SEATTLE - The City of Seattle is open to tearing down KeyArena and allowing a private developer to build a new NBA- and NHL-capable arena in its place.
That's the major takeaway from the City of Seattle's new request for proposals (RFP) that will be issued Tuesday, likely reigniting a decade-old debate about where the city should allow a new sports arena to be constructed.
The 25-page document, obtained by KING 5, outlines in significant detail what the city is asking of potential developers -- while it still, technically, has a legal agreement with Chris Hansen's investment group to build another arena project in SoDo.
The RFP makes clear that the city is interested in "redeveloping and operating KeyArena at Seattle Center as a world-class civic arena presenting music entertainment, and sports events, including the potential for NBA and NHL events."
The RFP document continues, "The area available for development including the existing KeyArena, as well as the 1st Ave N Parking garage and adjacent parking lot and support areas located on City-owned property on the Seattle Center campus."
The city specifically asks prospective developers to present a Plan A and Plan B, based on whether the roof of the current KeyArena would need to be saved. The city is currently going through a Landmark Preservation Board review of the roof, for this very purpose. But a key element of the RFP states that potential developers can also submit “a second proposal for construction of a new facility to maximize the Redevelopment site's potential."
City Hall sources say any developer wishing to respond to the RFP must provide a plan for a remodeled KeyArena. It’s not an either/or proposition.
Those same City Hall sources say a decision on the KeyArena landmark designation may not occur until the second quarter of next year.
The city's RFP, as seen on page 3 of the document, also notes that the Seattle is currently under a memorandum of understanding (MOU) with Hansen’s group until December 3, 2017, and is “fully committed to the terms of the MOU, and is supportive of ArenaCo’s efforts."
The RFP, crafted in part by 10 Seattle departments, lays out seven objectives. They include a requirement that any bids have “minimal City financial participation" and provide "for mitigation of transportation impacts due to Project construction and Arena operations."
The city prepared the RFP document in anticipation of multiple bids on the KeyArena site. Both AEG and the Oak View Group (OVG) led by Tim Leiweke, have expressed interest in a project at the KeyArena site.
Any bidder will also be likely asked to provide detailed financial information, as the RFP notes that KeyArena has exceeded the operating and maintenance costs, with net revenue ranging from $309,000 to $1,202,000, according to the document. The document notes that in 2015, the current 1st Avenue North parking garage, which is in the redevelopment site, collected $490,000 in parking revenues. The RFP states the “proposer will be responsible for 100% of the funding to be provided” and pay for cost overruns.
City leaders tell KING 5 they are prepared to lease the public land to the private organization.
The redevelopment site includes multiple buildings near KeyArena and to the south.
The RFP also says any bidding developer will be required to prepare a full transportation analysis and complete an environmental impact statement. All proposals are due by April 12.
Seattle Mayor Ed Murray has previously noted that he would like to make a decision on the future of KeyArena by the end of June.
In a prepared statement to KING 5, Murray said: “We have a unique opportunity to reimagine KeyArena and continue the growth and redevelopment of Seattle Center. There is significant interest in working with the City of Seattle to create a civic arena that fulfills the current and future needs of our growing city that serves the greatest number of community members. I, along with others at the City, are looking forward to reviewing proposals with the community. We are 100 percent committed to finding the best deal for Seattleites.”
City Council member Debora Juarez, who chairs the committee overseeing Seattle Center, and helped craft the RFP, told KING 5 today, "This is a regional asset and state jewel," and that she's "not just trying to be hyperfocused on Seattle or hyperfocused on the arena. We're looking at the whole Seattle Center and the footprint."
As far as the three month timeline for bids, Juarez added, "These people know what they're doing; they're not amateurs.”
However, City Hall sources say the process if played out in full, is expected to take roughly five years from proposal to actual opening of a new building.
The entire RFP process comes after the Seattle City Council last May narrowly rejected Hansen’s request for a street vacation permit. It was the last step needed for Hansen to proceed with his project after it was first approved under the MOU back in 2012.
According to multiple sources in and out of City Hall, Hansen and Murray spoke after the council's rejection. Murray asked if it was OK to pursue a deal at Seattle Center. Hansen, according to those same multiple sources, told Murray he no objections to the city exploring its options.
However, Hansen’s group has acquired roughly $125 million in SoDo real estate and has added Seahawks quarterback Russell Wilson as an investor. Hansen’s group is on the verge of resubmitting a street vacation petition as part of a new plan to privately finance the full cost of a new NBA/NHL arena in SoDo.
Public records indicate Murray and his staff did not waste any time after the council refused to grant the street vacation requested by Hansen, contacting Leiweke early last summer. Leiweke, who told KING 5 in December that his group was eying "a massive rebuild” of KeyArena, has a long history with arena management and construction, including Toronto’s BMO Field, Madison Square Garden in New York City, and the Forum in Inglewood, Calif.
Emails obtained via a KING 5 public records request show officials from the city and Leiweke’s group met on August 3. Leiweke sent an email to Budget Director Ben Noble, Seattle Center Director Robert Nellams, and a pair of other city employees a few days later thanking them for the time and consideration, and to “learn more about the vision for a major renovation of KeyArena."
The emails also show that most Seattle Center employees were kept in the dark about any possible renovation until very recently.
It is widely believed in City Hall circles that AEG has a head start on other suitors. The company, once run by Leiweke, currently has a contract with the City of Seattle to provide marketing, sales, technical, and operational assistance at KeyArena. The company also has been working with Nyhus Communications, run by Roger Nyhus, an influential public relations, and political consiglieri who last fall hosted Murray’s re-election campaign kickoff at his Capitol Hill home.
AEG Facilities President Bob Newman was optimistic his company can renovate Key Arena, and retain the roof.
"Plain and simple it can be, there's been technological advancements in our industry design enhancements,” Newman said in Seattle Wednesday. “The user needs have changed over time."
He pointed to another project in Paris, which renovated an arena in a residential area, as an example.
"I think there is a way to make it work under the current footprint of the building," Newman said.
Both groups are clearly intrigued by a widely cited 2015 study, commissioned by AECOM that showed KeyArena could be remodeled for $285 million. That report has been widely debunked by critics and even by Leiweke who told KING 5 in December it was not a $285 million project. He was unavailable for comment today.
Any KeyArena proposal could likely hinge on transportation as well. City leaders said as much in a meeting with Lower Queen Anne residents last November, who replied with comments that the area has changed significantly since the Sonics left Seattle in 2008.
Residents at the meeting told city leaders they had significant concerns, including one woman who claimed she felt “trapped in my condominium” during current event nights at the Key.
Juarez said Wednesday that "transportation is a deal breaker on many levels."
“We want to make sure the uptown neighborhoods are all involved, that the surrounding neighborhoods are all involved,” Juarez said. “And I think for some other people, perhaps on this floor, we want to squarely address the transportation issue so we're not hypocritical."
Newman told KING 5, he knew it was an issue, but that every project "has a way to get it done.”
The NBA and NHL have, for the most part, stayed out of the debate over KeyArena or a new SoDo arena. But NHL leaders have said multiple times they are not interested in a remodeled KeyArena. The venue, as currently constructed, has so-called “off-center” ice in the bowl. The NHL office declined comment today, and the NBA did not respond to requests for comment about the RFP.
However, in this Seattle Arena story, that has been filled with twists and turns over the course of ten years, two words may now be appropriate: Game On.
