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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Sodo opponents still lack facts

Since the very beginning of the Seattle Arena plan, the most vocal opponents have been the Port of Seattle and Seattle Mariners.  In the 3 years I have been following the story, they have never produced one piece of data or evidence that the Stadium district cannot sustain a pro sports arena.

Port of Seattle

The port claims that the street vacation will negatively affect the flow of traffic for shipments in and out of terminal 46. In the 3 years of their opposition, we have never seen any data to support their claims of rhetoric and objections.

Here are some ideas we should be asking the port:

  • What does the seasonality look like of your container traffic at terminal allegedly impacted by the street vacation?
  • What does daily traffic flow look like by hour?
  • How long does it take to get a container off a boat? how long does it take to get loaded on a truck? How does this compare to the potential traffic caused by vacating Occidental Ave?
  • How long does it take a loaded truck to get in and out of the port, once inside? How far is the typical distance a truck takes the container once outside the port? How long does that take?
  • How does the port function during the 81 Mariner games a year?

The Mariners

The Mariners opposition is disheartening to say the least. Obviously the NBA and NHL play opposite of baseball season and the overlap can be mitigated like it is done in Philadelphia where all 4 teams play in one location. Additionally, the Mariners average sodosports comps50% higher than projected arena attendance than the Sodo Arena so it is illogical to think that a Mariner game of 30,000 can work in Sodo but a basketball or hockey game of 17,000 would impact the Port. The reality is the Mariners are scared. They’ve had continued sliding attendance and realize that another sports team in town could and should be considered a competitive threat to their marginal product.

SonicsArena Group

In the meantime, the SonicsArena group has gone in front of countless city council and committee meetings, gone through a 2 year Environmental Impact Study with public transparency through the entire process. The results of the study have concluded that the Sodo Arena will have no material impact on the Port that is supported by data.

The homestretch for the Sodo Arena

I will cut to the chase really quickly. The SoDo Arena project has one last hurdle to be shovel ready. Here are two things you can do to help out:

  1. Sign the SonicsArena petition.
  2. Show up to the Seattle City Council public hearing on the Street Vacation at Occidental on March 15th.

For a little more narrative…keep reading.

The Seattle Arena project in SoDo that was kicked off around December of 2011 is closing in on the final steps for approval. The only remaining obstacle is a city council vote on a street vacation of a stretch of Occidental just south of Safeco field. The city council vote is being projected on an estimated date of April 24th with an important public hearing on March 15th.  The street vacation was part of the 2-year Environmental Impact Study (EIS) that found no major findings that would stand in the way of arena construction. The streetSeattleArena vacation has already received recommendations / approvals from the Seattle Design Commission, Downtown Design Review Board, Seattle Department of Transportation, and the Mayor as part of the normal process with the City Council vote. It is seen as the last step before filing for a Master Use Permit to begin construction. Sonics Rising published an great article on what being shovel ready means to the leagues.

The Port of Seattle and the Mariners claim that vacating that block will have a big impact on traffic. I ventured down there to snap some photos over the course of a couple days of all the traffic on that street that will be diverted elsewhere.

 

As you can see, there is not much, if any, traffic that will be impacted, but you should not take a post of phone pictures as proof there is no traffic. You should take the word of a 600+ page Final Environmental Impact study that took close to 2 years that says with some mitigations that there will be minimal economic impact.

NHL impacts

Even though the SoDo arena is being driven by an NBA group led by Chris Hansen, that group has maintained a desire to house an NHL team, as well. Over a year ago, it was reported that Victor Coleman is the potential NHL franchise owner that was looking to partner with Hansen. Coleman has remained quiet on his intentions and dealings with Hansen. Less than 30 days ago he pretty much said no comment to a Business Journal interview on the status of his desire to bring an NHL team to Seattle, but it is clear he has not abandoned the efforts. There has been some speculation that Coleman is waiting for the final vote before going public with his intentions of reaching a deal with Chris Hansen. This might be a little wishful thinking, but we should find out soon.

The bottom line is that the only way Seattle gets a team is if they have a solid arena plan. The Sodo site remains the furthest arena project along and the only one that appears to be moving forward.

