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.

NHL To Seattle 2016 News in Review

From a league level, we entered the beginning of 2016 with some outstanding questions on the two NHL expansion applications from Quebec and Las Vegas. Meanwhile, locally we were still waiting on the outcome of the final street vacation on the SoDo arena.
January 14th Rumors start to circulate that the falling Canadian Dollar could adversely impact Quebec City’s NHL Expansion bid. In hindsight, this is early foreshadowing that would slowly gain steam as the league got closer to the final expansion announcement.
January 25th Slowly but surely, the final stages of the SoDo Arena street vacation vote start to materialize.
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January 27th Gary Bettman references Seattle as an intriguing NHL market. At this point, the ship had sailed on expansion for this round but encouraging to know that Bettman still acknowledges Seattle as a solid market for an NHL franchise.
February 13th  Reports come out that the KeyArena could be remodeled to accommodate both NHL and NBA. Seattle times begins to push this as a better option than SoDo.
February 22nd In a response to the Seattle Times editorial, council member Tim Burgess sharply response and criticizes the Seattle Times for inaccurate reporting.
March 15th The city council conducts a public hearing on the Sodo Arena Occidental Street Vacation.
March 16th In a small blurb of Elliote Friedmans weekly column, it is revealed that Chris Hansen remains in contact with the NHL. This isn’t a game changer but important to know that communication lines remain open.
April 6th City of Seattle Transportation committee hears final presentation on Occidental Ave street vacation for the SoDo Arena. SeattleArena
April 20th Occidental Ave street vacation vote scheduled for Seattle City Council on May 2nd.
May 2nd The Occidental street vacation fails in full City Council meeting by a vote of 4 to 5. The street vacation would have been the last hurdle to have a shovel ready SoDo arena.
May 4th Theories start to circulate that the failed street vacation might break the implied monopoly the Hansen group had on arena options in the area.
May 23rd After the fallout of the denied Occidental street vacation, I claim the SoDo arena dead. (I hope I am wrong. Even though there has been plenty of activity in SoDo over the second half of 2016, it is still not clear how this street gets approved.)
vegas
June 22nd NHL awards the 31st franchise in league history to the Las Vegas for play to begin in the 2017-18 Season. Quebec City is not awarded a franchise. Under the circumstance this could be the best possible outcome for Seattle (or any other city looking to land an NHL team someday).
August 4th Communications between the Port of Seattle (staunch opponent of arena) and the Seattle Times Editor Frank Blethen reveal that the Times was working on a $290,000 PR campaign story for the Port at the same time the Seattle Times launched an editorial campaign against the SoDo Arena. If you ever wanted to know why the Seattle Times was so against the SoDo Arena, now you know.
September 22nd News reveals the Hansen group continues to accumulate land in Sodo. A strong signal that they have not given up on a SoDo arena.
October 25th Hansen group offers the City of Seattle a 100% private financing arena with more infrastructure invested in the SoDo area. (I still think this is much ado about nothing since without an NBA team the group would not get any financing anyway.)
sea_key_arena_entr
October 27th Seattle Times reveals that the City of Seattle will open up a Request for Proposal for a (major) renovation of KeyArena that could accommodate a potential NBA or NHL team.
October 28th A small blurb in a wrap up article of the week reveals that Victor Coleman is still interested in bringing the NHL to Seattle area.
November 14th In an announcement that will certainly help the PR efforts in SoDo, Seahawks Quarterback Russell Wilson announces that he has joined the Hansen Group to bring the NBA and NHL to Seattle.
November 15th Bettman confirms that the NHL is not looking at Seattle without an arena. A statement that surprised absolutely no one.
November 18th News reveals that current Carolina Hurricanes owner, Peter Karmanos wants to sell the Canes, even if it means relocation. As expected, this report is quickly denied by the league and Hurricanes management. If this ever were to come to fruition, the probable landing spot would be Quebec City. This would maintain a 15 teams in the west and 16 teams in the east.
December 15th The Oak View Group, headed up by industry vet Tim Leiweke, do a PR tour with local media outlets that reveal their intent on the KeyArena RFP process. The group mentions that they are in communications with both the NBA and NHL on their plans. They also reveal that they will not be owners of either an NBA or NHL franchise at KeyArena.

