Seattle Center Arena MOU

The City of Seattle and Oak View Group (OVG) negotiated a Memorandum of Understanding (MOU) to redevelop KeyArena into a world-class arena, ready for professional hockey, basketball, and music. The MOU was transmitted to Seattle City Council by the mayor. The Seattle City Council will review the MOU and ultimately vote on the terms of the MOU. Review the FAQ, the Executive Summary, and the One-Pager for more information.

If the MOU is approved by December 4, 2017, and the entitlement process moves forward on schedule, the redeveloped arena is scheduled to open October 2020.

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Permitting

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Frequently Asked Questions

Q: When will the renovated Seattle Center Arena open?

A: If the entire process moves ahead on schedule, Oak View Group hopes to open the rebuilt arena October 2020.

Q: When will the NBA come back to Seattle?

A: In short, no one knows. The best we can do is prepare our City for their eventual expansion, or team relocation. NBA Commissioner recently told reporters, expansion is “inevitable” and Seattle is on the list for possible cities. By redeveloping the Seattle Center Arena to meet NBA standards, we’re one step closer to bringing back the Sonics. In addition to the work City officials continue to do to maintain relationships with the NBA, Oak View Group has strong relationships with NBA team owners and the commissioners, and will continue to work towards bringing back the Sonics with the City of Seattle, and the community.

Q: When will the NHL come to Seattle?

A: Oak View Group is working hard to bring the NHL to Seattle. With the redevelopment of KeyArena, Seattle will be in a prime position to attract a new NHL team. While we don’t know for sure when a team will come, we’re all preparing to make Seattle an attractive location for professional hockey for the day when the NHL chooses to expand.

Q: What is the timeline for the development project?

A: We have it available for you here.

Q: What happens next with the MOU?

A: The MOU must be reviewed by City Council and then approved, for the project to go forward. The goal is for City Council to vote on the MOU by December 4, 2017 so the project can stay on schedule for an October 2020 opening.

Q: What is an EIS?

A: An EIS is an Environmental Impact Statement prepared under the State Environmental Policy Act (RCW 43.21C). An EIS evaluates probable adverse environmental impacts based on a proposal, here, the proposal is the renovation of the Seattle Center Arena.

Q: What happens if City Council does not approve the MOU?

A: Then it is likely the redevelopment of the Seattle Center Arena will be up to the taxpayers. Very conservative estimates would require at least $150 million to keep the arena operating. If an investment is not made in the arena, the building will continue to fall into disrepair, becoming a blight on the Seattle Center and the neighborhood. As we know from this process, the kind of renovation needed to attract the NBA and NHL would require hundreds of millions of dollars – and there wouldn’t be a clear funding source for that kind of development. The OVG MOU is clearly the best deal for Seattle.

Q: What has OVG agreed to regarding construction completion guarantees with the City of Seattle?

A: The Memorandum of Understanding (MOU) anticipates that OVG to obtain a guarantee of completion from the construction management company. Additionally, OVG must provide evidence of sufficient capital to fund the construction of the arena development through loan commitments and equity. The required equity portion will be deposited into an account for the benefit of the project construction in either cash or letters of credit prior to the commencement of construction.

Q: What if the construction cost exceeds the amounts deposited in the construction account?

A: OVG is responsible for all construction over-runs related to the project budget estimate. Additional loans or equity will be deposited by OVG and/or its equity partners as needed.

Q: What responsibilities does the City have regarding the operations of the newly developed arena?

A: The City will not have any operating responsibilities for the new arena.

Q: Who is responsible for funding future capital expenditures for the arena project and how can the City be certain that the arena will be maintained at a high level?

A: OVG and its arena operations team will be responsible for setting aside funds and making expenditures for all future capital needs. The MOU outlines a schedule for significant annual deposits and expenditures to a capital expenditure fund and describes arena standards around which OVG will use those funds to maintain the arena project throughout the term of their operating lease.

 

KeyArenaRFP

The City received two proposals for the redevelopment of KeyArena. The proposals submitted were designed to accommodate both the NBA and NHL, and both paid special attention to a high-quality music and entertainment experience.

The City reviewed the proposals with the assistance of the Arena Community Advisory Panel. Recommendations were delivered to the Mayor in June. 

The preferred partner in negotiations with the City is Oak View Group.




The RFP Process

The City of Seattle sought proposals from parties 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. Responses were due to the Office of Economic Development by 5:00 p.m. Wednesday, April 12, 2017.

The City of Seattle hosted an open house with the proposers and the public on May 11 at KEXP from 5:00 PM to 8:00 PM so the public could learn more about the proposals.

For more information, email OED at OED@seattle.gov.

Press releases:

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Frequently Asked Questions

Q: Why renovate or redevelop KeyArena?

A: The City of Seattle was approached by several parties interested in redeveloping KeyArena.
The last major renovation to KeyArena was in 1995. As owners of the arena, the City is committed to a redevelopment plan that provides a venue to serve the civic and entertainment needs of our region, enhances the vibrancy of Seattle Center and surrounding neighborhoods, and could open the door to possible NBA and NHL teams.

Q: What impact does this have on the current MOU agreement for a possible SoDo arena?

A: The City remains fully committed to the terms of the MOU, and is supportive of ArenaCo's efforts to return NBA basketball and attract NHL hockey to Seattle. However, the City must also consider the potential opportunity represented by KeyArena, should the MOU not be fulfilled and/or the ArenaCo project not move forward.

Q: Will the redevelopment of KeyArena bring an NBA and/or NHL team to Seattle?

A: The City is looking for proposals from all interested parties that will redevelop and operate KeyArena as a world-class civic arena offering music, entertainment and sporting events, including the potential for NBA and NHL events.
Both AEG and Oak View group have relationships with the NBA and NHL.

