Seattle will move forward with Oak View Group (OVG)’s plan to redevelop Key Arena. The City Council approved a memorandum of understanding (MOU) between OVG and the city’s Office of Economic Development earlier this week.
The $600 million development will be funded by OVG with private equity, financing from lenders, and tax credits. The city wouldn’t lend OVG any money, and OVG would be responsible for all operations and maintenance costs.
Under its agreement with OVG, the city will retain some revenue from the arena—and OVG would have to reimburse the city if tax revenue fell below current baseline. OVG will also have to pay into a mandatory housing affordability (MHA) fund in exchange for the added square footage.
OVG would enter a 39-year lease with the city, with options for two eight-year extensions.
The company will also have to pay into a transportation fund managed at the city’s discretion to fund transportation improvements around the neighborhood. It will also have to collaborate with the city on a North Downtown Mobility Action Plan to help mitigate traffic issues.
The project was largely spearheaded by former mayor Ed Murray, but his resignation amid sex-abuse allegations hasn’t slowed the project. The agreement was finalized in September, with the City Council signing off less than three months later. Newly minted mayor Jenny Durkan said Tuesday that she will sign the agreement.
The only city councilmember to dissent was Mike O’Brien. He had proposed an amendment—which failed—to axe an exclusivity clause that prevents the city from giving benefits to any other group proposing an arena with 15,000 or more seats.
One group that could be affected: an investor group led by Chris Hansen that has been working on an arena in Sodo for years. Like the Key Arena project, the Sodo arena would be geared toward NBA and NHL teams.
The project became somewhat stalled when the City Council denied a necessary street vacation. The group has since come forward with updated plans; its own MOU with the city just expired over the weekend.
Monday, the Sodo group said in a blog post that it “respect[s] the city council’s decision to approve the Oak View Group MOU,” but it “continue[s] to believe our plan to build a 100 percent privately funded arena in Sodo represents the best chance to bring the NBA back to Seattle.”
The group said it’ll hold onto its Sodo property until an agreement is reached to bring an NBA team to Seattle. “Having two viable arena options puts Seattle in the best position to attract an NBA team,” its blog post read. “If some future NBA ownership group is unable to reach a competitive deal at Seattle Center, having an alternative is vital for the city and Sonics fans.”
- City and Oak View Group reach a plan for Key Arena [CS]
- Uptown rezone passes City Council [CS]
- KeyArena MOU approved by Seattle City Council; will NHL announcement soon follow? [ST]
- Decision day [Sonics Rising]
- Sonics Arena Team on the Seattle City Council’s approval of the Oak View Group MOU [Sonics Arena]