KeyArena remodel will support NBA/NHL

There has been some concerns raised about KeyArena becoming a music only venue that would essentially lock out the Sonics and the NHL. The concern appeared to originate from a Wall Street Journal article that was quoted and magnified by a local article.
The Oak View Group’s Lance Lopes addressed some concerns raised by the WSJ article:
“Our long term vision includes music, professional sports, and special events,” Lance Lopes, director of special projects for the Oak View Group, who is leading local efforts on the bid, said Friday in response to the article. “The new arena at Seattle Center will accommodate and seek out a wide variety of entertainment rich experiences. Music though is the programming we can count on when we open the doors to the new arena at Seattle Center.”
There still seems to be a little fear by a small percent of fans that worry this could be a ruse to be a music only venue, but I figured I would address it.

The RFP

First of all, the KeyArena RFP calls out NBA and NHL in the first sentence of the City-of-Seattle-Logointroduction and called out on the first objective of the list of City’s Arena Objectives. so clearly the city is making that a priority when seeking proposals.  The RFP also calls for “Confirmation that the proposed conceptual design(s) are intended to comply with NBA and NHL requirements for potential future tenancy.” It seems counterproductive to think that Seattle Partners and OVG would go to great lengths (and cost) to be NBA and NHL compliant, with the intent to never housing teams from those leagues.

Expectations from the leagues

As much as we would love to have the leagues come out and say “If you build it, we will come”, we all know that will never happen. In fact, both leagues are probably tired of answering questions about Seattle. It’s noise that takes away from their product. They want fans and journalists talking about the Stanley Cup Playoffs and NBA playoffs; not franchises that don’t exist and might never exist, if we don’t get an arena. It is crystal clear that the leagues will expand when they are ready and without a built (or half-built) arena we don’t stand a chance of getting a team. Although we have not seen anything directly, we have heard that the bidders (Seattle Partners & OVG) have been in regular contact with both leagues to make sure they are meeting the league requirements in the RFP. It might be wishful thinking, but my hope is that both bidders have validation of compliance with league requirements with a letter from both the NBA and NHL.

The top grossing concert venues.

According to this article from Billboard Magazine in 2015 of the list of the world’s 10 Top-Grossing Concert Venues, 4 of the 6 North American properties on the list have both NBA and NHL franchise.
Top grossing venues
I am not an expert in Arena economics but I think it is fair to say that having only a few tenants (NHL, Sonics & Storm) that book half the calendar is a good thing and the list of top grossing concert venues supports that claim.
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2 proposals for KeyArena RFP process

As you have probably seen by now, two groups have submitted their responses to the City of Seattle’s Request for Proposal (RFP) to renovate KeyArena into a world-class entertainment facility that could someday accommodate the return of the Sonics and the arrival of an NHL franchise. Seattle Partners (AEG & Hudson Pacific) and Oak View Group delivered some stunning proposals; exceeding most people’s expectations on what could be done with the KeyArena site. It would be premature to do so, but neither group announced any potential NBA and NHL ownership groups. I am sure neither league would appreciate implying expansion while both leagues have said (at least publicly) that they are not expanding.

Oak View Group

The Oak View Group is spearheaded by none other than Tim Leiweke who has a long and healthy resume working for NBA and NHL clubs. Most notably he was the CEO and President of Maple Leafs Sports & Entertainment, the parent organization of the Toronto Raptors and Maple Leaf Sports.

Their proposal:

  • Cost of Project: $564M
  • Square Footage: 660,000
  • NBA Capacity: 18,350
  • NHL Capacity: 17,100
  • Public Financing: None

Seattle Partners

AEG & Hudson Pacific have come together to submit a bid as Seattle Partners. If you recall, AEG is majority owner of the Los Angeles Kings and minority interest owner in the Los Angeles Lakers. Victor Coleman, CEO of Hudson Pacific, has been clear on his intent to bring an NHL team to Seattle.
Their proposal:
  • Cost of Project: $520M
  • Square Footage: 600,000
  • NBA Capacity: 18,113
  • NHL Capacity: 17,120
  • Public Financing: $250M in public bonding (They have recently backed off on this “suggestion,” so it is unclear the current state of this piece of the response)

Summaries

I cannot summarize the proposals any better than executive summaries themselves and a lot of the details have not been revealed, so here are some links to the proposals and the better articles I’ve read on those proposals.

