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.

SoDo Arena’s Necessary Occidental Avenue S Street Vacation Resurfaces

 Lawsuit, PR Campaign, Property  Comments Off on SoDo Arena’s Necessary Occidental Avenue S Street Vacation Resurfaces
Feb 022016
 

Street Vacation Hearings in March

Chris Daniels reported that Mayor Ed Murray has thrown some weight around to push the Occidental Avenue South street vacation forward to a vote.  Councilmember O’Brien has scheduled the public meeting at the “afterhours” time of 5:30 PM March 15th (sure to be more pep rally than discussion of the public’s value of the street) with subsequent potential subcommittee meetings on April 5th and 19th and, based on the subcommittee’s recommendation, a full council vote following as early as the 25th.  The street currently runs through the middle of Hansen’s proposed arena and would need to be removed to allow construction of the arena.

I am still looking for application documents related to the street vacation, but right now I’m only seeing this document related to designating Occidental Avenue S a Green Street in front of Centurylink and next to SafeCo’s parking garage. (UPDATE – see edit at bottom for a map of this one block street vacation).

The hashed green outline marks the newer green street designation.

The hashed green outline marks the newer green street designation.

The Occidental Avenue S street vacation is expected to only be granted with the acquisition of an NBA team, construction of an arena, pedestrian walkways, and many other improvements.  The county and city councils would still have to vote to issue bonds used to pay Hansen for the arena land and portion of the arena, but if that vote must occur prior to construction activity is something I’ll have to review.  As it stands now, the 5 year deadline on Hansen’s MOU expires in October 2017.

Seattle’s SoDo Arena – No Need to Rush

I will remind you that in May 2013, nearly 3 years ago, comments were along the lines of

“We think we’ll get through the EIS process at the end of the year, and then we’ll probably pay some appeals and (there will) be some things we need to mitigate,” Hansen said. “And we think it will be shovel-ready by this time next year.”

While Sacramento’s arena was, locally, viewed as being further behind in early 2013, with full motivation the Sacramento arena has pushed forward to a very complete state (live cameras here) with opening expected by October 2016.

 

Edit 2/4 – Documents related to the street vacation are trickling in.  This has a map.

Vacated street is the blue portion inside the arena project site outlined in red.

Vacated street is the blue portion inside the arena project site outlined in red.

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.”

Sports Reporters Find Arena Review Process Confusing, Unclear

 Finance, MOU  Comments Off on Sports Reporters Find Arena Review Process Confusing, Unclear
Jan 192015
 

If you were thinking that the Hansen Team’s secretive “what has been submitted, what is the city waiting on, what is Hansen delaying on” approach to getting an arena approved for building is not transparent, you’re not alone.

Geoff Baker of the Seattle Times has to make a lot of calls to city workers and still can’t figure out what to write about, so “we need transparency” it is!

On Friday, the city’s department of planning and development revealed the proposed arena’s final environmental impact statement (EIS) had been delayed three more months because of the complexity of issues involved. That realistically pushes well into 2016 the time frame for issuing any permits for the project proposed by entrepreneur Chris Hansen.

And it prompted an unusual news release from Murray’s office — on Saturday morning, no less — saying he wants more transparency from the planning department his office oversees.

Translated into plain English: Murray is taking heat over the latest delay (ed: or he hates getting phone calls from sports reporters on Friday afternoon).

“There’s some frustration out there on both sides of this,’’ (Murray) said in a phone interview. “People on both sides are struggling to understand the process.’’

Murray is not exactly a huge sports fan, but does perform ceremonial functions (waves to the crowd) at playoff games.  Mayor Murray really has not been involved in any of the arena approval steps (they were before he took office) and, aside from Geoff getting him on the phone to talk about sports, I’m not sure what he’s supposed to be “ushering along” to please sports fans currently distracted by OT wins by a team playing the worst game of the season (until the last minutes of the 4th quarter).  But, transparency!

Frankly, this arena saga could use greater transparency from all sides.

….

Hansen also could be more transparent. Much of this now yearlong EIS delay stemmed from him not submitting requested paperwork until late September.

….

It’s also worth noting the city isn’t compiling the EIS. That falls to consultant Katy Chaney of URS Corp.

But we don’t know exactly why she needs more time. Neither does the mayor, from what he told me.

And that’s problematic. It’s OK in a democracy to request that anyone wanting public money be put through rigorous screening. What isn’t OK is dragging things out indefinitely for reasons few understand.

There’s no evidence that’s being done here. But when the public remains in the dark about a process — even if via ignorance — it can lead to abuse.

Murray needs to spread the word about how this process will unfold. Some sports fans might not like the result, but they’ll at least see it coming.

If only someone in the driver’s seat on EIS submissions, the state of the ownership group, if the Bucks are for sale, and very familiar with where things stand had a website they could put that on…..   but then what would Geoff do to keep busy?