Seattle City Council approves KeyArena redevelopment memorandum of understanding

NHL


Seattle’s chance to land a National Hockey League franchise improved greatly on Monday, when the Seattle City Council overwhelmingly approved a memorandum of understanding for the $660 million, privately financed redevelopment of KeyArena.

The council vote was 7-1.

The Oak View Group was given the MOU months after unveiling plans to dramatically redevelop KeyArena, which opened its doors in 1962, and improve transportation around it. Currently, the WNBA’s Seattle Storm call KeyArena home. It previously was home to the NBA’s Seattle SuperSonics, who relocated to Oklahoma City to become the Thunder in 2008.

The ambitious timeline laid out by Oak View would have the building ready by October 2020, if it obtains the necessary environmental approvals by October 2018.

The CEO of Oak View is Tim Leiweke, who was the CEO of arena operations giant AEG — which runs Staples Center in Los Angeles — and later became the CEO of Maple Leaf Sports Entertainment. He’s an executive with an open line to both NBA commissioner Adam Silver and NHL commissioner Gary Bettman.

A timeline for an NBA or NHL team coming to Seattle remains uncertain. Council President Bruce Harrell, Seattle Council District 2, noted that the NBA could look to expand in 2022, when there’s an opt-out in its collective bargaining agreement.

As for the NHL, Bettman has said the NHL is “not in an expansion process” as recently as last month. But he has supported the arena renovation and has acknowledged that billionaire investment banker David Bonderman, part of the Oak View effort, has expressed interest in owning an NHL franchise.

The NHL has acknowledged that Seattle is a desirable market for pro hockey. “I think we have a belief in the Pacific Northwest. It’s good hockey territory. It’s kind of more obvious than some of the other areas,” deputy commissioner Bill Daly told The Seattle Times in 2014.

In addition to creating a natural geographic rivalry with the Vancouver Canucks, if Seattle were awarded an expansion team, it would balance the league’s Eastern and Western conferences with 16 teams apiece.

The Seattle arena saga has played out over several years.

Hedge fund billionaire Chris Hansen, who grew up in Seattle, signed a memorandum of understanding with the Seattle City Council in September 2012 to build a new arena in the city’s SoDo District. As part of that deal, he needed to secure an NBA team tenant for the building in order to get $200 million in public bond funding.

Hansen attempted to purchase and relocate the Sacramento Kings in 2013, but his deal with the Maloof family was rejected by the NBA Board of Governors.

In 2015, the NHL opened the bidding for an expansion franchise. Due to the uncertainty of the Seattle arena situation, there was no ownership group willing to meet the $500 million price tag for a team. Only Las Vegas and Quebec City submitted bids, with Vegas gaining approval for what is now the Golden Knights.

In May 2016, Hansen’s arena plans were dealt a fatal blow when the Seattle City Council voted 5-4 to reject a $20 million bid from Hansen to buy part of Occidental Avenue South that was critical to the arena site, with voters citing its viability to port operations.

Almost a year later, there was an unexpected development: KeyArena, an afterthought in this process, was targeted for redevelopment by the city. Oak View Group won the bid with a $564 million proposal to revamp the venue for concerts and for potential NBA and NHL teams. The group proposed a formal MOU to the city in September.

“It sends a very strong message now to the NBA and to the NHL that everyone worried about, ‘Yeah, will it ever get done with the city? Will they ever be able to get to the finish line? Will you ever possibly get this deal done within the politics of Seattle and the Seattle process, as everyone likes to call it?” Leiweke said at the time. “Guess what? Game, set and match. We clearly send a message to everyone that this will get done, this will get built, and we are ready now to go get one and, hopefully soon, two teams.”

There are various differences between the KeyArena renovation effort and Hansen’s previous effort, including Hansen’s facing much more pushback from various forces within the city than Oak View has. Hansen’s original MOU was predicated on bringing in an NBA team first, while this one has no such clause. But the starkest difference is that the KeyArena plan is privately financed, while Hansen vowed to go all private only after the city council’s crushing vote against his land acquisition. Essentially, Oak View gets a sweetheart deal on the land in exchange for private redevelopment.

But there’s another difference: the influence of Leiweke and the presence of both Bonderman and movie producer Jerry Bruckheimer among potential team owners.

The NHL has a simple test for expansion or relocation: Is the market one that benefits the NHL, does the market have a suitable arena, and is there a viable ownership group that wants to acquire a team?

With this KeyArena deal, the answers across the board are “yes,” and Seattle is closer than ever to landing an NHL team.



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