NBA doesn’t need huge stadiums anymore, KeyArena developer says

Dec 13, 2016, 2:07 PM | Updated: Dec 14, 2016, 8:34 am
arena options, Murray, KeyArena, housing, affordable housing, homeless, Seattle mayor...
The mayor of Seattle is expected to announce his decision on an arena plan Wednesday. (AP)

There’s a lot of star power behind the push for bringing the NBA and NHL to a new arena in SoDo, but the newest player in the battle to renovate KeyArena instead told KIRO Radio’s Dori Monson that there’s still plenty of attraction to investing in KeyArena and Seattle Center.

“We’re not going to focus on what others are doing because we think we’ve got an exciting project on our own,” said Lance Lopes, the Oak View group’s new director of special projects. “But I would say that … Seattle Center is a civil icon. For us, the idea that we have this wonderful gem of a park and community space right in the heart of our city and this is a critical time for all of us to be thinking about what the next 50 or 100 years look like in that location. I like the Space Needle. That’s where I’m gonna put my interest.”

Russell Wilson, Seattle Arena group make new pitches to Mayor

Lopes, a veteran sports executive with Seattle roots, joined the Oak View group, which is is headed by sports executive Tim Leiweke, on Dec. 8 to “lead OVG’s bid to redevelop the KeyArena site into a world-class facility with the ability to serve multiple professional sport teams and the top acts in live music and entertainment.” According to The Seattle Times, the company has business deals in place with 22 sports arenas, including the new Golden 1 Center in Sacramento and the Air Canada Centre in Toronto. Lopes has held several high-profile posts, including vice president and general counsel for the Green Bay Packers and Seahawks.

Mayor Ed Murray told 710 ESPN Seattle’s “Brock and Salk” last month that the city is exploring a major renovation of KeyArena, the former home of the Sonics. Murray announced on Oct. 27 that the city will issue a request for proposals (RFP) in January 2017 to solicit plans from private parties interested in redeveloping KeyArena. Proposals are to be centered around developing an “entertainment facility that can host meetings, concerts and sporting events.” Murray said that he is open to either the SoDo or KeyArena renovation options. He said he hopes to have an idea about all of the viable options by “May-ish.”

Lopes said there are still plenty of unknowns but that he has confidence.

“It does remain to be seen but we do have confidence that there is a possibility and an opportunity at Seattle Center,” he said. “The AECOM study certainly gives us some positive feelings about that.”

KeyArena compared to SoDo arena

KeyArena was last used for the Sonics in 2008, before the team moved to Oklahoma City. The belief had been that the NBA would not be interested in returning to the relatively old and small site, though a report by the AECOM architectural firm suggested that the arena could be retrofitted without being torn down for about $285 million. Lopes said the city-commissioned study mainly showed that an arena could work at that location under the current landmark roof structure — or at least the roof structure that might eventually be a landmark.

“And we will actually even look at the footprint beyond just the roof structure itself,” he said. “We’re going to look at it both ways.”

While there was certainty over the viability of revitalizing KeyArena, the Seattle Arena Group, led by five investors – entrepreneur Chris Hansen, Nordstrom co-presidents Pete and Erik Nordstrom, former sonics player and executive Wally Walker and, most recently, Seahawks quarterback Russell Wilson– took the reins to building a new site SoDo area. The group announced in October that they would forgo public funding and privately fund the entire project. They are primarily focused on convincing the Seattle City Council to vacate a one-block stretch of Occidental Avenue, which the Council rejected with a 5-4 vote in May. They made a new pitch in a letter last week to Mayor Ed Murray and King County Executive Dow Constantine that says the group would only vacate a street and build an arena if they acquire an NBA or NHL team, also opening up the possibility of building the complex if only an NHL team is secured. They asked for the City to tear up the existing Memorandum of Understanding on the SoDo arena, which is set to expire next year, and says that construction of the arena would only begin “until and less and NBA or NHL franchise has been acquired.”

Lopes said the KeyArena redevelopment would not need a commitment from the NBA or NHL either. He said the goal is for the arena to be able to stand on its own

“We believe that we can operate a venue with or without professional sports at a profit and have a good deal for the city,” he said. “We certainly are going to build it to accommodate the professional sports leagues. Our partners are very experienced in that with ICON Venue group, they’ve built dozens of these types of facilities, so we feel confident that whatever we build will be suitable for those leagues.”

When asked for a ballpark cost of the redevelopment, Lopes responded:  “We don’t know that yet,” saying that the group is only now starting its study.

