NHL Welcomes Expansion Application from Seattle

 Finance, MOU, Other Arenas  Comments Off on NHL Welcomes Expansion Application from Seattle
Dec 082017
 

After 5 long years of being a “tag along” on the SoDo arena plans, local NHL fans have something to rejoice over.  The NHL Board of Governors’ meeting was occurring this week and Seattle’s new MOU with OVG was an inevitable topic.  The board discussed Seattle’s new arena plans and welcomed an application, with a $650 million expansion fee.  Fortunately, OVG has some fairly deep pocketed friends who have been interested in owning a NHL team.

The local reaction was enthusiastic (even if old-school NHL gear was bright enough fans could still make out players through a dense fog and cataracts).

The NHL is so confident in the bid the group authorized a season ticket drive similar to what happened in Las Vegas. Unlike prior non-league-sanctioned ticket waiting lists concerning the NBA’s Kings, the Las Vegas NHL ticket drive involved a deposit.

All of this bodes well for locking in a good deal on a new arena in town and having a professional sport to occupy it soon.  The NBA is still elusive, but at least one team will reduce the number of people intent on public pillory of Leiweke.

OVG CEO Tim Leiweke going as far as asking Seattle to hold him accountable.

“If we don’t have a franchise a year from now, they should take me and put me on top of that arena and while they start tearing that arena down, they should let me dive into the middle of the rubble because I haven’t done my job,” said Leiweke this week.

Added below the break are roundtable interviews put out by Sonics Rising with John Barr, Chris Daniels, and Brian Robinson as well as a “mega fan meeting” with OVG’s Leiweke held after Mayor Durkan signed the MOU.  Continue reading »

Mayor Jenny Durkan Signs OVG MOU, Making MOU Officially a “Go”

 Finance, MOU, Other Arenas  Comments Off on Mayor Jenny Durkan Signs OVG MOU, Making MOU Officially a “Go”
Dec 072017
 

The MOU for a New Arena At Seattle Center, built and operated by Oak View Group, was officially signed by the Mayor and Tim Leiweke in a ceremony at the KeyArena on Wednesday December 6, 2017.  The event included some scolding (but no 4 letter words) of reporter Chris Daniels (later gifted Sonics socks), questions about next moves to acquire teams, questions about “other competing arenas,” and a lot more joy than has been seen at many other press conferences in Seattle of late.  The actual signing of the document produced some special “gift” pens from Mayor Jenny to CM Juarez and CM Bagshaw, although Tim was clearly less focused on rotating through ceremonial pens and more focused on getting on with building the arena/acquiring teams.  Good man, Mr Leiweke.

Video of the press conference and an embedded version of Chris Daniels and Chris Cashman’s The Next Best Podcast episode about the “OVG Enthusiasm Gap” are below the break.  The news that came out from the NHL board of governors the following day is closing that gap, rapidly.

Still unclear is if the Seattle City Council is going to exempt the OVG MOU from I-91 (SMC 20.47) or if the city council will actually try to figure out a calculation for the “cash value” of an arena lease for 55 years to determine I-91 compliance.  While I have faith that the “cash and property” being leased will be a gain of significant value to the city, the calculations are messy and easily challenged in court.  Prior coverage has suggested the council considered explicit exemption in the MOU but the version signed does not reference I-91 or the Seattle Municipal Code Section 20.47.
Continue reading »

New Arena at Seattle Center / OVG MOU Approved 7-1 by Seattle City Council

 MOU, Other Arenas, Property  Comments Off on New Arena at Seattle Center / OVG MOU Approved 7-1 by Seattle City Council
Dec 042017
 

King5’s Chris Daniels has a thorough write-up of how the Seattle arena process has shifted from SoDo to Seattle Center, culminating in the MOU with Oak View Group being approved by the Seattle City Council.  The audio segments are particularly delightful, hearing a city councilmember fired up and discussing how she developed an arena plan while a few members of the public denigrated her character.  She clearly lays out the counter-argument that the SoDo MOU played out but ArenaCo failed to deliver on their duty, the NBA team (although the wealthiest member of ArenaCo did go rogue and buy a NBA team in So Cal).

