Mayor Ed Murray’s decision not to run for re-election could affect arena situation

Mayor Ed Murray withdrawing his re-election bid throws uncertainty into Seattle’s ongoing arena pursuit.

While Murray plans to remain in office through December – leaving plenty of time to complete a late-June decision on a KeyArena renovation process involving two proposals – what happens after that is unclear. The Seattle City Council would take Murray’s Key­Arena recommendation of either the Oak View Group (OVG) or Seattle Partners (SP) and compare it to another arena project pitched in the Sodo District by entrepreneur Chris Hansen.

“We’re moving forward with the process,’’ Joe Mirabella, a city spokesman, said Tuesday. “The arena remains a priority for the administration.’’

But questions surround what happens after Murray hands off his selected KeyArena proposal to the council. It’s possible the council could give provisional approval to Hansen’s project even while still vetting a KeyArena offer.

That contract could take into next year to be negotiated and occur with a new mayor already in office. And depending on who the mayor is – and his or her influence with council members – the process might not be as smooth as some had hoped.

“The idea that the city is going to make a decision by June on the two KeyArena proposals really doesn’t make a whole lot of sense given the complexity of the proposals,’’ said former Mayor Mike McGinn, who is running for a shot at his former job.

McGinn said Tuesday that he remembers the initial Sodo project pitched by Hansen — for which he negotiated a memorandum of understanding as mayor back in 2012 — underwent far more thorough vetting.

And while he says it’s possible to see more extensive vetting placed on whichever KeyArena group Murray chooses in June, McGinn isn’t sure either OVG or SP should be ruled out that soon.

“I suppose that’s possible if one is clearly better than the other,’’ he said. “But at this point. … I haven’t really seen that one proposal is superior to the other.’’

McGinn also said he favors the council agreeing to sell Hansen part of Occidental Avenue South to make his arena project “shovel ready’’ even as the KeyArena bids are being considered. Some city officials have privately shrugged off that idea as unfair to the KeyArena groups.

City Councilmember Tim Burgess, who voted “yes’’ to Hansen’s initial request for Occidental – defeated by a 5-4 council vote last May – said Tuesday he doesn’t necessarily see Murray’s decision impacting the process.

“He’s making his recommendation to council in late June, so he’ll be able to get that done as planned,’’ Burgess said. “After that, we’ll just have to see. But I don’t think it will have that big of an impact.’’

Hansen has long argued that he needs a “shovel ready’’ arena to attract the NBA. Both KeyArena groups, meanwhile, say they’re ready to carry out renovations of more than $500 million “on spec’’ even before teams become available.

In a studio interview on 710 ESPN Seattle’s Brock & Salk show on Tuesday, Hansen said he’d also agree to build his Sodo arena “on spec’’ if the city gives him the same “hundreds of millions’’ of dollars in public subsidies he claims the KeyArena groups are getting.

Hansen didn’t specify how he arrived at that public money amount, though he referenced a parking garage OVG plans to build on city land using funds it will seek from the Port of Seattle.

Hansen also mentioned OVG seeking to divert tax revenues into an arena operations fund.

SP is seeking $250 million in public bond funds on its $521 million proposal – a move it estimates will save it $48 million off regular financing costs. Such bonds are also usually exempt from federal taxation, thus diverting additional money from the public pool.

It’s not known where any other mayoral candidates stand on the arena issue.

Rumors persist that former U.S. Attorney Jenny Durkan will declare her candidacy this week and emerge as a serious contender. A political source said Durkan met Monday with officials at the Seattle offices of Paul Allen’s Vulcan Inc.

Allen owns the Seahawks, a team pressing the city to force Hansen into a binding event-scheduling agreement with teams operating in the Sodo district before his project is allowed to proceed further.

The city and the two KeyArena renovation groups have a Thursday open house planned for the public to question them on the proposal details.

Lance Lopes, a Seattle spokesman for OVG, said: “We respect Mayor Murray’s decision to not seek re-election. Oak View Group will continue to work with the City of Seattle, Mayor Murray and his staff, to support their effort to successfully complete the request for proposal process put forth by the Mayor in our effort to build a world-class arena at Seattle Center.’’

SP spokesman Aaron Pickus issued a statement by the company saying: “We are excited about the potential to renovate the Seattle Coliseum so that it remains a civic asset for years to come as a world-class arena for the NBA and the NHL. This has always been about what’s best for the city. That’s why we have been working closely with the City Council, the Advisory Panel and the executive branch throughout this process and will continue to do so going forward.”