Multiple NBA, NHL execs back KeyArena renovation, new documents reveal

Chris Daniels reports on KeyArena bids

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Multiple NBA and NHL executives are backing the renovation of KeyArena at Seattle Center, according to new documents to be released Monday by the City of Seattle.

That’s just one of the takeaways from the voluminous bids submitted to the city by the Anschutz Entertainment Group (AEG) and Oak View Group (OVG) to rebuild the complex on the western edge of the campus.

The hundreds of pages of documents also lay out plans for $250 million in public financing by one of the groups, and transportation mitigation ideas as well.

In fact, both bids highlight the letters of recommendation submitted to Mayor Ed Murray on their behalf.

Read the AEG proposal | Read the OVW proposal

Los Angeles Lakers owner Jeanie Buss wrote to Murray in a letter dated April 12 in which she expressed her support for AEG to be picked as a partner for redeveloping the “Seattle Coliseum," as the bid describes the project. Buss said in part, “you will be thrilled with them as a partner in your city.”

The Los Angeles-based AEG, as the bid shows, has teamed up with Los Angeles-based Hudson Pacific Properties and has called themselves “Seattle Partners” in the proposal. But the letters of recommendation only specifically cite AEG, and much of the proposal appears to have been written before Hudson joined the effort.

The presidents of the NBA’s Minnesota Timberwolves, Milwaukee Bucks, and San Antonio Spurs all wrote letters to Seattle in support for AEG.

The chief operating officer of the NHL’s Pittsburgh Penguins, Travis Williams, also penned a letter saying “we proudly endorse” AEG on the coliseum project. The COO of the NHL’s Arizona Coyotes, as well as executives with the NHL's Los Angeles Kings and Edmonton Oilers, wrote similar letters endorsing AEG.

The Oak View Group already includes Peter Luukko, who is Chairman of the NHL’s Florida Panthers and includes financial backing from James Dolan, the owner of the NBA’s New York Knicks and NHL’s New York Rangers.

It is clear that both groups spent significant time soliciting the letters of support, in a strategic effort to show the local backing of such a major renovation. In fact, the current mayor of Kansas City Sylvester James wrote a letter in support of both groups.  Oak View CEO Tim Leiweke was head of AEG at the time the company helped build an arena in that city.

Oak View’s nearly 110-page proposal also includes a letter of recommendation from the Ackerley Family. The late Barry Ackerley previously owned the Seattle SuperSonics and was part of the KeyArena renovation back in 1995. Oak View also touts support from the current and former mayor of Kansas City and the mayor of Toronto.  The civically active Bob Donegan, of Ivar’s, wrote a letter to Murray citing Leiweke as “an innovative and visionary leader." Pacific Science Center CEO Will Daugherty also submitted a letter, while not endorsing either group, expressing “strong support” for a renovation of KeyArena.

AEG submitted dozens of endorsements, and took up nearly 100 pages of their RFP bid, with glowing recommendations from multiple local organizations, including the Urban League, Pacific Northwest Ballet, and Greater Seattle Business Association, which provides support to the LGBT business community.

AEG also listed NBA commissioner Adam Silver and NHL commissioner Gary Bettman as references in the proposal.

But that’s where the similarities end.

Both organizations lay out different visions for a remodeled KeyArena, and how they would pay for it, as well as potential transportation solutions.

AEG / ”Seattle Partners” in particular, submitted a nearly 700-page bid and is asking for $250 million in public bonds. On page 381, AEG writes “Seattle Partners requests that City issue approximately $250,000,000 principal amount of municipal bonds (the “City Bonds”), the proceeds of which will be applied to the construction of the Arena.”

It says the bonds would be repaid via “Rent paid by Seattle Partners; The Facility Fee; and City’s share of incremental taxes from the operation of the redeveloped Arena (excluding NBA or NHL events), including the following: Taxes assessed on ticket sales; Business and occupancy taxes; on Parking taxes.” The rest of the construction cost would be paid up front, by AEG.

