The plan to remodel KeyArena into a world-class concert and sports venue took a hit Sunday when Seattle Partners unexpectedly pulled out of the project, blaming the city of Seattle for “unrealistic” financial expectations and an absence of thoroughness and transparency.
The decision leaves Oak View Group, led by CEO Tim Leiweke, as the lone bidder for the Key. The decision also has to improve chances for Chris Hansen’s group that has sought for five years to build an arena in Sodo.
OVG had been considered the favorite for the Key, partly because it made no request for public bonds to help fund construction, a stipulation in the city’s request for proposals sent out in January.
Seattle Partners, comprised of Anschutz Entertainment Group, which has operated the Key since 2008, and Hudson Pacific Properties, requested $250 million in bonds, saying the deal would provide a surplus to the city of $144 million over the 35-year life of the lease.
In a letter sent to Mayor Ed Murray, the City Council and media outlets at 3 p.m. Sunday, AEG President Bob Newman blasted the city’s handling of the bids, writing:
We fear the City is driving toward an unrealistic financing structure, and we believe the City has failed to conduct a sufficiently thorough, objective and transparent process to properly evaluate the respective strengths and weaknesses of the two proposals and, most significantly, to identify the proposal best positioned to deliver a project consistent with the community’s interests.
At an open house in early May to allow the public to examine the proposals and ask questions, an exuberant Newman said he was “thrilled” with with responses from the public and city government.
Things obviously changed. Newman claimed the city was derelict in its response to SP:
” . . . consistent with a general lack of active engagement through this evaluation process, the City declined to seek improved terms, refusing requests from us and others to call for a best and final offer from both bidders. We have seen little indication of the collaborative and iterative process we were told to expect and is typical of such requests for proposals.”
Newman also reserved a shot for OVG, saying he was highly skeptical its plan could be pulled off:
” . . . We have strong reservations about whether that proposal can be successfully achieved consistent with the City’s best interests. If the City elects to proceed with that remaining proposal, to protect the public interests of Seattle, it is imperative that you closely and diligently monitor the process to ensure that Oak View Group is held accountable for all elements of what it has very publicly promised to the citizens of Seattle.
Besides the OVG pullout, another letter Thursday to Murray and council from a participant group, Uptown Alliance, representing residents and businesses closest to Seattle Center, said both bids were deficient:
“Uptown Alliance found both proposals lacking in different but fundamental ways and cannot favor one submission over another at this time. Examples of weaknesses include Seattle Partners’ proposal suggesting a bonding mechanism that seems politically challenging for this City to accept and a design that does not respect the criteria for this building destined for landmark approval; Oak View’s proposal being arena-focused giving little attention to its integration within Seattle Center and ignoring the community at-large as well as sparse details on the newly formed operating company and its values. Both teams have discussed possible addition/changes to their submission.
The four-page letter, signed by Deborah Frausto of the Alliance, also asked that the rush to a decision be slowed down and more information provided by creation of an addendum to the RFP that would address the group’s concerns.
The original plan called for a decision between the groups to be made by June 30, but city staff has hinted the decision on the winning bid could be done by this week.
The letter says Uptown wants all information before the selection, not after: “We need to be sure that critical issues are addressed before arena redevelopment plans are finalized to know how it will work. This is not about waiting for an EIS and taking the necessary mitigation approach.”
The letter was sent before the SP withdrawal, which did not mention the community group’s push-back.
Leiweke issued a statement after the SP withdrawal, reiterating that his offer is 100 percent privately financed: “Our chief objective is (to) provide the best financial deal for the city, an exemplary public-private partnership, and build Seattle a showcase venue for professional sports, music, and entertainment. While we are still engaged in the RFP process, we have no further comment. We look forward to the Mayor’s decision.”