Is Seattle’s SoDo arena dead?

The short answer is ‘Yes, SoDo arena is dead.’

As many of you know by now the Seattle City Council rejected the Occidental Street vacation in the SoDo district. This was largely thought to be the final hurdle in a 4-year process for Chris Hansen to have a shovel-ready arena site just south of Safeco field. SeattleArenaTraditionally, street vacation votes with such a glowing Environmental Impact Statement are seen as formalities. But that was not the case…

City council members that voted against the street vacation claimed the threat to Port of Seattle jobs without any data or explanation on how the arena would impact their jobs. The council members that voted no on the street vacation also claimed that since there is no NBA team in site, that there is no need to vacate the street to Chris Hansen. This is circular logic since we will never get a team if we don’t have a clear path for an arena. The entire vote was just political theater to say ‘no’ and I feel that Councilmember Sawant’s statement was the only ‘no’ vote that was sincere and transparent. As much as I disagree with her vote, I respect her honesty.

When everything was said and done, you have a City Council that refused to approve a street vacation for an Arena that had an overwhelmingly positive Environmental Impact Study in a location has the land and infrastructure to support large events. There is no realistic scenario I can see the city council reversing course on that location. Unless there is some kind of Lord of Light possibility I don’t see, I am declaring the SoDo location dead. Additionally, I am fairly convinced that if the Seattle City Council won’t approve the SoDo site, there is a slim to none chance that they will approve any other site in the City limits.

What’s next?

As crazy as it sounds, the ‘no’ vote could be a blessing for an NHL team coming to Seattle. Chris Hansen has made it clear that he doesn’t want to own an NHL team, but he is open to partnering with a potential NHL owner for a possible NHL first scenario in regards to the arena. There are/were 3 potential ownership groups (Levin, Bartoszek, and Coleman), but none of them have been able to reach terms. Without the prospects of an NBA team coming to Seattle anytime soon, an NHL owner would be at the mercy of the NBA PopulationMapsexpansion/relocation plans. With the SoDo arena plans dead, this could enabled other potential NHL ownership groups and local municipalities to come up with alternative plans. If you recall, last summer there were 4 potential NHL expansion application requests from the Seattle area. It is possible that one or more of those groups have been waiting to see how the Sodo arena plans played out to determine their next move?

I went on Q13 a couple weeks ago to discuss options and scenarios for an NHL first scenario outside Sodo. Additionally, Art Theil wrote a similar perspective on sportspressNW.

NHL Expansion Process

It is true that no Seattle group submitted an expansion application last June and that Bettman has been consistent in his messaging that Seattle will not be part of this expansion process. It is unclear how Seattle could get back in the discussion. The NHL is expected to announce expansion to Las Vegas and Las Vegas only which would create a league of 31 teams, 16 in the Eastern conference and 15 in the Western conference. This would give Seattle (or any other city) time to get their collective…stuff together for an arena plan and apply to the NHL to be that 32nd team. Wishful thinking, maybe but certainly a possibility.

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.

2015 NHL to Seattle Report Card

I am giving out grades for 2015 and it is not pretty. I am optimistic on Seattle getting an NHL team but we have work to do.

Last year at this time the outlook for a potential NHL franchise in Seattle was looking promising. The NHL approved Las Vegas to begin a Season Ticket drive. And the Sodo arena process was expected to wrap up during the first part of the year.

Owner:

