A rendering of OVG's renovated KeyArena, Seattle, which cleared a giant hurdle and received city council approval of its MOU this week.
The Seattle City Council approved the memorandum of understanding (MOU) between the city and Oak View Group (OVG) to renovate KeyArena, Dec.4, by a vote of 7-1, with one absent voter. The new mayor, Jenny Durkin, and OVG Co-Founder and CEO Tim Leiweke, signed the MOU on Dec. 6, pushing the promise of implementation of the $660-million project further toward the finish line. (Full disclosure: OVG also owns Venues Today.)
The revitalization of KeyArena is step one in Seattle attracting a National Basketball Association (NBA) team and a National Hockey League (NHL) team to the city. Seattle’s former NBA team, the Sonics, left for Oklahoma City in 2008.
With the MOU signed, the deal between OVG and the city moves to the next phases, lease agreements, entitlement issues and permitting. Signing of the MOU does not guarantee OVG the right to start construction yet; among other necessary steps are completion of an environmental impact statement, community benefits agreement, and an agreement to integrate with other organizations housed at Seattle Center.
Still, “the city council vote was quite significant,” said Joe Mirabella, director of communications, Seattle office of economic development. “This clears the way for the KeyArena/Oak View Group deal to proceed.”
Mirabella said that with this hurdle overcome, the most likely outcome is the completion of the arena. “There’s very little in the way now that would derail the venue being built,” he said. “The next steps are mostly filling in the blanks and a lot of paperwork and filings like settling a lease agreement, going through the entitlement process, and putting all the permits in place.”
Mirabella believes this will take anywhere from six to eight months to accomplish. “Barring a 9.5 earthquake or one of the other worst-case-scenario stipulations in the MOU, the path from here is not perilous and we fully expect OVG will break ground in October 2018 and the new KeyArena will open its doors in Fall 2020.”
“On behalf of OVG, we want to thank the Seattle City Council, City staff, and City consultants and representatives for the cumulative work that signifies a monumental moment with today’s 7-1 vote,” said Leiweke in a statement. “We feel extremely good about the partnership between the City of Seattle and OVG and respect and applaud the City in its ability to be thoughtful, collaborative, and deal-focused throughout this process while maintaining the best interest of its citizens.
“The process over the last year serves as an example of the transparent public/private collaboration that has led to a great outcome that other municipalities will emulate,” he said. “We have enjoyed getting to know our neighbors in Seattle Center, Uptown, South Lake Union, Belltown and Queen Anne. We look forward to continuing our work with the community over the next year as we complete our long form agreements and full entitlement. We will continue to be good partners and good neighbors and look forward to a collaborative and beneficial ongoing relationship will all community stakeholders.”
Mirabella said the deal was “great for the city of Seattle. Since the money to rebuild the arena is private money, with provisions for the city to revenue-share, it’s a win/win. The city gets to keep its promise that we are not moving backward and the renovated arena will surely have a huge, positive economic impact on the entire city.”
Under the agreement, Oak View Group will lease the arena from the city for 39 years. Further extensions are in place if OVG can land a NHL or NBA team, both of which are likely given OVG’s deep ties to the sporting world. OVG bringing more capital to the project will also kick in extensions.
Part of the MOU will see OVG contribute $40 million over its 39-year lease to a transportation fund to alleviate traffic congestion in the area, a pledge to retain some of the current staff, and construction of a skatepark.
In other Seattle venue news, Seattle Opera has unveiled plans for a $60-million facility to replace Mercer Arena, which was demolished last February.
The new building, which will be named the Seattle Opera at the Center, is expected to be four stories tall and house 105,000 sq.-ft. of space for offices, storage, scene assembly and community spaces.
A rendering of the new four-story Seattle Opera at the Center. building.
One of the goals of the project is to create "a signature building that unlocks opera for all," said Seattle Opera General Director Aiden Lang. “Education and engagement are at the heart of Seattle Opera's mission.”
The opera is using about $14 million in public grants for the project with the rest of the money coming from private donations.
NBBJ is the architect on the project, Lease Crutcher Lewis is the general contractor and Shiels Obletz Johnsen is the project manager. Construction began in January 2017 and Seattle Opera at the Center is expected to move into their new home in 2019.