What is next?

Brian Surratt, Director of Office of Economic Development laid out the evaluation criteria to the Seattle City Council and the timeline with the following slides:
KeyArena RFP Eval Criteria 2017-04-17

KeyArena RFP Overview 2017-04-17

My Take

Both proposals look promising and would appear to be able to bring the NHL to Seattle and bring the Sonics back as well. People still seemed concerned about traffic and parking but it is a very subjective piece to measure. Especially when you consider the traffic patterns will be shifting once the 99 tunnel is completed and the 2 additional streets open up. Additionally, the density is changing while car ownership decreases in more urban areas.  How the Mayor & City Council weigh all the pros and cons of KeyArena is anyone’s guess. I appreciate the evaluation criteria but it seems very unclear on how it all comes together. The hope is that one of these options will be recommended to the City Council. One thing is for sure, it is going to be a busy 3 months.

Oak View Group round up and Bettman comments on Seattle

The Oak View Group’s Tim Leiweke was in town and made a couple key stops to speak with sea_key_arena_entrthe Seattle Times and King5’s Chris Daniels. As you might recall, the Oak View Group is one of the two expected bidders on the KeyArena redevelopment RFP that could host both an NBA or NHL team. Before today, it was assumed that either AEG or OVG would be the operators of a remodeled KeyArena and not the owners of either an NHL or NBA franchise.

Seattle Times Article

The Seattle Times was definitely an enlightening read, filled will lots and lots of quotes from Leiweke himself. I urge you to read the entire article to make sure not to take my thoughts below out of context.

Here are some of the article’s highlights:

“We believe it’s going to take three or four years, preferably three,’’

My take: Seems pretty optimistic based on the snail’s pace that the SoDo project has gone. However, this is a project the city initiated vs a developer initiated project; the city might be a little more inclined to expedite the process to meet their timeline. There wasn’t a whole lot of urgency from Hansen after the Sacramento deal fell through. I honestly have no idea how long this will take. Seems like arenas can go up in a hurry, if the partners are motivated.

Leiweke said he’s in constant contact with Bettman and NBA commissioner Adam Silver and has been assured there is no imminent expansion or team relocation on the horizontimliewikeandgb for either league.

My take: Both Leiweke and AEG have strong relationships with both NHL & NBA and so I would expect both Oak View and AEG to be in lockstep with the leagues. I see this as a competitive advantage these guys have on bringing either an NHL or NBA team to Seattle over Hansen.

“I think that there are certain leaders in this community that finally took a step back and listened to Adam Silver when he said ‘There’s no expansion coming, and we’re not giving a team to Seattle right now because there’s no team moving.’ I don’t think that’s politics. I think that’s the reality of understanding the truth. And I personally believe you’ve been misled.”

My take: This isn’t really anything new. Other than an isolated report several months back reporting that expansion was happening, the league and owners have consistently said there will be no expansion anytime soon. Of course, we heard that for about 2 years leading up to the NHL’s expansion process, so it is within the realm of possibility that the league could do a 180 on this in one day. With no mention during Silver’s presser at the All-Star game and now this, it still feels NBA expansion is a ways out.

Speaking about Hansen’s attempt to buy and move the Sacramento Kings to Seattle, Leiweke said. “I don’t think that was a good day for Seattle, and I’m speaking just as a (Toronto Raptors) member of the board of governors at the time and watching that. … You don’t threaten (then-NBA commissioner) David Stern. And I’ll leave it at that.”

My take: Hmmm…there is some smoke there, but hard to know what Leiweke was talking about. Sounds like there might still be some fence mending that still needs to happen between Chris Hansen and the NBA. I’ve heard the NBA is still reluctant to deal with Hansen, but I never could substantiate that theory, so I’ve largely dismissed it. This does not validate it either. But there is something going on here between the NBA and Chris Hansen.