The Daniels article runs down how the Seattle Center arena proposal was carefully crafted with city councilmembers working on their favored topics, ultimately crafting the MOU draft that was approved by a 7-1 vote today (councilmember Lorena Gonzalez not being present due to prior plans for her wedding).  Amazingly, a usual contrarian on the city council, even Socialist Kshama Sawant voted to sign onto this public-private development involving 1%’ers.  Testimony surrounding her vote made it clear that she was able to secure enough labor provisions that she wanted to see this MOU go forward.

Audio segments and the Dec 4 2017 Full Council video after the break  – Continue reading »

Seattle Center Arena Replacement By Oak View Group In December 2017?

 Finance, MOU, Other Arenas, Property  Comments Off on Seattle Center Arena Replacement By Oak View Group In December 2017?
Dec 032017
 

After a long RFP process involving multiple bidders (although Seattle Partners/AEG withdrew when their proposal involving city $250 million in city bonds was not well received) and some additional negotiation, it appears that Seattle’s quest for a new arena suitable for the NHL and NBA is coming to a close on Monday. This has caused some gnashing of teeth among those devoted to Chris Hansen and his plans, which we’ll save for later.

Seattle Center Arena Has Needed Renovation and Waiting on ArenaCo Isn’t Forward Progress

The KeyArena at Seattle Center has been a looming white elephant for the city, thanks to demands of the prior NBA franchise ownership to refurbish the facility with a questionable configuration for hockey. Some reports have suggested that the prior ownership was happy to explore NHL teams and then scuttled that plan in a scorched-earth move, capped by the offset ice re-build. The AECOM report of KeyArena options that the city commissioned outlined multiple scenarios, all requiring 9 figure investments with a future profitability very uncertain, particularly if another large arena is built in the city. At the same time, the Seattle Center arena’s city ownership requires the city make some plans for major investments to keep up with amenity standards, even as a concert, WNBA, and college basketball venue.

AECOM’s report included rough estimates of project costs to repurpose KeyArena, all well into the hundreds of millions of dollars.

Projections for Key to be self-sustaining were widespread. A2 required no competing large arena in town and B2 required the NBA to play in the renovated KeyArena space

Additional details about the options from the AECOM study are also below.

Details on how the KeyArena would be reconfigured under the scenarios analyzed.

The basis of AECOM’s estimates included modest investment (A1+2), significant renovations preserving pro-sports capacity (B1+2), significant repurposing into multiple entertainment venues (C) and even “something else” (D).

Under both AECOM scenarios with an arena also built in SoDo (A1 and C), the Key projects loses money. Only the Key as the primary arena in town (A2) or with a NBA tenant (B2) would have projected profits. This doesn’t bode well for the future of the Key if the ArenaCo group converts it into a secondary venue. Even the configuration ArenaCo proposed in September as a secondary venue is different from Scenario C, lacking acoustically divided stages and with a lower maximum capacity, which could be even less profitable.

ArenaCo’s Composition and Faith In Their Ability to Complete Project Has Changed

While the SoDo group has done an admirable job of crafting a good deal for the city, re-authorizing the city’s partnership with the ArenaCo group without a plan to actually build an arena ahead of a sports franchise would be turning our collective backs on going forward with having a new arena in Seattle. ArenaCo’s named investors, with the loss of the $37B investor, no longer have the majority of the capital once advertised for the expensive project of building an arena with mostly-private funds and purchasing professional sports team(s).

Hansen Seeks to Terminate MOU in SoDo, Build Privately and Scoops KeyArena Remodel RFP

 Finance, MOU, Other Arenas, PR Campaign  Comments Off on Hansen Seeks to Terminate MOU in SoDo, Build Privately and Scoops KeyArena Remodel RFP
Oct 312016
 

Chris Hansen and SoDo Arena

Chris Hansen re-emerged from the inky shadows and dropped a bit of a bombshell last week in a letter sent to the City Council, County Executive Constantine, and Mayor Ed Murray.  Hansen says his group no longer needs public bonds to assist with financing the arena (even though it wasn’t about the financing but a means to return tax money to the project) and is, instead, able to proceed with only future tax money being expressly abated.

