A vote confirming two NHL expansion franchises still hasn’t happened, and the league could be stalling to await the outcome of a Seattle City Council vote on the Sodo Arena proposal.
Inside sports business
A funny thing happened on the way to rubber-stamping those two expansion applications the National Hockey League received in July from Quebec City and Las Vegas.
In short, nothing got approved. And the NHL recently confirmed it won’t hold any expansion vote at next month’s board of governors meeting, making January the earliest time frame for approval.
There have been whispers the delay is about the weakened Canadian dollar, Vegas being America’s gambling Mecca, troubled NHL franchises and so on. But the more plausible explanation is that the NHL is avoiding any expansion decision until after an upcoming Seattle City Council vote likely to decide the fate of Chris Hansen’s proposed Sodo District arena.
That vote, on granting Hansen part of Occidental Avenue South for his arena, is expected by January. No one knows how it will go, only that the lead-up should be politically charged and fiercely contested.
But passing it — future legal appeals notwithstanding — paves the way for Hansen to obtain his Master Use Permit and have his arena “shovel ready” should he choose to build.
And that means, once a vote passes, it’s entirely possible the NHL could conditionally award Seattle an expansion team.
The biggest condition would be Hansen solidifying his financing. A Memorandum of Understanding (MOU) with the City of Seattle and King County provides Hansen’s arena up to $200 million in bond funding if he acquires an NBA team.
But the NBA says no franchise is imminent, forcing Hansen to go mostly, or all, private in funding the arena before his MOU expires in November 2017.
Hansen has a potential NHL partner in Los Angeles real-estate magnate Victor Coleman, who expressed interest in a “hockey first” financial arrangement to fund the arena. But they’ve yet to reach a deal, largely because the NHL’s $500 million expansion fee makes it difficult for hockey here to “pencil out” on its own.
The NHL needs Hansen and Coleman to work something out. When I spoke recently with Jeff Marks, a sports consultant working with Coleman, he told me his client is monitoring Seattle’s political situation and wants assurances Hansen can get his arena approved before signing off on any deal.
Coleman is also eyeing possible alternatives — having been sent the recent AECOM architectural report suggesting a $285 million overhaul could make KeyArena compliant for the NHL and NBA. But that’s only if the council drop-kicks Hansen’s plan. Marks insisted Coleman is committed to Hansen as long as Sodo’s arena remains possible.
So, it comes down to the vote.
NHL commissioner Gary Bettman told me last April that “steel in the ground” is what he wants as far as arenas go. But having Sodo approved could be enough.
The NHL could also insist Hansen and Coleman finalize their financial deal before agreeing even conditionally to expand. Either way, pass the vote, get a “hockey first” deal done and the NHL likely expands to Sodo and Las Vegas by the 2018-19 season.
Gambling in Las Vegas was never a secret while stoking up expansion talk there. The NHL likes Vegas — where there are no major professional teams competing for sports dollars — and it’s only a matter of figuring out who its expansion partner will be.
As far as Quebec City, the NHL knew all about Canada’s fluctuating dollar while courting that arena-ready city. The Quebecor media empire is flush with cash and would be one of the NHL’s most stable owners.
So stable, in fact, Quebec City makes the perfect spot to relocate the troubled Carolina Hurricanes, Florida Panthers or Arizona Coyotes as early as next season. Quebec City also makes a great leverage hammer for the league to pressure those teams into resolving their arena issues right away.
But if Seattle’s council vote fails, Las Vegas and Quebec likely gain expansion and this region’s arena race is thrust wide open.
Tukwila arena proponent Ray Bartoszek could see his project approved early next year, with his biggest obstacle being money to build. But if the Seattle City Council rejects Hansen and leaves Bartoszek the last man standing, finding more Tukwila investors could become easier.
At that point, it’s a race between Bartoszek and anyone willing to finance a Seattle arena. With a potential vote next November on expanding light rail through Seattle Center, the KeyArena renovation option would likely get talked up more by Mayor Ed Murray.
Public records show Murray spent the late summer consulting city lawyers about the legality of working with groups interested in KeyArena while the MOU remains in effect. Sodo opponents, such as the Port of Seattle, argue the city must fully explore the AECOM report and its KeyArena retrofit option before approving Hansen’s venue and will likely make that a focus of any post-vote legal challenge.
The city, for now, says it’s contractually bound by the deal with Hansen.
Then again, if the Sodo project can’t survive a council vote, Murray would no longer have reason to avoid exploring alternatives.
In other words, stay tuned for the most interesting “street vacation” vote in the history of Seattle real estate.