King 5 Piece

Later in the day, Chris Daniels from King5 published this article. The story line was similar to the Times piece with a couple added thoughts. (full interview posted here.)

Speaking about the traffic conditions down there, Oak View Group’s Lance Lopes said, “Frankly, a lot of it is based on misperceptions.  A great example: Mercer mess. If you go to Mercer at six o’clock at night and look at what the westbound traffic looks like, it actually flows quite well. Eastbound is difficult, we’re actually not going eastbound, we’re having people coming in to that area.”

My take: I travel westbound on Mercer a couple times a week between 4 and 6 from I5 to 99 and it does flow relatively well. How it will perform when there are high capacity events at KeyArena could be a different story. Then again, traffic in Sodo also increases dramatically for events at Safeco and Century link field.

“(Bettman) is fully dedicated to finding a solution in Phoenix. We cannot and we will not ultimately go prey on trying to move franchises. That was a major mistake and we will not make that mistake.”

My take: I know there has been some speculation that the Coyotes might move here, but I’ve remained pretty consistent that this will not happen. The NHL has proven that they will do everything they can to keep the team somewhere in the greater Phoenix designated market area (DMA).

Bettman in Vancouver

Coincidentally, Gary Bettman was in Vancouver last night and was asked about Seattle. Bettman says “We aren’t paying a lot of attention to it because there is no building.” He then proceeds to name all the players trying to get an arena deal done….but he’s not paying attention. This is as good as it will get from the Commissioner. I would love to hear a statement from both leagues saying that they are in regular communication with AEG or Oak View Group to ensure that the RFP responses can work as a long term home for both the NHL and NBA, but we will never get that from a commissioner until the opening faceoff or tipoff.

The arrival of Leiweke and AEG on the scene can only help the situation. Getting some honest and candid comments from any of the arena players is refreshing and I anticipate we will continue to hear more and more from AEG, Hansen, and maybe some potential NHL team owner one day.

Let’s view this as a significant progress report that people are talking to the leagues and working though some of the unique challenges with a redevelopment of Key Arena.

SoDo Group files new petition for Occidental Street Vacation

Yesterday, Chris Hansen and the SoDo group filed a new petition for the Occidental Street Vacation. arenarenderingoThis new proposal was consistent with their communicated plan over the last 6 months but was not formalized until Wednesday.

The big things are:

  1. 100% Private Financing.
  2. No arena gets built until a team from either the NHL or NBA is acquired.
  3. The Hansen Group will contribute an additional $1.3M in transit improvements.

When the SoDo group originally announced 100% privately financed model, I was optimistic but after soaking it in a bit, I am not sure that it moves the needle as much as people think it does. This might be me becoming more cynical or it could be the dose of reality we need.

It has been my belief that the 100% private financing was going to happen even if the Occidental Vacation was approved the first time. The public financing in the existing MOU would only kick in if the Hansen group procured an NBA team before the MOU expiration date in November of 2017. The NBA (& Steve Ballmer)  has been very clear that they are not expanding anytime soon. This leaves only one option…lead with the NHL. Well, if they were to lead with an NHL team, there is no public financing. That said, this gives the City Council members some air cover to switch their vote.

 As far as the “No arena gets built until a team is acquired” and $1.3M in transit improvements. The former seems like a no brainier, but if a council member wanted that as a condition, then let’s include it. The $1.3M is a big number, but in the grand scheme of the project, this is a relatively small number.

 In the meantime, the KeyArena RFP remains open until the end April. The Mayor released a statement after the new proposal was submitted.

mayor-quote

We have been down this road of optimism before. and in the end, any news is better than no news. My word of advice is to not get overly excited or optimistic on any one event until we are literally watching the puck drop in Seattle.

