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Seattle Mayor Ed Murray and the Oak View Group (OVG) have a formal agreement to build a $600 million privately financed arena at Seattle Center, with tens of millions more in transportation mitigation.

The deal calls for construction to begin next year and be complete by 2020.

The Memorandum of Understanding (MOU), as it is commonly known, was formally submitted to the Seattle City Council on Tuesday morning in the Select Committee for Civic Arenas.

OVG co-founder and CEO TIm Leiweke said in a statement that the MOU is a step forward in bringing Seattle an arena at Seattle Center.

"The completion of the MOU provides a level of certainty that Seattle has never had before, and OVG, the City Council, elected officials and the residents of Seattle, must now turn our attention to the NHL and NBA and make it undeniably clear that we are more than ready for them to come to Seattle," Leiweke said in a statement.

Seattle Mayor Ed Murray was expected to make a formal announcement at the KeyArena site in Seattle Center during a press conference Tuesday morning. That event was canceled just moments after a story broke that claimed Murray molested his cousin in the 1970s. This was the latest accuser to come forward in the child sex scandal involving Murray. He later announced his resignation from office effective 5 p.m. Wednesday.

Tuesday evening, hours after the press conference was canceled, OVG representatives attended a meeting hosted by community group Uptown Alliance to talk about KeyArena’s preliminary deal.

“The reason we were able to present the MOU to the city council today is because of the hard work that many of you in this room have done,” OVG’s Seattle-based director Lance Lopes said to about 20 Uptown residents.

Lopes wanted to reassure community members that the responsibility would not fall on them.

“We will build this. We will take all the risk from the city. We will take care of the costs associated with whatever the impacts of this arena in this community,” Lopes said.

OVG, led by Leiweke, has committed $40 million for transportation mitigation around Seattle Center and $20 million for a community fund in addition to the cost of the arena. That could push the project well over two-thirds of a billion dollars in private financing. Half of the community fund will go towards YouthCare and addressing youth homelessness.

Seattle City Budget Director Ben Noble says he’s confident OVG has the financial backing to carry it out. In fact, Leiweke said potential NHL franchise investor, UW grad and Billionaire David Bonderman “has put money into the building.”

Bonderman has personally met with council members and has been spotted at Seattle City Hall recently.

The agreement comes after weeks of negotiations and by the deadline set by the Seattle City Council for such an MOU. Leiweke called the negotiations “difficult” and “emotional” for everyone.

The council will now review and potentially amend the deal between the Office of Economic Development and OVG. But the current terms lay out a vision for the next 50 years of the KeyArena site and potential for the NBA and NHL.

The city is offering a 39-year lease to OVG with two eight-year renewal options. In return, the city will receive base rent equivalent to the net revenues that Seattle currently gets from KeyArena.

Noble said there is no city debt being issued for redeveloping the site. OVG will assume all cost overruns from the project, as well as the operating costs -- including day-to-day and long-term capital upkeep. OVG has to invest $168 million in capital improvements to extend the lease after 39 years, according to Noble.

OVG will assume all operations of the First Ave. N Garage and will get a slice of the net revenues from two nearby parking garages. The city will be guaranteed $2.6 million a year, with payments adjusted for inflation, according to Noble. He said that’s the current base revenue generated from KeyArena, First Ave. N Garage and Seattle Center campus sponsorship rights. OVG also has to reimburse the city if the current tax revenues generated by the arena fall below $2.4 million a year.

The terms are well above what OVG initially proposed to the city.

Leiweke said during a conversation about the MOU that his company may spend close to $100 million trying to create transportation solutions in the Uptown and South Lake Union area. In addition to the $40 million transportation fund, Leiweke said $30 million of the arena construction budget is for transportation. He said, the mandated improvements, per the lease, could mean millions more for traffic improvements.

“We plan on being aggressive on every event,” Leiweke said in regards to the transportation issues.

The MOU does not specifically mention improvements to the Monorail, which is privately owned and has been mentioned previously as a transportation solution.

The transportation fund matches the amount pledged by SoDo Arena investor Chris Hansen for his project on the south end of the city.

OVG has also agreed to pay for a North Downtown Mobility Action Plan and the State Environmental Policy Act review of the KeyArena site. It has also agreed to pay $1.5 million to relocate the skate park and Blue Spruce Apartment tenants.

OVG will pay to temporarily relocate Pottery Northwest, which has resided in the Bressi Garage for decades. That building was given landmark status by the Seattle Preservation Board. It has been slated for demolition under the OVG plan to allow for a subterranean tunnel to new loading docks. Leiweke said the “long term vision will include them, not replace them. We like bricks. We are well aware of the historic nature of the building as well.”

Seattle’s Economic Development Director Brian Surratt said he was confident the construction timeline was adequate based on conversations with staffers. There had been questions about whether it was possible based on the city’s agreement with the NCAA to host the 2019 Men’s basketball regional. Surratt said Seattle plans to work with the NCAA on a schedule modification because of the KeyArena project.

Surratt and Leiweke both said there is not an exclusivity arrangement as part of the deal, only that the city won’t offer a better deal to any other potential arena partners. However, Leiweke added the “privately financed arena is not something we would try to prevent, (but) the market is what the market is.”

That will naturally lead to questions about the status of the SoDo Arena project. Hansen and his investment group still, technically, have an MOU with Seattle to build an arena there. It expires in December. The group has offered to amend that deal, crafted in 2012, and build the project with full private funding.

Last week, Hansen’s group also wrote a letter to the Seattle City Council, laying out a proposal to build a privately financed $100 million renovation for KeyArena. The proposal said it could be converted into a smaller auditorium and amphitheater.

The city said it was too little too late. Surratt said it should have come during the Request for Proposals phase.

“If Chris Hansen would have submitted the response, we would have evaluated the response,” he said. “I wouldn’t call it a proposal. The drawings that he sent that envisioned possibilities, we would have evaluated.”

Leiweke went one step further.

“The proposal -- number one -- it’s not his building. (There’s) no collaboration. That’s what’s wrong with your SoDo. They’ve never ever communicated to the leagues or the city. We played by the rules.” Leiweke continued, “If we would have submitted that proposal, we would have been shot down in two minutes.”

The OVG chairman added, “Let’s not chase ghosts.”

There have been questions raised about whether OVG, as a third-party vendor, could attract NBA and NHL teams and make it financially viable for the franchise owners. Leiweke said those doubts should be eliminated with Bonderman’s participation and that the argument is “100 percent not true.”

Noble said his office had done its due diligence and “at this stage, we are satisfied” that it will not be a problem.

As far as the leagues are concerned, NHL Deputy Commissioner Bill Daly said Tuesday: "We can confirm the group has expressed strong interest in owning and operating an NHL team. We continue to monitor."

NBA Spokesman Mike Bass said: “The NBA is not involved in the ongoing Seattle arena process, and we have no plans to expand at this time.”

The first hearing with city council members is slated for Monday. OVG says it would like to begin the environmental impact statement on September 27.