 MOU and an NHL first scenario

As many of you are aware, the current Memorandum of Understanding calls for an NBA team before any of the $120M in city bond funding will kick in. What that means in a case of an NHL first scenario is still an open question. It could mean that under the current MOU, an NHL first scenario the arena would need to be entirely privately financed. It could also mean that the MOU would need to be amended to accommodate an NHL first scenario. I am certain the players involved certainly know the steps required to start building and are keeping the matter quiet until we get passed the street vacation vote.

Seattle is not part of the expansion process..but we knew that already

In Gary Bettman’s annual state of the league address he said in no uncertain terms that Seattle will not be getting a team in the current expansion process. This was known and bettman_gary640the league message has been consistent from the very  beginning. This expansion process is about Quebec and Las Vegas, not Seattle. There have been several stories that bubble up from time to time that speculate that the league is dragging its feet on expansion while waiting on Seattle, but every time a story comes up the league denies it.

If you are with me and rooting for a team in Seattle, then our hope would be that the NHL chooses to expand by one team in this round of expansion, which would open the door for another team down the road. Several media outlets are “predicting” (aka speculating) that the scenario could play out with Las Vegas landing a franchise and Quebec City being left out in the cold as a relocation option. The Canadian Dollar is just too weak for an expansion team in Quebec City. It wasn’t too long ago when the NHL was assisting all Canadian teams outside of Montreal and Toronto.

What does this all mean for Seattle? Not much. Nothing has materially changed since the 3 potential ownership groups in Seattle missed the NHL expansion application deadline last July. It appears that there are still groups trying to get an NHL team in Seattle, but we’ve heard very little from any of the camps, so it is not clear if any option will emerge anytime soon.

Bettman’s comments yesterday have changed nothing since Seattle missed the deadline and was consistent with the grades I handed out for the year. I know this will be a great market for the NHL and I am optimistic that the Greater Seattle Area will land an NHL screen-shot-2015-06-03-at-91053-amteam eventually. The biggest hurdle to landing a team has always been an arena. Without a clear arena solution in either SoDo, Tukwila, Bellevue, or who knows where else, this remains the major blocker for even the optimist in me. This news cycle can be brutal on us at times, but NHL-to-Seattle remains committed for the long haul and is not going away anytime soon. We continue to provide fair and balanced assessments of our situation as the NHL-to-Seattle community continues to grow and thrive.

Seattle needs a new Arena

Over the weekend, CBS Sports ran an article titled “Seattle City council wants to pull public funds from proposed arena”. In there was a quote from Tim Burgess.

“This deal’s just not doable, at least as it’s constructed today,” says Tim Burgess, the president of the Seattle City Council. “I wouldn’t say it’s dead. But we are not going to go ahead with this arena without substantial changes. And there are no plans right now for those.”

As far as I remember, Burgess has been consistent in this issue, the economics of the MOU need to change to accommodate an NHL first scenario. He has never got into specifics because there are several economic levers to pull to restructure the deal. It could be higher rent, higher surcharges or more guarantees/assurances.

This got me thinking….independent of NBA and NHL, does Seattle really need a new arena. I took a look across the Top 50 Metropolitan Statistical Arenas to determine how Seattle stacks up with other Metro areas and their arenas.

I first isolated the most modern arena equipped to handle major concerts and sporting events that had a capacity over 10,000 within each metro area. For example, for the New York Area, I selected the most modern arena of the 4 in the area, so Barclays Center in Brooklyn. The results may not surprise you.

Most Modern Arenas

MostModern

The data shows that with exception of Virginia Beach and Richmond Virginia that do not have an arena, Seattle has the oldest primary arena. Maybe the City of Seattle needs the arena more than they are letting on?

For the heck of it, here is a list of all main arenas in the top 30 markets.

Top30

The FEIS and what’s next

Seattle Mayor Ed Murray

Seattle Mayor Ed Murray

As scheduled, the Final Environmental Impact Statement on the Seattle Arena was released Thursday morning and as expected, the results were favorable.

