No matter what happened in the arena process, Seattle needed to figure out what to do with the city-owned facility. And no reason to hurry, it is taking full advantage of the opportunity.
Inside sports business
When it comes to Seattle arenas, Brian Surratt has a firm grasp on what’s emerged as the new narrative.
The senior city official is not only tasked with overseeing the KeyArena renovation proposals being prepared by Anschutz Entertainment Group (AEG) and Oak View Group (OVG), but also with keeping tabs on the Sodo District project pitched by entrepreneur Chris Hansen. The fates of both sites have always been intertwined. And that’s likely the most misunderstood part of this arena saga.
“I think we’ve been presented with an amazing opportunity to take another look at KeyArena,’’ said Surratt, who heads the city’s economic development office. “Whatever we do on the question of arenas in Seattle, we have to answer the question around KeyArena and what that’s going to be for the community.’’
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Even back when Hansen’s project seemed the only game in town, local politicians worried about what would become of city-owned KeyArena. They’ve for years sought ways to conduct a badly needed upgrade of the moneymaking facility without throwing truckloads more public cash at it.
That’s why the city council commissioned the AECOM architectural firm three years ago to study options for the arena’s future. And what AECOM’s team found by late 2014 stunned everybody: the arena could actually be remodeled for NBA and NHL without destroying its iconic roof.
That was a game-changer. A solution for the arena’s future — the only one in which private sports developers might foot the entire cost — with a safeguard if historical preservation claims threatened to derail things.
Sure, the city and developers might prefer to level KeyArena and start over — which is still an option. But if preservationists blocked that, the AECOM report offered another way.
Only problem was, Hansen had a 2012 public funding deal that gave him a five-year exclusivity window blocking the city from discussing KeyArena renovations with anyone else. Only after Hansen lost a city council vote last May, effectively killing his project, did he agree to waive KeyArena exclusivity and drop his public-funding request in hopes the Sodo proposal would get another look.
By then, the AECOM report had been passed around in 2015 to multiple sports and arena figures including AEG and Madison Square Garden (MSG) Co., now the financial muscle for Tim Leiweke’s OVG.
Both AEG and OVG expressed interest to the city. And once Hansen waived KeyArena exclusivity, they jumped in to the fray.
“We had two global leaders in this industry around arenas saying ‘This may work. This could work,’ ’’ Surratt said. “When they approached us and said ‘We want to kick the tires and explore this’ that opened up our eyes. And we said ‘OK, we’ve got some viable potential partners that want to explore KeyArena. And we feel obligated as public stewards of that asset to really make sure that we understand the viability and the possibilities there.’ ’’
Understanding those possibilities means shifting the city’s long-dominant arena narrative: The one with Hansen as the lone option to get the NBA back.
The city doesn’t buy that the NBA and NHL prefer Hansen’s project. In fact, Surratt said both are onboard with the city choosing between KeyArena and Sodo.
“Even when that AECOM report was published, between that publish date and now, a lot of dynamics have changed within the industry,’’ Surratt said. “(NBA) Commissioner (Adam) Silver was on record last April talking about the size of arenas and no longer needing to have 20,000-or-25,000-seat capacity arenas to make the game compelling. And so, that has really changed the game when it comes to the arena industry and what the NBA and NHL require for successful teams.’’
Also, Surratt says Silver and NHL commissioner Gary Bettman, in recent phone conversations with Murray, never urged him to speed things up.
“There’s been no firm indication on when this needs to be worked out,’’ Surratt said. “What we do know is we’ve been encouraged by both the NBA and the NHL to continue down this path. They would want some clarity, frankly, from the city on an arena project. They have largely been encouraging of us as we evaluate the viability of KeyArena.’’
If NBA expansion were imminent, Silver would have nudged Murray along. And Murray would listen, as he can’t risk being caught arena-less in an expansion scenario with a November election looming.
Surratt shrugs off concerns the NHL could soon lose interest here. Or, that KeyArena will get renovated and no teams will come — as happened in Kansas City and Quebec City.
“We Seattleites have a tendency to be a little too modest in how we stack up,’’ Surratt said. “But this market is a highly, highly desirable market. And I believe if we build a facility that meets the needs of Seattleites and this region, investors will come and teams will come. I believe that.’’
The city isn’t going to, as some have suggested, provisionally approve vacating Occidental Ave. South and make Hansen’s project “shovel ready” to lure teams while the KeyArena process plays out this summer. Not when AEG and OVG are spending millions preparing KeyArena proposals for an April 12 deadline assuming they’ll be luring those teams if approved.
And frankly, if the leagues aren’t rushing things, there’s no reason to give anybody a head start.
“I can’t think of any other city in the country or in the world that has three investor groups who are willing to spend a half-billion dollars, potentially, on a facility,’’ Surratt said. “So, it’s actually incumbent upon us to be thoughtful in this process and not rush.’’
Agree or not, that’s our city’s new arena narrative. Viewed through that prism — rather than the previous one where Hansen’s vision largely overshadowed KeyArena’s ongoing needs — it explains why things are unfolding this way.