The price tag for the Climate Pledge Arena privately funded renovation will surpass $1 billion as work continues on finalizing the venue for the Kraken’s inaugural NHL season in October.
Tim Leiweke, CEO of the Los Angeles-based Oak View Group (OVG) developer spearheading the arena overhaul, said in an interview Monday that the venue alone is now expected to cost $1.05 billion. In addition, an adjacent $75 million private parking garage and $25 million signage and other work around Seattle Center brings the total project cost to $1.15 billion.
“We have continued to add to the building, and there were also COVID-19-related costs,” Leiweke said. “But a lot of it is things we decided to add and do. There were the things we committed to get the arena deal with the city, then the things we needed to do in order to get the NHL franchise. And then there’s the NBA component so we can be NBA-ready if and when the league ever decides to make a team available.”
The WNBA’s Storm also will play its home games at the arena.
Leiweke made his comments on a day OVG announced a long-awaited founding partnership deal that makes Verizon the official 5G and technology partner for Climate Pledge. The agreement was finalized months ago to include three OVG venues — Climate Pledge, the New York Islanders’ UBS Arena in Long Island, New York, that is opening next October and the planned Coachella Valley arena site in California where the Kraken’s coming American Hockey League affiliate hopes to open play in late 2022.
New York-based Verizon was picked over local tech giant T-Mobile of Bellevue and Texas-based AT&T. Wireless work by Verizon at Climate Pledge began months ago to prepare the venue for interior finishes now underway as the race to complete construction by October continues.
“We were impressed by their view of 5G and their commitment to 5G,” Leiweke said of Verizon, adding the company’s technology should enhance speeds at which arena patrons can use their mobile devices for voice and data functions. “Technology is only good if you can access it.”
No financial amounts were made available. When The Seattle Times reported Verizon as the leading tech partner contender in January 2020, two business community sources said OVG had received offers exceeding $5 million annually with a guaranteed infrastructure spend of $20 million.
“The Verizon 5G platform is changing the way that fans experience live events and venues operate,” Verizon vice president for sponsorships Yvette Martinez-Rea said in a statement. “Working with Oak View Group as a strategic technology partner will enhance the in-arena experience for years to come.”
Verizon joins other Climate Pledge founding partners that include Amazon, Symetra, Virginia Mason, Alaska Airlines and WaFd Bank.
“It’s heavily driven by the 5G, because that involves everything in our agreements,” Leiweke said of the Verizon deal. “There’s a lot of technology in the building with a lot of partners involved.”
The agreement also calls for a private members Verizon Lounge and perks at OVG venues for Verizon Up loyalty program customers, including VIP entrance access, complimentary food and beverage, merchandise credits and photo opportunities with players.
Leiweke said the company’s existing relationship with the NHL carried weight over its tech competitors. He added that it was part of the Kraken’s expansion agreement with the NHL that existing league partners be given “first shot” at deals with the club.
“We were impressed by all of them,” he said of the three wireless heavyweights. “We know them all well. But Verizon had an inherent advantage in its prior relationship with the league. And when you’re talking about arenas in Seattle and New York, that means something.”
OVG is said by sources to have sought between $4 million and $6 million annually from its founding partnerships. Among other things, the deals will help recover the construction costs originally estimated at $600 million when the City of Seattle picked OVG to renovate the arena in spring 2017.
That estimate jumped to $700 million by mid-2018, $800 million when the NHL franchise was awarded in December 2018, $850 million by early 2019 and then $930 million by spring of that year. Among the add-ons were having the arena’s luxury suites be designed by East Coast architect David Rockwell, a pricey enhancement OVG feels will generate future revenue for an NBA team and increase the chances of being awarded one.
OVG and its partners are covering the entirety of the project’s cost and have committed to paying $260,000 per relocated game for the Storm this summer — up to $2.6 million a season — as the WNBA franchise won’t be moving back in by June as initially hoped.