Hansen’s ‘Hail Mary’

Yesterday the Hansen Group threw up a ‘Hail Mary’ by sending a letter to the Seattle City Council on a possible redevelopment plan of their own for KeyArena. As I’ve said in KeyArena_SoDoGroupprevious posts, the three main challenges for SoDo is the lack of money, no NHL partner, and political support inside and outside city hall. His potential plan for KeyArena is interesting, but does nothing to address those challenges.

The proposal

The proposal would subdivide KeyArena into 3 separate venues: a 500-seat theater, 3000-seat covered amphitheater and 6200-seat indoor concert venue. If there wasn’t already a viable redevelopment plan to accommodate NHL and NBA team, i.e. OVG’s proposal, I think this would be an interesting proposal. The Hansen Group would not start this Amp_KeyArena_Hansenproject until after a SoDo arena would be completed. Based on the information posted on Hansen’s website, the SoDo arena would still not begin until an NBA or NHL team is procured. Based on a Steve Ballmer interview last spring, he estimates the NBA in Seattle is closer to 10 years away than 5. You add it all up and we would be looking at about 2027 for SoDo to be open at which time I would not expect the NHL to wait for Seattle. The Hansen Group has mentioned they would be willing to work with an NHL partner, but their track record so far tells a different story. Each of the known prospective NHL Seattle partners, Don Levin, Ray Bartozek, and Victor Coleman, have been unable to reach terms with the Hansen Group. By adding this KeyArena component, he just increased the cost of business for any prospective partners.

What does Hansen have to lose?

In short, nothing. Worst case for Hansen is that the situation remains status quo and the city rejects/ignores his proposal and continues to go down the path with an NHL/NBA arena in Seattle Center with OVG. Best case for him is that the city rejects the OVG NHL/NBA solution and gives Hansen 5 more years to wait for the NBA to either expand or relocate a team to Seattle. He will also need to acquire a whale of an NBA partner and if he can’t strike a deal with the economic proposal of both SoDo and KeyArena, he can go back to the City to request a more appealing deal to lure the NBA. By that time, the NHL will have probably expanded to 32 teams somewhere else.

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

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.)
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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.