The city’s Office of Economic Development (OED) announced Tuesday that has reached an agreement with Oak View Group (OVG), the private developer selected to overhaul Key Arena to attract NBA and NHL teams.
The memorandum of understanding (MOU) reached between OED and OVG are similar to the initial plans submitted by OVG: The project would double the size of the Key and preserve the arena’s historic roof.
The agreement estimates the project cost at $600 million, a little higher than initial estimates, 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.
The city would retain some revenue from the arena—and OVG would have to reimburse the city if tax revenue fell below current baseline. They’d also have to pay into a mandatory housing affordability 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.
As part of that lease, OVG would have to pay into a transportation fund managed at the city’s discretion to fund transportation improvements around the neighborhood. They’d also have to collaborate with the city on a North Downtown Mobility Action Plan to help mitigate traffic issues.
The MOU still needs to be approved by the city council. They’ll be discussing the agreement during their next arena committee meeting Monday, September 18 at about 10:30 a.m.
If it’s approved by December 4, construction could begin in about a year, with the new stadium opening in October 2020.
As PSBJ points out, having an MOU doesn’t necessarily mean the project will move forward—the city also had an MOU with a SoDo Arena group before the city council rejected a necessary street vacation. The group has since submitted a new proposal, which is also being considered by the city council’s arena committee.
Meanwhile, the group behind that SoDo Arena project, led by Chris Hansen, released their own plan for Key Arena last week to complement their project near Seattle’s other stadiums. In that proposal, the Key would be converted into two mid-size concert venues and a 500-seat theater.
The SoDo group would cover all financing and cost overruns for that proposal in addition to the proposed SoDo arena.
In response, OED released a statement saying that the group should have submitted their idea during the RFP process, “which would have shown a willingness to work with the city on this project,” adding that the group “continue[s] to show no interest in working in partnership with the city.”
- Seattle Center Arena MOU [Seattle.gov]
- Oak View Group officially selected to renovate KeyArena [CS]
- Two proposals submitted for KeyArena redevelopment [CS]
- As KeyArena plans move forward, Chris Hansen committed to SODO stadium [CS]
- A Proposal to Redevelop KeyArena [Sonics Arena]
- Seattle and private developer outline $660 million plan to redevelop KeyArena [PSBJ]