Q: Why now?

A: We feel the timing is right, given the growth of the City. The City of Seattle was approached by several parties interested in redeveloping KeyArena. We also are at a place in time where we need to focus on the future of Seattle Center. We are in a unique situation with significant interest in the city's options for music, entertainment, and sporting events. We are in the midst of a holistic Seattle Center planning and visioning process that includes a mobility strategy. Given the age of the building, KeyArena does not meet current standards, and this creates an opportunity to develop a world-class arena.

Q: How will this impact transportation in the region if KeyArena is booked an additional 80-100 nights a year?

A: KeyArena, alongside Seattle Center, currently hosts approx. 100 events each year. Over 12 million people visit Seattle Center every year, and many events are planned during non-peak traffic times. However, as a part of the RFP, we asked submitters to provide new strategies and fund mitigation of transportation impacts due to construction and operation as a part of their proposal to help address this concern.
Both bidders offered ideas about how to improve transportation. City staff will review those proposals, while simultaneously considering future transportation planning for the region. Any solution for the neighborhood will be multimodal.

Q: Will the renovation require any public funds?

A: In the RFP objectives, we asked for minimal City financial participation. Both bidders are bringing more than a half billion dollars to the table. Both bidders have requested some form of a financial partnership with the City. Since the Seattle Center Arena is owned by the City, the City Budget Office will evaluate both proposals to determine the full cost and benefit to City finances. The City, if it chooses a bidder, will negotiate the best deal for Seattle with minimal City financial participation.

Q: What is the timeline of the RFP process?

A: Proposals were due on April 12 at 5:00 PM. City staff and an Arena Community Advisory Panel are reviewing both bids.

The Executive Review Team will make a recommendation to the Mayor by the end of June 2017.

If the Mayor chooses one of the proposals, the Seattle City Council would vote on a final MOU and/or Lease Agreement.

Follow developments at www.seattle.gov/arena.

Q: How will you involve the community in the RFP process? 

A: The City is committed to regularly updating the community, including area residents and businesses, on the progress of the RFP and potential future impacts.

The public is invited to attend an open house on May 11 from 5:00 PM - 8:00 PM at KEXP to learn more about both proposals.

Q: Why move forward with KeyArena when SoDo is an option?

A: We need to focus on a plan that can work for the City and our residents. KeyArena has housed many entertainment options and sporting events throughout its history. We are committed to finding a viable solution that provides a venue that supports the civic and entertainment needs of our region. The City remains fully committed to the terms of the MOU between the City, King County, and ArenaCo. The City is supportive of ArenaCo's efforts to return NBA basketball and attract NHL hockey to Seattle. The City must also consider the potential opportunity represented by KeyArena, should the MOU not be fulfilled and/or the ArenaCo project not move forward.

Q: Is the City of Seattle in communication with the NBA or NHL?
A: We are in ongoing conversations with both organizations.

Q: Are you committed to rebuilding KeyArena without a guarantee of an NBA or NHL team?

A: We are exploring all our options. What we can say is that we are focusing on a venue that can accommodate music, entertainment, and civic events. We also required proposals to meet NBA and NHL standards.
Both bidders have relationships with both the NBA and NHL. Both bidders submitted plans that are to meet the requirements of the NBA and NHL.

Q: What is the timeframe of the redevelopment project?

A: Details are spelled out in the RFP, which can be found at http://www.seattle.gov/arena. Proposers included an estimated schedule, which may include landmark and SEPA review, design, permitting, and construction. The specific timing remains to be determined, but we estimate that planning to completion of construction will take approximately three to five years.

Q: What does the RFP include as part of its redevelopment request?

A: It is the KeyArena site and the property south to John Street. Specifically, it includes these buildings and properties: KeyArena, West Court Building, NASA Building, Restroom Pavilion, Seattle Center Pavilion, Blue Spruce Building, 1st Ave N Parking Garage, Pottery Northwest/Park Place.

Q: Is KeyArena designated a landmark?

A: A 2013 landmark study performed for Seattle Center indicates that KeyArena meets all six of the criteria for landmark designation. The City of Seattle initiated the process to review landmark status of the facility. We will take this into careful consideration and are asking our RFP responders to do the same. The City of Seattle's Landmarks Preservation Board, working with the Department of Neighborhoods, is responsible for administering the Seattle Landmarks Preservation Ordinance.
Both bidders submitted proposals that preserved KeyArena's iconic roofline.

Q: What has happened to KeyArena since the Sonics left in 2008?

A: In 2016 alone, the arena welcomed approx. 570,000 guests at nearly 100 events, up from 531,000 guests in the previous year. 2016 marked the sixth straight year that KeyArena ranked in the Pollstar top 100 arenas worldwide based on concert ticket sales. It also marks the sixth year in a row the arena has generated a significant net revenue. Those funds are used to support Seattle Center public programming and the entire campus.
In 2017, KeyArena will host the WNBA Seattle Storm, Seattle University Men's Basketball, WWE Smackdown, Ariana Grande, Red Hot Chili Peppers, Shawn Mendes, Chris Tomlin, Harlem Globetrotters, 2017 PAC-12 Women's Basketball Tournament, WNBA All-Star 2017 game, Lionel Ritchie and Mariah Carey, Neil Diamond, and many more.

Q: What will happen to KEXP and the other nearby facilities?

A: Facilities north of KeyArena including KEXP, Vera Project, SIFF and the North Plaza are not included in the boundaries of the redevelopment site.

Q: Who is managing the request for proposals?

A: The City of Seattle through the Office of Economic Development (OED), led by Director Brian Surratt.

Q: Who do I contact to share my suggestions and input?

A: The general public can send us input via this form. Press should reach out to OED's PIO.