A spokesperson for Hansen’s group declined to make a statement on SP’s withdrawal. Murray’s office issued a statement:
“We appreciate Seattle Partners’ interest in investing in KeyArena and our ongoing partnership with AEG on major events, such as Bumbershoot. Over the last few months, the City and the Community Advisory Panel have undertaken a careful review of the two proposals to redevelop KeyArena into a world class entertainment facility that will bring the NHL to Seattle and the Sonics back home.
“There are strengths and weaknesses in each proposal and the City fully expects a robust negotiation upon choosing a preferred alternative, to ensure the final plan meets the needs of the surrounding neighborhoods, the city, Seattle Center and those who will use the building for years to come.
“It is unfortunate Seattle Partners chose to pull their proposal. As recently as May 19th, Seattle Partners stated in a mass email: ‘We applaud the City for executing a thoughtful public process. Engaging with teams from the City and the public has strengthened our proposal and crystallized our approach.’ We hope to continue our current relationship with AEG and look forward to addressing our path forward on KeyArena, as well as our commitment to engage the community, in the coming days.”
The original timeline called for Murray to make a decision by June 30 and forward it to the council, which has the option of reviewing a revised plan submitted by Hansen. The council could hear Hansen’s plan in September, which requires the council to permit a vacation of a street to trigger implementation. The council rejected an earlier plan by Hansen in a 5-4 vote 13 months ago, after which Murray began exploring the Key remodel.
Hate to repeat myself but Seattle is looking at the gift horse (the Hanson deal)… any other city in the u.s. would jump at his proposal.
Murray thinks Hansen is radioactive to the NBA. Murray also overplayed the city’s hand regarding the rivalry between Leiweke and his old company, AEG.
Murray’s sensibilities and reasoning that drive his arena decision making are defective and flawed. The man lacks an appreciation of the Seattle Center, Upzoned Uptown as well as the skewed and overreaching force the Port of Seattle plays in this choice. The Coliseum is an architectural gem with a rich history that is worthy of fighting for. So, is the Seattle Center. Imposing 200 “WorldClass” events on the Seattle Center and Upzoned Uptown is not an answer. It’s a problem and dark turn that will irrevocablly change the character and quality of this area. It will become a bustling pit of traffic gridlock and an overloaded, overused Seattle Center.
You hit on a dilemma that has been part of Seattle Center for 40 years: What is it?
Park? Playground? Arts center? Sports center? Education lab? Protest hub? Commercial district? It’s been a little bit of all. But its fate is being directed by a lame-duck mayor who knew nothing about sports until 700,000 people showed up in his downtown on a cold morning and no one was arrested.
Murray was born in Aberdeen and graduated from the University of Portland. Murray is not a native son.
We still don’t know what it is ? Decades of studies and reports.
Countless articles by the media and news reports. We still don’t know what we expect and want from Seattle Center ? We are lost.
Looks like the Uptown Alliance will be a force to be reckoned with going forward. Let’s see how Oak View, the Port and even Hansen reach out to them.
I attended a meeting in September and for what it’s worth, the 50-some people who attended were a bit skeptical, but open to the idea and rational. I didn’t sense it was full of knee-jerk NIMBYs.
I get that AEG’s proposal was a bit inferior for a couple reasons (i.e. public bonding, awkward looking roof), but holy smokes what a letter.
This is a really vivid commentary from AEG about the way the City governs and consummates deals; and it’s probably not very far off from being accurate given how the City has treated Chris Hansen over the years.
Factoring in some sour grapes, I would tend to agree that Murray’s lust for legacy overrode his understanding of the process it takes to render a quality decision.
He’s not a vampire is he, Murray ? No ? Yes ? I’d really like that. Please tell me he’s a vampire. It’s been a while since I used the stake. I enjoy that. Oh, please, let it be true. Vampire Murray.
No. I’ve seen him in daylight.
The “Seattle Process” chewed up AEG as expected. Let this be reminder of the patience Chris Hansen has shown to the City of Seattle. Looks like OVG doesn’t have to show there best hand since AEG folded and the Mayor lost ability to play them against each other.