At the start of 2015, Victor Coleman was the only known prospective NHL owner for a Seattle franchise with a likely partnership with Chris Hansen’s Sodo project. The optimists were convinced that Hansen and Coleman were working on an agreement and the moment the NHL decides to expand, they would go public with their plan. As the year would go on,raybartoszek-300x285 two additional ownership groups would emerge. In the first quarter of 2015, Ray Bartoszek would reemerge as a potential NHL owner in Seattle but it would not be at the Sodo location. Instead, his focus was on the Tukwila location. Shortly after the Bartoszek group news, another interested group in team ownership in Bellevue headed by Jac Sperling was reportedly looking to build an arena in Bellevue. The NHL season would go on with very few details or public comments from any of the 3 reported ownership groups. In mid-June, just after the Season concluded, the NHL would formally announce that they would enter an expansion process. It was reported that 4 groups from the Seattle area requested an NHL Expansion application. It was assumed that 3 of the 4 would be Coleman, Bartozek, and Sperling. The 4th ownership group would never be identified. The NHL Expansion Application deadline came and went with exactly zero application submissions from the Seattle area. The Sperling group disappeared or more accurately never really fully appeared. In spite of missing the NHL expansion deadline, both Bartoszek and Coleman pledged their commitment to bring a team to the area. Neither group was very publicly transparent in their progress throughout the year. Towards the end of 2015, the prospects of a Bartoszek group and Tukwila location coming together start to fade with a report that a major investor walkedColemanVictor8475_sb10_750 away on the Tukwila plan. This would end 2015 just like we started. All hope lives and dies with Victor Coleman, who we can only hope remains convicted on his plans to bring an NHL team to Seattle.

Grade: I (for incomplete) It remains unclear on the progress and potential of any of these ownership groups. The optimists says, there is no need for Coleman to reveal his progress and he will emerge when he needs to come public. The pessimists says the silence is defining…this project is dead.

Arena:

2015 was supposed to be the year the Sodo Arena ran through all their final approvals, studies and the “Seattle process”. Early in the year, Seattle Mayor Ed Murray would renew his support for the Sodo arena. He would make a visit to New York to meet with Gary Bettman and Adam Silver to give an update on Sodo and pledge support to bring an NHL and/or NBA team to Seattle. Meanwhile, high-level arena proposals would be reported for Tukwila and Bellevue. These new arenas would be noticeably behind in the approval process compared to the Seattle arena, but both Populationmunicipalities have a quicker approval process, thus giving both locations have a legitimate chance at competing with Sodo. Noticeable progress would be made on the Tukwila option which would start to emerge as a front runner to be the future home of a NHL franchise. Similar to Bellevue ownership group, details on the Bellevue arena option would never emerge. The thought of a Bellevue Arena had Eastsiders salivating and could have been the best unicorn that ever unicorned in this storyline. By year’s end, the Tukwila arena progress would slow and appears to be dying a slow death.

On the Sodo front, the final Environmental Impact Study was published with glowing reviews of public benefit and no material impact to port traffic. The Port of Seattle would continue their anti-Arena campaigning without any supporting evidence. Sodo would obtain necessary approvals from the Design Commission and Mayor Murray would end the year by sending the project to the Seattle City Council for final approval of vacating a side street necessary for the Arena. Although the final approval of the Sodo arena took much longer than expected, it appears it is on the final approach. Once it clears this final political hurdle, unfortunately, the path to build remains muddy without the prospects of either an NBA or NHL team.

Grade: D  I respect all the work that was done by Hansen and Bartoszek but like the ownership group, we start 2016 exactly how we started 2015. With a reported 3 different options you would have expected at least one to emerge to be shovel ready or at least have a clear path to completion. It is still not clear how Sodo gets done without an NBA Team coming first and an NBA team seems over 5 years away.

Team:

The third pillar to getting a NHL team is actually landing a team. This can be done either through relocation or expansion. People that know me or have followed me long enough know that I have never been a fan of relocation. I believe in this sport too much to concede a market due to an ownership setback or poor performance on the ice. That said, it would be a disservice to ignore the potential of relocation.

Relocation – Entering the year, the public perception was that the Coyotes and the Panthers were potential relocation targets. The Coyotes were mid-way through their second year of 10 year agreement (with an out clause 200px-Phoenix_Coyotes.svgafter 5 years). Meanwhile, the Florida Panthers were in the middle of their first full season with their new ownership group headed by Vincent Viola. The Coyotes were making progress on their turnaround, but struggles on the ice would make things tougher to hit the forecasted revenues that would be paid back to the City of Glendale. Although not directly tied to the Glendale revenue shortcomings, the City would cancel their 10-year agreement with the Arizona Coyotes leaving the future of the team in limbo. The city and team would eventually sign a 2 year agreement that would enable the team to continue playing at Gila River Casino Arena. Where the team plays after that remains unclear, but odds are they stay in the desert and play in a new arena in either Scottsdale or downtown Phoenix. Back to Florida, the Panthers ownership group remained committed to staying in South Florida. The group began seeing improvements in attendance and remained committed to building a solid team on the ice. Separately, the Panthers negotiated a new agreement with Broward County that would keep the Panthers in Florida through 2028. The year would end with neither team looking like relocation candidates for the immediate term.

