCare, as well as investors like Live Nation. The $564.1 million project would dig 15 feet lower than the existing floor, increasing the space to 660,000 square feet, according to the city—anticipating 18,000-19,000 patrons for sports games and live concerts.
"If the Space Needle is the front door of this beautiful place, KeyArena is the action-packed rec room," Murray said Wednesday. "The (arena) has been central to the city's identity for decades, and many of our most electrifying moments have happened here."
What's happening to that historic designation? The goal is to seek historic landmark status for KeyArena by keeping the roof intact. In fact, the idea is to benefit from that designation with federal tax credits ($70 million worth of credits, according to The Seattle Times).
Where's the money coming from? Here's the $564.1 million in spending broken down, according to OVG's proposal:
- $196.9 million from financial loans, likely from Goldman Sachs; (In a letter sent in April, Goldman Sachs told OVG it would be eligible for $150-$200 million, more if the company acquires NHL or NBA teams.)
- $277.2 million from equity;
- $50 million from federal tax credits, using historic designation;
- $40 million in city tax reinvestment of revenues from the arena. (Murray said he'll want to renegotiate some details to the financing.)
Why is the city so intent on investing in KeyArena, and opposed to building a new stadium in SoDo? It comes down to a city-commissioned study released in 2015. If the SoDo stadium were to get built, the study recommended that the city invest $100.5 million to keep KeyArena profitable as a second-tier venue. The study projected that the city would run KeyArena on a deficit of anywhere from $220,000 to $510,000 a year in the long run.
Can a (men's) NBA team really come back? "Chris (Hansen), if you want an NBA team, this is where it's going to happen," Leiweke said at the press conference Wednesday. Later he added: "We already have an anchor tenant, and it's the Seattle Storm, and we will treat them as such." The Sonics left Seattle in 2008 when the team's ownership couldn't convince the state to publicly finance a new stadium. KeyArena currently has less than 18,000 seats and was a small venue for the NBA team—though the Seattle Storm stuck around. So yes, a larger venue has the potential to bring back a professional men's basketball team, especially with some investors in KeyArena who have connections to the NBA; but is it realistic? Leiweke said hoping for an NHL team is a better bet.
It probably won't be anytime soon, that's for sure. So if you miss basketball, might want to just, you know, go to a WNBA game.
What's the timeline? Murray said he wants the MOU to be signed and sent to the city council for a vote by the end of the year. If approved, then there are designs, environmental reviews and the permitting process. OVG estimated construction to start in January 2019 and to reopen the arena by October 2020.
Updated June 8, 2017, at 3:20pm: This article originally incorrectly identified the NASC as the National Association of Sports Commissions; $40 million will come from the city's revenues from the New Arena at Seattle Center. I apologize for the error.