This will likely be the biggest talking point as the city deliberates the renovation, as the RFP had specifically asked for a 100% privately financed building. The request is even greater than the original memorandum of understanding between SODO Arena investor Chris Hansen and the city, which was signed in 2012 and expires in December of 2017.  That sticking point was a main argument against the SODO street vacation vote last year.

Seattle Partners say they’re looking for a 35-year lease and that there is no risk to taxpayers and no new taxes.  But bonding can be a delicate issue because it can take away from the city’s bonding ability for other large infrastructure projects.

The Seattle Partners also say they will pay $5 million a year to lease the site until the bonds are repaid, and charge a $5 per ticket facility fee that will also go to the city.

In exchange Seattle Partners “will have the sole and exclusive right to sell any and all types of sponsorship, naming and premium seating rights relating to the Arena, the Redevelopment Site and the Seattle Center campus.”

AEG also makes it clear; they’re not willing to work with a SODO project. Their bid contains a want for “Exclusive Rights:"

“In support of Seattle Partners’ substantial investment in the Project, City will not, during construction and for the first thirty years during which the Arena is operational, directly or indirectly, finance, subsidize, provide any incentives for or otherwise assist any Alternative Venue (as defined herein) within the City of Seattle, which could compete with the Arena for events of a type appropriate for or historically held by the Arena. Seattle Partners considers an “Alternative Venue” to be any multi-purpose sports and/or entertainment arena with a capacity between 10,000 and 25,000 seats.”

For no apparent reason, very little is explained about the design of the building. However, Seattle Partners place the project at $546 million and that construction could be completed by January of 2021. AEG’s Bob Newman previously explained the design as a widening of the east and west walls of the existing building, and massive expansion of the south end, bordering Thomas to create 600,000 square feet of space. It extends the existing KeyArena roof to the south. It also does not include building a new parking garage.

In a prepared statement, AEG’s Bob Newman and Hudson’s Alex Vouvalides wrote “We thank Seattle’s elected leaders, city staff and members of the Mayor’s Arena Advisory Panel for leading the ongoing public review process of our proposal to renovate KeyArena to create a world-class Seattle Coliseum. As we brief city leaders and prepare for the public meeting (in May), we firmly believe our proposal is strengthened by public input and review. We look forward to the continuing discussion of how our unmatched expertise in the industry and deep local roots make our proposal the best fit for a next-generation venue at Seattle Center that all can enjoy.”

The $564 million Oak View Bid submitted documentation, which was not part of the released documents, but has been viewed by KING 5, showing Dolan’s Madison Square Garden Corporation offering a financial guarantee for construction, with another guarantee from Goldman Sachs on the debt financing. In a conversation on Sunday, Lance Lopes, who is heading local operations for OVG, said Live Nation and Delaware North are also planning to be “equity partners” if the bid is selected by the city.  Delaware North is owned by Jeremy Jacobs, who owns the NHL’s Boston Bruins.

OVG, in the bid, is offering to pay $1 million a year in a ground lease for 35 years to build the arena and is asking for all revenue from naming rights, sponsorship, concessions and other development.

OVG believe it can construct at 660,000 square building, by excavating another 15 feet into the ground and building out. It plans on adding an 850 stall parking garage. The documents however say the garage is contingent upon OVG "securing support funding from public agencies other than the City for this purpose". "If the Oak View Group proposal for the New Arena Seattle Center is selected by the City of Seattle, we look forward to dialogue with the City, the Port, and other constituents regarding the potential new garage near Seattle Center that would benefit the region’s transportation system," Lopes said in a statement Monday.  Port of Seattle spokesperson Peter McGraw said there has not been formal discussions about a Port contribution to a Seattle Center parking garage.

Their bid also includes “Prevent Advisors," led by former New York Police Commissioner and Los Angeles Police Chief William Bratton.  Lopes said the goal is to make “The Arena at Seattle Center the safest building in the world."

The proposal targets October of 2020 for the “Grand Reopening,” a few months earlier than the Seattle Partners. Lopes said he’s not worried about the recently reported wrinkle about the NCAA tournament, slated to be played in March of 2019 at KeyArena, messing up that timeline.

