Seattle Partners drops bid for Key

And then, there was one.

While Mayor Ed Murray was expected to choose one of the two KeyArena proposals by the end of the month, the exit of Seattle Partners in a letter to the city on Sunday — leaving only the Oak View Group — was a surprising twist in the Emerald City’s lengthy arena saga.

The letter, signed by AEG Facilities President Bob Newman and Hudson Pacific Properties Chief Investment Officer Alex Vouvalides stated that while the group remained confident in the merits of its proposal, “significant factors through the bidding process have eroded our confidence in the ultimate execution of this project, no matter which group is selected.”

“We fear the City is driving toward an unrealistic financing structure, and we believe the City has failed to conduct a sufficiently thorough, objective and transparent process to properly evaluate the respective strengths and weaknesses of the two proposals and, most significantly, to identify the proposal best positioned to deliver a project consistent with the community’s interests,” the letter read.

The group had forwarded a $521 million proposal, and had requested $250 million in public bonding, while citing an independent financial analysis that projected a $144 million surplus for the city over a 35-year lease. Seattle Partners had also pledged to guarantee all financing through revenues that would not exist without the proposed renovations.

The letter from Newman and Vouvalides went on to say that while the group has actively sought feedback from community leaders, city staff, and members of the advisory council, it had “seen little indication of the collaborative and iterative process we were told to expect and is typical of such requests for proposals.”

The letter also noted that the city had refused requests from the group, and others, for a “best and final” offer from both bidders.

That statement comes on the heels of a letter sent to the mayor last week from the Uptown Alliance, that said the group could not favor one submission over the other after finding both proposals “lacking in different but fundamental ways.”

That letter also encouraged the city to prepare an addendum to the RFP to obtain additional information from the groups. 

Deborah Frausto, chair of the Uptown Alliance’s KeyArena Subcommittee, said on Sunday the project is still about establishing a partnership with a developer that agrees to the same goals as the community, and figuring out how to do it. 

“The goal to get a relationship with a partner that is going to be really at the table, seeing both the city and the community and Seattle Center as strong partners is still first and foremost,” she said. “I think whenever you weaken your competitive ability to do that, which is now what’s happened for the city by only having one proposer to negotiate with, that that is not good for us.”

Frausto said the neighborhood group expects the city and developer to adhere to the goals of the Uptown Urban Design Framework, and that the community is at the negotiating table.

“Not just in the background, but with a strong role and a strong voice,” she said. 

Murray responded to the departure of Seattle Partners from the KeyArena RFP process in a statement on Sunday night.

“There are strengths and weaknesses in each proposal and the City fully expects a robust negotiation upon choosing a preferred alternative, to ensure the final plan meets the needs of the surrounding neighborhoods, the city, Seattle Center and those who will use the building for years to come,” Murray said.

However, the release from the mayor’s office also shot back at Seattle Partners, noting that in mass email two weeks prior, the group applauded the city for a “thoughtful public process,” and that engagement with the city and public had “strengthened our proposal and crystalized our approach.”

Murray is expected to make an announcement on Wednesday, selecting Oak View Group as the chosen RFP bidders. The City Council would later vote on a final memorandum of understanding or lease agreement with the group.

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