This news is being picked up everywhere but the most thorough article came locally from Chris Daniels and Geoff Baker.

Chris Daniel’s Article here.

Geoff Baker’s article is here.

The Puget Sound Business Journal also had a good summary piece on the economics.

Here are some highlighted tweets of the coverage:

Sonics Arena Statement

Within a couple hours of the FEIS being released, the SonicsArena camp released a statement. There was an entire HockeyView_SonicLevel3paragraph on an NHL first scenario.

We also wanted to take the opportunity to reiterate that we remain 100% supportive of the NHL returning to Seattle and playing in the Arena — and are completely open to the prospect of that occurring prior to the NBA. In light of recent speculation, we would just like to clarify that we have sought to be as accommodating as possible in our negotiations with potential NHL partners, with our only major requirements being that such a deal does not jeopardize the process or put the City, County, Taxpayers or us in a worse financial position.

This is consistent with the Hansen camp’s position from the very beginning. In an interview late 2012 with King 5, Hansen said that an NHL first scenario would be possible in the right scenario. At the time, NBA expansion or relocation looked like more of a possibility which made the scenario less likely. Comments from Victor Coleman last week have muddied the waters a bit so it is great to see the Hansen group affirm their position.

Port of Seattle Opposition

Consistent with the ports messaging throughout this entire process. They released this statement on their opposition to the Arena and the EIS findings. In my three plus years of following this project, the Port has never provided any data on the impacts of the Arena to their business and have never appeared to be collaborative in this project. We should expect more and more of this type of PR from the port.

What is next?

Now that the Final EIS hurdle has been cleared, a couple things will start to play out. For an NHL first scenario, a prospective NHL owner will need to strike a deal with the Hansen group. Once that happens, the Hansen group will need to take a proposal to the Mayor to change the current MOU to be an NHL first scenario. This will more than likely need to happen in PopulationAugust so that the Mayor can bring it to the city council for vote in September.

In the meantime, the NHL has two key Board of Governors meetings, one before the NHL Draft in June and another in September. As reported last week, it appears they will “vote” on expansion in September. Since the news did not come from the league, it is up to us to define “vote”. Most people interpret this “vote” as to start the application process and not necessarily, awarding the franchise.

Meanwhile, the Tukwila arena proposal moves forward and should be considered a major competitor to the SoDo Arena regardless if there is movement on the NHL first scenario in Sodo.

As I tell most people, this is a rollercoaster, try not to get too high or too low on any news. So let’s celebrate the victory but do not assume this thing is a done deal. Lots and lots of work still remain.

Bettman talks a little expansion in NYC presser

bettman_gary640I caught a bunch of comments on twitter from Gary Bettman’s press conference this morning in NYC. He talked quite a bit about Expansion and Seattle so I wanted to share for the folks that might not be on twitter or may have missed it. There could be some follow up articles on some of these points but for now I am going to embed some of the tweets of the coverage and give some commentary where necessary.

Expansion and Vegas

Nothing really new other than Bettman confirming what we heard from Scott Burnside earlier this week. If you want to take the Seattle optimist view, you can hope that Seattle is part of the “pursue it” conversation since Bettman has said that a ticket drive was not necessary in Seattle or Quebec.

Seattle Specifics

This is the most direct comment I have ever read or heard from Bettman on the opportunity for NHL in Seattle. We have known the NHL has wanted to be here but Bettman usually phrases things with “There is some interest…” or “we haven’t studied the market”.  It might not seem like much but this is progress.

Very consistent with what we have heard from Geoff Baker, Chris Daniels, the Mayor and the limited comments we have heard from the NHL. Hearing it all wrapped up together from the NHL is dare I say, encouraging. There are a couple things that can fall into place over the next 2 months. The Final Environmental Impact Study of the SoDo Arena due on May 7th. If Victor Coleman is still the NHL front man in that deal, we should expect to some of those details to emerge on getting the financing for an NHL first scenario. Additionally, the Tukwila (or Bellevue) plan could emerge to compete with the SoDo plan. SoDo still has some hurdles so whether it is a competing plan or a backup plan, I am all for it.

Get ready for a wild 60 days.