We have concluded that a changed economic climate makes possible the private financing of the arena. For that reason, and to address concerns expressed by city council members, we would consider revising the street vacation petition to eliminate public financing of the arena. In such a case the MOU would be terminated and the rights and obligations of the parties under the MOU would end. The City and County would recoup the $200 million in debt capacity, and tax revenue streams generated by the arena would cease to be encumbered for arena debt service.

  • Approval of the street vacation
  • Granting of a waiver of the City’s admissions tax for the arena, just as similar waivers have been granted for the other sports venues
  • Adjustment of the City’s B&O tax rate for revenue generated out-of-town

The letter glosses over the fact that the admissions tax was the largest chunk of the money for the prior bond repayments and the other venues in town (Centurylink and SafeCo Field) did a tax-swap where the county collects admissions tax even though they’re venues within the city limits (and they only collect a fraction of the legally allowed 10% admissions tax).  Details may be coming, but a few days later the public learned why Hansen was grabbing headlines where he could.

KeyArena Remodel RFP On the Way

We learned a few days after Hansen’s announcement that senior analyst for Mayor Murray, Sara Belz, had been a point person for soliciting KeyArena renovation proposals with Irving Azoff and Tim Leiweke in one group and current KeyArena operator AEG in another.  Apparently the discussions have been off-and-on for a while, maybe being hinted at during the “did AEGCOM’s report get hidden by the council” story in April 2016.  The mayor was planning to make an announcement of the plan to issue the official RFP to renovate the KeyArena in January 2017 and Hansen may have rushed his announcement to refocus the public on his plan.  Details are even more unknown, since an RFP is mostly a framework for a project and bidders need to respond appropriately.

Still, as the NBA season kicks off, Seattle has a lot of arena news, but there are no NBA teams available, no plans to expand the league, and then there’s the great unknown of the NHL.

KeyArena Remodel – Geoff Baker and Sports Radio Roundup

 Lawsuit, MOU, PR Campaign  Comments Off on KeyArena Remodel – Geoff Baker and Sports Radio Roundup
Feb 252016
 

Geoff Baker at the Seattle Times has launched into a theory that the city council buried the AECOM report about potential use of the Seattle Center Coliseum (formerly sponsored to be named the KeyArena).  The city council drafted a memo that, as Field of Schemes puts it, says “nyah” but the report does have footers and headings with April, May, and June dates in just the first few pages, despite titling it for a June release.  The April and May footers agree well with Baker’s published timeline and suggest some sort of lackadaisical editing as delays occurred.  Godden is reported to have said the report was posted to the council website, but I was looking and the council’s nice collection of arena documents had gone 404 by May, so we’re left to presume Jean is referring to official city clerk files, somewhere, while not discussing it publicly.

 

Local sports radio personalities Danny, Dave and Moore discuss this between about 20 – 34 minutes in the following show.  The hosts appear to have not actually read the AECOM report, instead looking at pictures, as evidenced by commenting about “simply twisting the ice” as the report clearly states that the rebuild completed in the 90s made the lower bowl and seats a structure separate from the roof floating structure, allowing for a relatively cheap rebuild of the new configuration.  It would require excavation and new seating, etc but apparently there’s a lot of unused space below that roofline currently.

 

Ian and Puck also discussed the same things in their 2-23 hour 1 show at 11:30ish here, with added rants about “bikes” and “bertha” thrown in.  Softy also interviewed Chris Daniels in his 2-23 hour 3 show here who does agree that the delays are oddly timed (Chris starts speaking at about 18:30 into the show).  Daniels suggests that a soft majority of the council is ready to vote in favor of the vacation to clear the plate,being  somewhat emboldened by recent media coverage.

The sports radio folks are pushing hate on the Seattle Times and a public comment “rally” at the street vacation hearing, while calling that vacation the “last major step” which is, of course, factually wrong as made very clear by the county council stating they had to vote before issuing any bonds (and the city would have to do so as well).  Oh well, February is kind of boring for sports around here.

 

Sports radio is pushing the public comment period on March 15th at 5:30 as the next “battle” and “showdown” and is not really discussing all the nuances of the vacation (what public benefits are required, etc), so expect lots of “rah”.  You can read the source vacation documents posted here. March – April 2016 is several months behind the timeline outlined a year ago for when this would occur.

