The Oak View Group unveiled a $564 million plan and Seattle Partners — a group formed by Anschutz Entertainment Group and Hudson Pacific Properties — unfurled its own $520 million proposal to renovate KeyArena.
Two groups are prepared to spend more than $500 million apiece renovating KeyArena for possible NBA and NHL teams while preserving its iconic roof and general exterior structure.
The Oak View Group (OVG) unveiled a $564 million renovation plan Wednesday, and Seattle Partners — a group formed by Anschutz Entertainment Group (AEG) and Hudson Pacific Properties — unfurled its own $520 million proposal.
Both groups said the arena renovation could be done by October 2020 if no unforeseen delays hit. Both added that their plans involve eventually attracting NBA and NHL teams, though they would begin construction without them.
OAK VIEW GROUP
Projected renovation cost: $564 million
Seating capacity plan
NBA: 18,350NHL: 17,100Concerts: 19,100
Creating more space
OVG plans to dig 15feet beneath current bowl to create a 660,000-square-foot blueprint.
“We’re going to do this and stand on our own two feet,’’ Oak View Group CEO Tim Leiweke said of his arena plan, which includes 18,350 seats for NBA games, 17,100 for NHL contests and 19,100 for concerts. “And we believe by doing that we give Seattle its best chance at getting one or two teams.’’
AEG President Bob Newman said his Seattle Partners group feels much the same way about building the arena first and seeking teams once shovels are actually in the ground.
“The arena itself has great bones,’’ Newman said of his proposed 18,113-seat NBA facility, with 17,120 seats for NHL and up to 19,202 for concerts. “The World’s Fair in 1962 and up until now, it has had an amazing life span. But what we found in this process is you can renovate it and make it the best arena in its class while capturing a lot of what’s already in place.’’
City of Seattle officials will study the proposals, which were due Wednesday, decide which is more viable and submit a decision to Mayor Ed Murray by late June. The Seattle City Council then will choose whether to go with the KeyArena site — if either project is deemed viable — or a new arena pitched for the Sodo District by entrepreneur Chris Hansen.
“Today is an important day in our goal of bringing the Sonics home and the NHL to Seattle,” Murray said in a statement. “Two well-known organizations submitted proposals to redevelop KeyArena, totaling more than $1 billion in investments between them. Their interest shows how Seattle has become one of the most desirable cities in America for sports and entertainment.”
The Sonics played at KeyArena before the team left for Oklahoma City in 2008 after failing to secure a new arena deal.
Hansen has resubmitted his proposal — this time for a privately funded arena — and is seeking a new council vote on selling him part of Occidental Avenue South to green-light that project.
Artists’ renderings released by both KeyArena groups show a modern arena with vast concourses, luxury suites and amenities — though OVG goes a step further with three-sided glass “curtain walls’’ offering outdoor views of the surrounding neighborhood and downtown skyline. OVG also has planned a Space Needle Bar with windowed views of the structure as well as a unique setup offering two scoreboards at opposite ends of the rink or court instead of one in the middle.
The groups have taken differing approaches to expanding the 55-year-old arena from 330,000 square feet.
Projected renovation cost: $520 million
Seating capacity plan
NBA: 18,113NHL: 17,120Concerts: 19,202
Creating more space
Would expand the roofline over unused space on KeyArena’s south end to create a facility of about 600,000 square feet.
OVG and CEO Leiweke plan to dig 15 feet beneath the current bowl to create additional seating in its 660,000-square-foot blueprint. In contrast, AEG boss Newman’s Seattle Partners group with Hudson Pacific would expand the roofline over unused space on KeyArena’s south end to create a facility of about 600,000 square feet.
Both would build eight underground loading docks in a revamped facility — there is now just one — and free up more aboveground space that way. By reconfiguring the building with these two different strategies, neither group would have to twist the hockey rink in a diagonal way as initially envisioned in a 2015 report by the AECOM architectural firm.
The ability to create enough space for NHL games without twisting the rink is a big reason the final price tag for upgrading the facility is much higher than AECOM’s initial $285 million renovation estimate when it first revealed two years ago that KeyArena could be modified up to current NBA and NHL standards.
Like Hansen, OVG and Seattle Partners both envision all-private funding — but with a difference. Leiweke said his group does not envision using any of the city or county’s bonding capacity at this time and is incurring all the cost on its own.
But Newman says the Seattle Partners bid would likely use some bonding from the city — he did not give a figure — to capitalize on tax breaks and be more flexible in what it can offer NBA and NHL team owners in terms of revenue-sharing incentives.
“This model achieves not only the short-term, but the very long-term goals of this process,’’ Newman said, adding that Seattle Partners is “backstopping” the financing at every step, would fully repay it and guarantee the city would not lose money.
He also said an additional $144 million in revenue streams would be generated for the city via that financing plan over the course of a 30-year lease.
Hansen’s former Sodo project, abandoned after he lost a City Council vote this past May, had called for up to $200 million in public-bond financing — which was unpopular among some residents and politicians. The big difference in this scenario is that the city would, in effect, be giving the bond money to spruce up an existing asset in dire need of refurbishment rather than creating a new venue.
On the all-important issue of mitigating traffic and parking around the KeyArena, both plan to integrate an upgraded Monorail within their plans to handle a few thousand of the 18,000 or so patrons expected nightly. Both foresee using Uber and Lyft within solutions to offset additional traffic, better-coordinating traffic signals in the area and creating off-site zones to handle incoming patrons.
Leiweke referenced creating several “satellite stations’’ for parking and transportation drop-off points in OVG’s proposal. Newman and Seattle Partners envision a “multi-modal hub’’ near the site of a future light-rail station where existing city buses could drop off arena patrons and cyclists could lock up their bikes.
OVG also plans to build an 850-stall parking garage, and AEG/Hudson Properties would contribute $5 million to accelerating existing city transportation strategies.
On financing, privately owned giant AEG and its $8 billion, publicly-traded Hudson Pacific partner would rely mostly on their financial resources with no contingencies — other than the public bonding it would ask the city to participate in.
OVG in its plan estimates $350 million in project financing would come via loans from Goldman Sachs — which has provided written guarantees of up to $400 million in lending capacity within the bid. An additional $150 million would be funded by OVG, its Madison Square Garden (MSG) company equity partner, and additional money would come through a partnership with concert-promotion giant Live Nation, which would provide live entertainment to sustain the venue until NBA and NHL teams are secured.
As for securing teams, both groups have potential ties that increase that likelihood — at least where the NHL is concerned. AEG’s new Hudson Pacific corporate partner is owned by Victor Coleman, who in 2014 and 2015 sought to become an NHL owner at Hansen’s envisioned Sodo arena.
And OVG has signed a concessionaire accord with Delaware North, owned by Jeremy Jacobs, chairman of the NHL’s board of governors and influential on matters such as league expansion. Leiweke’s brother, Tod, also has strong ties to one of three potential future NHL owner groups for this city — with Coleman and Hollywood producer Jerry Bruckheimer running the other two.