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).

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