NHL Dream Still Being Kept Alive, *crickets* From the NBA

 MOU, Property  Comments Off on NHL Dream Still Being Kept Alive, *crickets* From the NBA
Dec 032015
 

Local arena supporters have been having a field day tearing into a local sports reporter’s overplay of someone expressing interest in KeyArena remodels.  Unfortunately, such all-hat, no cattle individuals are extremely common in the world of professional sports ownership dreams.  The KeyArena alternate uses study that recently came out similarly throws out many options for the site, but none of the options are so instantly appealing to be an obvious use for city money/resources.

Speaking of which, another local reporter, Chris Daniels, is continuing to sing the sirens’ call to NHL fans by poring through some of the public record e-mails with NHL-potential-owner Victor Coleman.  This is the same Coleman who was rumored to bid for NHL expansion before declining to do so and has sometimes been linked to Hansen’s SoDo projects but also hasn’t committed to be a firm partner.  There’s keeping things open for negotiation, sure, but you probably do want to come up with an NHL-first MOU that’s acceptable (or *gasp* do it with 100% private money) and that’s a pandora’s box Victor hasn’t opened yet.

Occidental Street Vacation

For those keeping track, SDOT did forward their recommendation to approve the street vacation of Occidental Avenue for Hansen’s arena.  Daniels forecasts this issue will sleep through the holidays and return to be taken up by the new city council.

On Monday, the Mayor Murray’s office, along with SDOT, forwarded a street vacation recommendation to the Seattle City Council. Hansen has offered to build a public park, pedestrian walkway, and parking garage in exchange for eliminating a 680-foot stretch of Occidental Avenue South needed to build the arena. The recommendation concluded “that Occidental is not necessary to freight movement or Port Operations.”  The council is not expected to take up the issue until at least January.

You’ll recall the MOU vote in Seattle was 7-2 under Bagshaw, Burgess, Clark, Conlin, Godden, Harrell, Licata, O’Brien, Rasmussen with the italicized members in opposition.  This new street vacation will likely face Bagshaw, Burgess, Harrell, and O’Brien as returning “Yes” and “D1 Herbold?”, Sawant, Rob Johnson, Debora Juarez, and Lorena Gonzalez as new members.  Will they go forward voting on a street vacation for a project with no start date and is that a strategy to further cement Hansen’s site as the only one to consider ?

Tim Burgess, Council’s Arena Negotiator, Says an NHL-Only or NHL-First Arena Unlikely

 Finance, MOU, Security  Comments Off on Tim Burgess, Council’s Arena Negotiator, Says an NHL-Only or NHL-First Arena Unlikely
May 082015
 

Tonight, we have a few words from Tim Burgess which clarify that the NHL was not considered a stable investment of the public’s money as far back as the 2012 negotiations.  When combined with the reported tensions between Hansen’s NHL guy, Coleman, it sounds like Chris has been backed into a corner that would cost hundreds of millions of dollars that only Ballmer was willing to burn.

“We specifically wrote the idea of a hockey-only or hockey-first arena out of the agreement three years ago,” Burgess said. “We did that because it’s very weak financially. It’s just too risky for the city.”
The reason is that a typical pro hockey team generates about a third less revenue than an NBA team. So city analysts concluded a hockey arena might not be able to cover the city’s bond payments.
“If we’re going to do hockey, there would have to be a substantial lowering, if not elimination, of the public investment,” Burgess said.

That alone could be a fatal blow. But the arena also now has a triple whammy of political problems.
-One is that Hansen got in trouble down in California for making an illegal, undisclosed campaign contribution.
“That caused a few of my colleagues to be very concerned about his methods and style,” Burgess said.
-Two is that the big money behind the project, Microsoft’s Steve Ballmer, bolted when he bought the Los Angeles Clippers for $2 billion. It didn’t escape notice at City Hall that $2 billion could have built the Sodo arena four times over. Yet they needed public help?
-And the capper: News hit last month that a different group has proposed building an arena in Tukwila. They said it would be 100 percent privately financed.
You can’t compete with free. Burgess suggested it would be next to impossible now to convince Seattle citizens to help pay for an arena when another group is willing to do one without public money “only 15 minutes away.”