The City of Seattle may need to float a bond to pay for a KeyArena transportation fund to fulfill a $660 million proposal to renovate the site.
That was one of the key questions raised during a lengthy review of the tentative agreement, between the Oak View Group (OVG) and City of Seattle.
OVG agreed on the deal with Seattle’s Office of Economic Development to build a $600 million arena at the current KeyArena site last week. It still needs Seattle City Council approval to proceed.
The agreement, called a Memorandum of Understanding (MOU), also lays out $20 million for a community fund and a $40 million transportation fund. OVG has agreed to pay for it all with private money.
But on Monday, upon questioning from Seattle City Councilmember Rob Johnson, the key negotiators mentioned a wrinkle: Seattle may have to bond against the fund.
City Budget Director Ben Noble acknowledged the MOU only calls for OVG to make payments of roughly $1 million a year over 39 years.
“We could, as a city, choose to bond against that,” Noble said. “So current present value basis, it’s 20 million dollars.”
Transportation questions ruled the long briefing. However, the council is expected to drill down on the financing as well.
OVG has offered to cover cost overruns and displacement bills for current tenants. It has also agreed to spend more than $168 million in capital improvement costs to vest two extensions at the site.
OVG believes it can open in the building in September of 2020. That timeline works for a potential NHL franchise to call Seattle home.
Council chambers were packed with mostly supportive people, including groups who operate out of Seattle Center. Pottery Northwest, in particular, was initially worried about the development. However, their Executive Director James Lobb told the council he'd been encouraged by the discussions with OVG. Pottery Northwest’s building was slated to be torn down in the arena development. However, OVG has agreed to temporarily relocate the business during construction and put it back in its historic building.
Only a pair of people testified in support of the SoDo Arena project, which, technically, has an agreement with the city that expires in December.
The council is slated to have at least three more meetings on the topic -- October 10 and November 16. The Council could vote on the MOU as early as December 4 or after the SoDo deal expires.
OVG’s Lance Lopes issued a statement after the meeting, expressing optimism.
“We applaud the City of Seattle for its open, collaborative and transparent approach to determining an exciting future for the New Arena at Seattle Center. Today's meeting in City Council chambers reaffirmed our belief in the broad support for this project as evidenced by the strong turnout. Our team at OVG has been building arenas in communities around the world for nearly 40 years. We’ve seen a lot over four decades – and learned a lot too. We remain laser focused on our project and our partnership with the community, the Uptown, South Lake Union, Queen Anne and Belltown neighborhoods, and the City of Seattle. We will continue to aggressively pursue an NHL franchise, the return of the NBA, and through our close collaboration with Live Nation, make the New Arena at Seattle Center a globally-relevant live music destination.
"The path we’re on with the City, the community and each of our partners is the path we all want for Seattle: A future with a vibrant new arena that’s home to professional hockey, basketball and the biggest concerts and live events on earth. And today we’re one step closer to making that future a reality.”