 Expansion – They NHL would formally launch an expansion process over the summer. As noted above, the deadline would come and go without a potential Seattle area ownership group applying for expansion. This was the opportunity Seattle was waiting for and by all intents and purposes, ready for. The awarding of expansion franchises has been slower than the public (aka media) expected, leaving some folks to speculate that the NHL is waiting for a group in Seattle to develop a legitimate plan. This seems like a little bit of wishful thinking, but the longer the NHL drags out its decision on expansion, the more opportunity it gives Seattle to get their arena and ownership ducks in a row.

Grade: B+  There are teams (via expansion) available. Has the door shut on Seattle for one of those teams? Maybe, but time will tell.

Community

The NHL to Seattle community had a great year. This scrappy grassroots community continues to evolve, which surprises me every year. We received check-ins from several rinks across the league (and world). The final 20151012bcommunity practically demanded t-shirts and I’ve had to reorder multiple times and have expanded “product lines” based on community interest. We had our first annual playoff viewing party, expanded our opening day challenge, and had our first holiday party.

Grade: A+  I may be biased here, but seeing how this community has grown and evolved since 2012, there is no other grade possible.

We had some rather big expectations but this is tremendously complex. A lot of work has been done to get us to this point and without a viable arena plan, the path to landing a franchise remains unclear. I remain optimistic but I also don’t want people assuming this is going to happen anytime soon. This community has been outstanding and we need to continue to grow to make our voices heard to local politicians, the NHL, and potential owners.

How Tukwila Stacks Up

Full disclosure: This is somewhat recycled content but wanted to update some of the maps I have done with the news from yesterday.

Population

As most of you know, the bulk of the population is located in Seattle and the East Side (Bellevue, Kirkland, Redmond, Sammamish). The Tukwila site is roughly equal distance for the two locations. One clear advantage is the ability to tap into the Tacoma market (the third biggest city in Washington State).

Population

Income Levels

Now population does not create a market itself. You need customers that fit the demographic and one of those core components is income. I have already established that NHL fans tend to be wealthier compared to other sports fans.  Similar to an approach I did a few months ago, I overlaid income levels by looking at tax returns by zip code. Below is a map of the # of returns that had an Adjusted Gross Income over $75,000.

income

Travel distance tolerance

As luck would have it, I conducted a survey about a month ago and asked the following question: If Seattle were to get an NHL team, how many miles would you be willing to travel (drive, public transit, etc.) to a game? To my surprise, a majority of respondents said they would travel over 15 miles (red box in dashboard below). Here is the break down by county:

DistanceDistance Proxies

Here are a few of the distances to some of the proxy arenas in the NHL and NBA.

Tukwila Site

  • 11 Miles from downtown Seattle.
  • 14 Miles from downtown Bellevue.
  • 23 Miles from downtown Tacoma.

Canadian Tire Center, home of the Ottawa Senators:

  • 16.6 Miles from downtown Ottawa

St. Paul MN, home of the Minnesota Wild:

  • 12.4 Miles from Minneapolis

The Palace at Auburn Hills, home of the Detroit Pistons:

  • 33 Miles from Detroit

Glendale AZ, home of the Arizona Coyotes:

  • 10 Miles from Phoenix
  • 21 Miles from Scottsdale
  • 27 Miles from Mesa

Sunrise FL, home of the Florida Panthers

  • Sunrise, FL is 31.2 Miles from Miami

On a personal note, I grew up going to Oakland A’s games, a lot of them. The distance we traveled seemed very reasonable. Traffic seemed bad but just something we lived with to go to games. I looked up the distance and it was 20 miles with a good stretch on the parking lot known as I-680. I did not live in San Francisco Area when the Sharks moved to San Jose but occasionally I would be visiting my family while the Sharks were in town and we would catch a game. That distance we would drive was 55 Miles. This just seemed like a normal distance to drive to watch a game.