“At this point, all we have is the third-party study from AECOM that I think they had come up with about a $250 million number. “We certainly think it’s going to be more than that, substantially more than that, but just how much more remains to be seen. But nowadays we certainly know that arenas are $300, $400 million at a minimum and can get up in the $600 and $700 million range in certain challenging construction environments, so we don’t know. We’ll have to work on that piece.”

Public-private partnerships

While Hansen’s group has offered to privately fund the SoDo site, KeyArena is on city property. Murray called the arena a city asset and said the outdated facility will be receiving public money for improvements, whether it’s the home of sports teams or not. He believes he has a “responsibility” to make KeyArena work financially. Lopes said his group is currently looking at the deal as a public-private partnership.

“But that’s mainly because this is a city asset and under any scenario, including an arena built somewhere else in the city, the city has a cost challenge in front of them with the KeyArena site,” Lopes said. “So no matter what the city does, they’re going to have to solve, or I should say, they’re going to have to invest resources into that location, whether it be in a public-private partnership with a developer like us or whether it be on their own if the arena is built somewhere else. So we’re going to be having that conversation in the RFP process to determine exactly what that looks like but ultimately the city will get to decide what the best deal is for the taxpayers. So they will decide whether it’s a better deal for them to do a partnership with us at that location or perhaps to do something in another location.”

Other specifics  from the conversation:

On the size of KeyArena: “… I think the leagues are starting to entertain smaller venues than they have in the past, (which) gives that site a real opportunity to be looked at very thoroughly again. And I’m not sure a decade ago when the basketball team was trying to make something work there that the scale they were talking about necessarily fit that footprint but I think that times have changed.”

Arenas with similarly small footprints: “The most recent example would be Sacramento, that just came online. I believe they are about 17,000 for basketball, which certainly the NBA has approved and feels good about and so we look at that as the most recent venue and that certainly is something we would be looking at.”

No plans to buy the property from the city: “The city would retain ownership of the property. I think under our model we would be leasing it from them and operating it. So we would be the tenant. Very different, however, than the model that we’ve had today, which has really been a city managed and a city-owned structure. Going forward, if we were to redevelop this into a public-private partnership, we would take complete operational control of the facility other than the ownership of the lease.”

How long would the lease be? “That remains to be seen, Dori. But it certainly would be long-term. Obviously, we would push something way beyond a term that anybody would have any consternation about.”

How will the group flip council members if public money needs to be involved? “It’s going to be a long, long road here and I would just simply say that under any scenario, again, those council members are going to have to consider what the tail cost is to do something with the Seattle Center location. In other words, it’s not going to continue to operate at a profit if there’s a new arena built somewhere else. That’s simply not the case so they’re going to have that challenge.”

On rebuilding without securing a team: “We would like to get the arena coming out of the ground and then, ultimately, we will talk to the commissioners in the leagues on their timetable and if they’re ready to come to Seattle we certainly feel like we have the relationships to broker those conversations. But we want to build an arena that the people of Seattle can be very proud of with or without.”

On the lack of mass transit, traffic and parking issues: “We need to do a lot of work to not only study it but also come up with solutions for it but I would also say this, Dori, there are over 7,000 parking spaces at KeyArena right now. I think there’s almost 3,000 under city control. So there is adequate parking if people can find it. Now I would say this that the events that are currently going on – and there are well over 100 events a year at KeyArena that people need to keep in mind. And the problem with those is many times those events are creating the most difficult traffic and parking burdens because you’re talking about people who do not have a routine for the arena. So, for an example, an Adele concert can be a very difficult event because people do not know where to park, they do not know how to get in, they do not know how to get out. When you have a professional sports team with the majority of the folks being season-ticket holders, I would ask yourself, back in the day when you were going to Sonics games, my guess is you probably had a routine where you knew where you were going to have dinner, you know where you were going to park, you knew how to get in and you knew how to get out. So I think that when we start talking about professional sports in particular, these buildings tend to function more smoothly than they do for these one-off events.”

On overcoming the Council’s ‘hostility’ toward cars: “There are transit options here, Dori. Obviously, there is the monorail that has some access but there is also (St3), long range, that is coming with two to three stations through that neighborhood on a long-range basis. … When we think about these projects, when we think about what we’re doing for our city, I think we have to look 25, 30, 40, 50 years. That’s vision to me and I hope that the mayor’s office and everybody else has that same type of vision.”

Dori Monson on KIRO Newsradio 97.3 FM
  • listen to dori monsonTune in to KIRO Newsradio weekdays at 12 noon for The Dori Monson Show.

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NBA doesn’t need huge stadiums anymore, KeyArena developer says