SoDo is Dead

I know there are a lot of folks that wanted to see the SoDo site be the location of Seattle’s arena to host NHL and NBA teams, but the door seems to have been closed indefinitely as the City of Seattle shared that they will not be re-voting on the Occidental Street Vacation that the Hansen would need to build their arena in SoDo.SeattleArena

I have said SoDo is dead before and nothing has really changed my mind since I originally posted in May of 2016. That post was before KeyArena was brought up as an option. It was clear to me that the current City Council decided that SoDo is not where they wanted another sports facility to be built. Since that post, nothing has materially changed. Hansen offered to forego his $130M in public financing for the street vacation, but that was much ado about nothing. It didn’t go over well, but I chalked this up as “no news” news. The financing has always been tied to Hansen procuring an NBA team and since the NBA has made it clear that they were not expanding before the MOU was set to expire, the financing was a non-issue.

The reasons for the unwillingness for the city to revisit the street vacation could be any combination of the following reasons:

  1. No money. When Ballmer left the group that eliminated Hansen’s majority owner/partner. Hansen could have addressed this, but, for whatever reason, hasn’t added any investors to his group. Now it is relatively impossible to replace a significant partner, like Ballmer, with over a billion in net worth. As far as I can tell, the City doesn’t grant street vacation on speculation that a company, organization or individual can attract more investors. The city expects to see all the financing in order before a street is vacated.
  2. No NHL partner. It’s no secret that the NHL is ready to expand before the NBA. Many sources have made that clear. Over a year ago, Hansen’s partner, Wally Walker confirmed that the Hansen group has continued to talk to prospective NHL owners but in 6+ years, they have not been able to bring any of them on board.
  3. Politics. Yep, flat out politics. It is easy to blame the Port of Seattle, since they were the most vocal opponent over the last 5 years. The Mariners & Seahawks were also quiet opponents of the SoDo arena plans. Those are 3 powerful groups that are difficult to overcome.
  4. Relationship with the NBA. For years there have been rumors & reports that Hansen’s relationship with the NBA has some challenges. The city has acknowledged that they have been in communication with both the NBA and NHL during the KeyArena RFP process to make sure it is viable. If this relationship issue did exist, it is certainly conceivable that the NBA would have confirmed it to the City of Seattle during these conversations.
  5. KeyArena has become viable. At the time of the Occidental Street Vacation vote, KeyArena was not really talked about as a viable option to host the NBA and NHL. outsideSince then, the City issued an RFP and got two responses to redevelop KeyArena from two power houses in the industry that have deep ties to the NBA and NHL, AEG and OVG. Both RFP responses confirmed that KeyArena could be redeveloped into a building to support NHL and NBA. The city confirmed that the Mayor’s Office were in communication with both leagues on the viability of the proposals.

KeyArena or Bust

The demise of SoDo leaves only one option for an NHL/NBA arena, a revamped KeyArena. NBA aside and focusing on the NHL, with the addition of Vegas this year, the NHL is set at 31 teams with 15 teams in the west and 16 in the east. This would imply 1 additional opening for an expansion franchise. The league will not wait for Seattle forever, especially with interest starting to percolate in Houston and Kansas City, both of which could plug and play fairly easily in the western conference and already have existing arenas. With no other options in the Seattle area, it looks like KeyArena is our only hope to see the NHL here anytime soon. There are certainly other scenarios that could play out, but it feels like our window of opportunity is now, otherwise we might be waiting a long time for an NHL team.

inside-Hockey

A couple podcasts and YouTube video

Just a quick note that I made appearances on a couple podcast over the last two weeks to talk hockey and arenas. If you are like me and itching for any and all hockey news out of Seattle, this might help fill the void because things are pretty quiet right now.

Hockey talk in Seattle

The first podcast was on Chris Cashman and Chris Daniels “The Next Best Podcast”.

The second podcast was segment of a longer podcast on the Seattle Growth Podcast.

If you like local podcasts, you should definitely subscribe to both of them.

Hockey history in Seattle

A friend sent me this video that has a lot of archived footage and information on the history of pro hockey in Seattle. Very cool and gets me pretty pumped up to see the NHL come here.

Seattle Partners pull out of KeyArena bid process

Seattle Partners, a partnership between AEG and Hudson Pacific, announced in a formal letter to the City of Seattle that they would be pulling out of the KeyArena remodel process. On the surface, it appeared to be a surprise, but to those of us that have been following the story for a while know that AEG was on the cusp of losing the bid anyway. They could have bowed out gracefully, but they decided to take a scorched earth approach to announcing their exit.

The mayor responded to the letter with a statement of his own:

Ed Murray

Seattle Mayor Ed Murray

“It is unfortunate Seattle Partners chose to pull their proposal. As recently as May 19th, Seattle Partners stated in a mass email: ‘We applaud the City for executing a thoughtful public process. Engaging with teams from the City and the public has strengthened our proposal and crystallized our approach.’ We hope to continue our current relationship with AEG and look forward to addressing our path forward on KeyArena, as well as our commitment to engage the community, in the coming days.”

 

And then there was one…at KeyArena

That leaves OVG as the remaining bidder on the KeyArena remodel. It has been rumored that we were going to hear an announcement as early as this week. John Shannon from Sportsnet tweeted that OVG would be in town on Monday (the 5th).

Sodo and KeyArena

Assuming OVG can strike a deal with the City, this will now set the stage for a SoDo/KeyArena showdown that should really be interesting. There are so many differentoutside dynamics at play here; it is impossible to predict. Ultimately, I believe it will come down to the following questions:

Who has the money to build the arena? As part of the KeyArena RFP process, OVG needed to demonstrate the financial means to deliver on the project. Meanwhile, the Hansen group has not revealed how they are financially structured since Ballmer left the group.

Which arena group has support of the leagues? There has been a lot of speculation that Hansen does not have the support of the NBA, but that has never been confirmed by the NBA. Time heals all wounds, so if this really is an issue, it could be fixed. OVG’s CEO, Tim Leiweke has deep ties to both the NBA and NHL, so his relationships seem solid. That said, I expect the City of Seattle to be in contact with both leagues to confirm either or both potential arena partners have the support from both leagues.

Who has a potential NHL ownership group? Both groups have acknowledged that they are talking to potential NHL ownership groups and for all we know, they could be talking to the same groups. Maybe a bigger question is how much this needs to be solidified to decide SoDo vs. KeyArena.SeattleArena

Has Hansen done enough to alter the vote on a street vacation? Since the street vacation vote was denied by the city council last year, Hansen has announced his intent to pull the need for public financing. In my eyes, that is a moot point since the public financing was always tied to procuring an NBA franchise, which was not going to happen before the MOU expires in December.

How this all plays out is anyone’s guess, but it certainly feels like we are closer to getting a viable arena plan that can support an NBA and NHL team. Take that last sentence with a grain of salt, since I’ve said that before.

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.

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.