With a few strokes of a pen, Seattle Mayor Ed Murray and Oak View Group CEO Tim Leiweke capped one months-long process, and agreed to enter another.
In front of a gaggle of reporters and a host of local dignitaries, the two signed an agreement to enter negotiations on final terms on a Memorandum of Understanding (MOU) for the redevelopment of KeyArena, after the mayor announced his selection of OVG as the preferred partner for the project.
OVG was one of two bidders to respond to the city’s request for proposals, with the Mayor’s Executive Review Team unanimously selecting the group on June 2.
“This is not a nostalgic endeavor,” Murray said. “This is a civic endeavor.”
Murray framed the redevelopment of KeyArena as “one part of a larger plan” to make Seattle Center an international iconic district, akin to Chicago’s Millennium Park and the Quartier des Spectacles, an arts and entertainment district in Montreal.
“If the Space Needle is the front door of this beautiful place, KeyArena is the action packed rec room,” he said.
Oak View’s $564 million proposal is entirely privately-financed — mostly through private equity guaranteed by the Madison Square Garden Company, with $100 million-plus coming in the form of a loan from Goldman Sachs.
The fact that the plan does not require any of the city’s bonding capacity was one of the elements Murray said set it apart from its competition. The mayor also said the proposal had the best design, with “an entirely new arena under the iconic roof.”
“I chose this proposal because I believe it is a proposal that will bring the Sonics back to Seattle eventually, attract an NHL team, and give us the best entertainment that this world provides, and bring it right here to where we are,” Murray said.
Along with leaving the roofline intact, OVG intends to dig down 15 feet lower than the existing floor, to add more usable square footage. At 660,000 square feet, the redeveloped arena would be in line with recently constructed facilities in Las Vegas (650,000), Sacramento, and Brooklyn, New York (both 675,000).
Leiweke was beaming about the potential for the project, telling those on hand that after developing places like Staples Center, LA Live, and the O2 in London, “this, to me, is the most iconic, most visionary, and the greatest opportunity I have ever been involved with, and we could not be more excited.”
Both the mayor and the Oak View head also addressed what they believe sets this effort apart from the continued push by local investor Chris Hansen to construct a new arena in SODO. Murray said of three proposals — the two considered in the RFP process in addition to Hansen’s — the Oak View plan was the best financially for the city and keeps taxpayers from incurring risk.
The city also owns the Key, and Murray raised concerns about what could happen with a new facility elsewhere.
“This property is in desperate need of renovation, if it were to exist even without major teams, we’d have to do something with it,” Murray said. “If there’s an arena built somewhere else, we have a huge liability on our hands, a place that could easily go dark and have a negative impact on the neighborhood.”
Leiweke said he’s been in touch with Hansen throughout the KeyArena process, and has invited him to join their efforts to bring an NBA franchise to a renovated KeyArena.
“I always told Chris Hansen, ‘Chris, if this doesn’t work, and we can’t build one of the great arenas in the world, I will be the first one to come back and endorse you, get behind that vision, and fight hard to help that work. But if it does work, this is what we need to get behind,’” he said.
The Oak View CEO also pushed back on claims that his group is more committed to creating a world-class concert venue than bringing professional hockey and men’s basketball franchises to town.
“Concerts are a part of what we will do here,” he said. “We are going to be world-class on concerts, we will be one of the top stops for live entertainment in the world, but we are going to get a team, maybe two, and we are host to the Storm. This is a venue that will host both sports and music and do it quite well, and yes there are economics that will be able to make sure we keep everyone vibrant and happy.”
To emphasize the group’s pro sports credentials, Leiweke noted Oak View’s partnership with Delaware North, a concessionaire company owned by Boston Bruins owner Jeremy Jacobs.
“To have them as our partner, to have them helping us with our vision, and to have them helping us with content in our building, it’s a very good thing,” he said.
Leiweke also said the group is “extremely blessed” to have MSG involved, as members of both NBA and NHL Board of Governors.
“We have a voice, we have a vision, and we have a partner that will help us fight every day to get those teams here,” he said.
He also announced the addition of two new partners on Wednesday, Boston Celtics minority owner and University of Washington alumnus David Bonderman, and producer Jerry Bruckeheimer.
“You will not find two better people, two more class individuals, and two more dedicated individuals,” he said.
Oak View Group executive Irving Azoff did, however, note the group’s strong music industry backing, and where Seattle stands in the minds of that community.
“It’s second to none in terms of its respect from the artists and my peers in the business,” he said. “You deserve a first-class to come see and hear music.”
While the city and group have now agreed to enter negotiations, the process is far from over. Murray acknowledged, “if we can’t solve the issues of transportation and financing, they become deal-killers,” but said both sides are fully aware there’s work left to be done.
The hope is for the Seattle City Council to vote on a completed MOU by the end of 2017.
“Seldom in life do you get a chance to come into a marketplace and a city this unique, this dynamic, this visionary, and not only get a chance to build a new arena but to bring winter sports back to the city, and we’re committed to making sure that the passion we have for this city will be the passion we give you every day,” Leiweke said.
For more information on the KeyArena redevelopment process, to view Oak View Group’s RFP submission, or to submit feedback, visit www.seattle.gov/arena.