But how will people get to any new development?  It’s the multi-million dollar, multi-modal question. Both bids offer several suggestions, and promises, but not a firm plan. The City of Seattle has suggested it was not expected in any proposal, but it wanted to see ideas. Both AEG and OVG noted the need to find efficiencies in the South Lake Union and Uptown street grid.

Seattle Partners says it will spend $5 million on transportation improvements, and dedicated 44 pages of their proposal to addressing the subject.

The group claims it will hire a director of transportation for the site, make improvements to a planned “Thomas Street Greenway,” and pay for shuttles from the eastside to get people to and from the Seattle Coliseum. The Monorail is also mentioned as a specific idea for getting people to and from Seattle Center. 

The bid specifically mentions Providence Park in Portland as a model for traffic mitigation. The 21,000-person home of the Portland Timbers is located in a residential area, with little in the way of parking lots. Portland uses a shuttle system, discourages car travel, by setting limits on on-street parking, and encourages people to walk to the game.

Oak View dedicated 15 pages, or roughly 10%, of their overall bid to the topic. It says the arena site would likely go from having 20 events over 10,000 people to 100 events a year.

Lopes, on Sunday, was adamant that transportation issues could be managed. He cited the idea of using a pre-paid parking app so that fans could buy their spot before arriving and not have to worry about circling, and congesting roads.

He also noted data, which he says came from their traffic consultant Parametrix, using SDOT information, showing excess capacity between 6-7 p.m. near Seattle Center.

While the company says it will not fund “off-site transportation,” it is including the parking garage in the plan and plans on building out a car-share pick-up zone south of the arena. Lopes says the group has identified 11,000 parking spots within a 15-minute walk of the arena that could be incorporated into the pre-paid plan. He says he used the measurement, based on a similar 15-minute walk zone used on the SODO arena proposal.

Lopes also cites the competition of the State Route 99 tunnel and the reconnection of three streets in the South Lake Union neighborhood as alleviating the congestion that currently exists.

“I don’t think that’s a reach,” Lopes said Sunday, “Four years from now it will be better.”

Oak View says it will hire a full-time community liaison to help manage the transition if they are selected as the winning bidder.

But both groups know, after months of the preparation, the lengthy bids will now be dissected, and examined  Questions will be asked. There will be an obvious comparison to the SODO effort, which has eliminated public financing and is offering millions of transportation improvements in that neighborhood in exchange for eliminating one block of Occidental Avenue.  The SODO group also says it is looking for a pair of tax breaks in exchange for the block.

AEG clearly made an effort in its proposal to try to avoid an attack on owner Phillip Anschutz. Multiple reports have documented his giving patterns to far-right organizations and anti-LGBT groups. AEG hired Roger Nyhus, Mayor Ed Murray’s close friend and LGBT advocate, to lead communications for the bid. Nyhus held Murray’s re-election campaign kickoff several months ago and has been a staunch defender of the mayor in recent weeks. The bid highlights AEG’s backing of “Pride Days,” and the letter from the GSBA, as examples of the company’s support of LGBT rights.

Murray released a statement Sunday acknowledging he met last week with both groups.

“Seattle is in a unique position where multiple developers want to spend hundreds of millions of dollars on a world-class arena in our city.  Last week, I had an initial review of the proposals to redevelop the Seattle Center Arena. I am enthusiastic about both proposals. I look forward to digging into the details with my staff, the Arena Community Advisory Panel, and ultimately negotiating the best deal to bring the NBA and the NHL to Seattle," Murray wrote.

Seattle Partners and OVG also met with the Arena Advisory Group last week, met up of multiple Seattle business and civic stakeholders.

The public will get a chance to ask questions of the bidders next, at an open house on May 11 at KEXP, 5-8 p.m. They’ll also get to test the traffic. Singer Chris Brown plays next door at KeyArena the same night.

Oak View Group KeyArena Proposal KING5 by KING 5 News on Scribd

Seattle Partners Request for Proposal on KeyArena renovation KING 5 by KING 5 News on Scribd

© 2017 KING-TV


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