The dance has commenced to be awkward for Murray.
Is Murray a zombie ? I can’t tell. Give me the word.
No, again. Back away from the SyFy channel.
Seattle Center will always have a traffic problem unless you tear down the convention center and fit more lanes through. Unless, a loop freeway will eventually come through Ballard and hook up with the viaduct…never mind.
Step away from the herb, Herb.
They did have a solution planned back in the day. Called the Bay Freeway it was stopped by referendum in 1972.
Go back further to 1968 for the Forward Thrust measures. The Kingdome was approved but rail transit was not. Gah.
I composed a comment to your last story about the status of the Key Arena remodel project wondering if the skids were being greased towards building a white elephant that ultimately would not deliver anything to the winter major league sports fans of Seattle. I self-edited it by not posting as it had turned into an emotional rant and I’m no longer emotionally involved in this story……(yeah, right).
In any event, I wonder if this pull-out is another sign that at it’s essence, this project is a square peg in a round hole, that fatally flawed white elephant I fear. I also wonder if Newman is inferring that the Leiweke group is engaging in that age old tactic of promising the sky, getting the bid, and then at a critical point in the middle of the project saying…..”oops , we need concessions due to unforeseen circumstances”. Sort of, but not exactly the tactic the Minnesota Vikings took to get that Super Bowl years ago by promising more seating capacity for the game and never delivering.
Oh well, let’s see: outgoing mayor who wants to leave a legacy but won’t have to answer to these issues……a dance partner development group looking for a foot in the door…..locally influential interest groups trying to subvert the other location…..What could possibly go wrong?
Glad I’m not emotionally involved. (sigh)
There were reasons Hansen didn’t want to deal with a public structure on public grounds where the city had a hand in its operation. Every new mayor has a new agenda.
Now Murray has no leverage over Leiweke except . . . Hansen. The irony could bend light waves.
SoDo Slayer says “Drive a stake in politics and politicians.” Not really, but they seriously have no business in the sports business. Time and again they have proven slow, dim, clumsy, stumbling and a bumbling . . . lurching forward with luck and falling backwards on their backs with an overconfident sense of what is appropriate or needed.
1) Holy water. Check ! 2) Long, sharp stake. Check ! 3) Silver bullets. Check ! 4) Garlic. Check ! Ready to get down to business. The SoDo Slayer is prepared for all Zombies and Vampires attacking the SoDo Arena group. Spent last week camped out behind a dumpster near the Deja Vu on Occidental. No Port Trucks. Cars for Mariner games. Some risky behavior at 3AM at the 2,000 space Safeco Field garage but, still, no Port Trucks. I’m keeping my camera and video recorder going hoping to spot the ever elusive Port Truck. Zip. Nada. Squat. Big zero. Lots of legs though from behind the dumpster. Wink. Wink. Nod. Nod. Know what I mean? !
How’d the garlic work for you with the Vu girls?
Stiletto heels to the ass don’t feel too good. I was out of commission for a week after the doctors at Harborview stitched me back up. Vu girls kept trashing my rumpled suit and laughing about my strong odor that was much more than mere garlic. But, I’m back at it behind the dumpster today. Still no trucks. Odd ? No respect.
Godzilla and Rodan upset with Port of Seattle’s money and power influencing the so called arena “debate”. What debate ? No debate. Port is another monster. We think the Port of Seattle is our greatest enemy: the three-headed space dragon King Ghidorah. Bite one of those heads off and watch the money spew out. Evil Port of Seattle. Eat Port container cargo ships for desert.
FWIW – AEG does not, “operate the Key.” AEG provides contracted services for managing suites, group sales and marketing. KeyArena is operated and managed by the City of Seattle and its employees.
Why do I get this sinking feeling we’ll still be talking about this a year from now and still have no plan or course to get a venue built?