Raising Funds for the RMHC Hockey Challenge

I have the honor of playing in the Ronald McDonald House Hockey Challenge. This is an annual event put on by the Seattle Thunderbirds and the Ronald McDonald House of Western Washington and Alaska. If you don’t know what the Ronald McDonald House is all about, you should. 1063679_100150506978_990452666_nThe Seattle Ronald McDonald House is a home-away-from-home for 700 families each year while their seriously ill child receives medical treatment at Seattle Children’s Hospital. Some families stay for nights, some for months. The House is a warm, supportive and safe place during a very difficult time. Over the years I’ve met with families and discussed their stories and I can tell you it is one amazing charity that has a real impact on people’s lives.

The purpose of the Hockey Challenge is to raise money from the RMHC. This is the one time of year I ask for a little help. I am willing to match up to $1,000 of whatever is contributed in the next two weeks. As a bonus, if I can get over 100 donors, I will be putting in an additional $500. If I can get 100 people to put in just $10, I will match $1,500. Let’s make it happen.

The Hockey Challenge is held on February 18th at ShoWare Arena in conjunction with the Seattle Thunderbirds-Portland Winterhawks Ronald McDonald House Hockey Challenge game. After the Thunderbirds game, a group of all-stars will take the ice for a fun game between local celebrities, former Thunderbirds and some former NHLs. I will be one of the pylons in the all-star game watching the former NHLs skate circles around me.

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City of Seattle RFP for KeyArena gets released

Key Arena RFP

There was a swirl of NHL/NBA Seattle news this week when the City of Seattle released the much anticipated RFP for the redevelopment of KeyArena. Inside the RFP, the first listed objective is to:
“Provide a world-class civic arena to attract and present music, entertainment, and sports events, potentially including NBA and NHL events, to Seattle and the region.”
Chris Daniels has a lengthy article on the topic with a lot of valuable information.
(Update: Geoff Baker wrote this on 1/16. It offers a different perspective. Instead of attacking the validity of some of the content, just try reading it to get a different point of view.)

Complete Teardown could be an option.

One of the more interesting pieces of the RFP is that the KeyArena structure could qualify

active-arenas-20170115

Key Arena is the oldest active arena in the top 30 metro areas. Blue shading represents period of use for NHL/NBA team.

as an historic structure. If the arena is not determined to be a historical landmark, then responders can submit an alternative plan, which would open up the opportunity for a complete teardown. This would give the winning developer an opportunity to maximize the space, which would probably be more compelling to the leagues.

Compliance with NHL and NBA requirements

In the Development Agreement and Lease Agreement Terms section of the RFP, it is noted that the responses must include “Confirmation that the proposed concept design(s) are intended to comply with NBA and NHL requirements for potential future tenancy” If I am interpreting this clause correctly, I would expect that both leagues would agree that the submitted RFPs would work for each respective leagues.

AEG and Oak View Group expected to respond

Both AEG and the Oak View group, led by former MLSE CEO Tim Leiweke, have confirmed they intend to respond to the RFP and and have said that they can rework the arena to

timliewikeandgb

Oak View Group CEO Tim Leiweke with Gary Bettman

accommodate the NHL. AEG and Oak View Group have deep relationships with the NHL and should be considered very positive players in the pursuit of bringing the NHL and NBA to Seattle. It should be pointed out that neither of them will be owners of the NHL team in Seattle. (AEG owns the Kings and Oak View Group has financial ties to MSG, owners of the New York Rangers.) The leadership team at these organizations are as connected as it gets and could broker deals for would-be tenants at a remodeled KeyArena site.

 

 

My take…

This might go nowhere, but it should be perceived as a positive, since the SoDo arena is limping along and may never get the street vacation required for an arena. If SoDo never happens, we need options and Seattle Center is a much better place than Tukwila (which I think is dead). I do my best to be open minded to alternatives and I have the same concerns as a lot of you: NHL compliance, parking, traffic, etc., but I am not an expert in any of those categories. That said, I’ve been to a lot of arenas that are in denser locations than Lower Queen Anne and if an Arena can work in downtown Manhattan (or Brooklyn), then surely someone can make it work at Seattle Center. Having it all pencil out for all parties might be my biggest question.