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$600M KeyArena Renovation Plan Unveiled

KeyArena Renovation from OVG

A $600-million KeyArena renovation plan negotiated by Los Angeles-based Oak View Group and the city of Seattle would upgrade the historic facility to NHL and NBA standards.

The Memorandum of Understanding, which will be officially unveiled later today, also calls for Oak View Group to spend $40 million to address transportation and infrastructure issues caused by the arena makeover and an additional $20 million into a community fund. Also, funds would be made available to relocate Seattle Center tenants displaced by the arena expansion. The plan, which the city hopes to approve before the end of the year, would be completed by October 2020–just in time for the NBA and NHL seasons. The NHL could include Seattle in consideration of an expansion franchise in the near future (adding Las Vegas put the circuit at 31 teams, with an unbalanced distribution across the continent), while the possibility of NBA expansion is a little more murky.

If the KeyArena renovation plan is finalized, it would be yet another amazing comeback for the historic facility. KeyArena opened in 1962 as part of the World’s Fair, but not as an arena — rather, it was built as the Washington State Pavilion. When the World’s Fair grounds were converted to the Seattle Center, the Washington State Pavilion was remodeled into the Washington State Coliseum, later known as the Seattle Coliseum. That transition from pavilion to arena was part of the original design. It was then gutted and expanded in 1995, serving as home to the NBA’s Seattle SuperSonics until that team’s move to Oklahoma City.

The Oak View Group renovation would go father underground to increase arena capacity. It doesn’t require the city to put up any money, and Oak View Group guarantees the city the revenue it currently receives from the arena plus a revenue share on future events. From the Seattle Times:

“One of the principles that we had was that the city would never go backwards as far as its ability to maintain the revenues that we receive through operation of Key­Arena going forward,” said Brian Surratt, head of the city’s Office of Economic Development. “And that we would be partners, moving forward, in any deal as well.”…

OVG would pay the city an average $2.6 million in annual rent, adjusted for future years based on inflation and applied discounts if revenue targets are reached. OVG gains control of all revenue from the First Avenue parking garage but would pay the city $650,000 yearly to match what the city takes in from the garage.

For two nearby garages, the city maintains total control of incoming revenue. But once it reaches current yearly revenue levels, the city — for the first 10 years of the lease — would pay 75 percent of any surplus income to OVG as a discount on its KeyArena rent.

In moving forward with this plan, the city is basically closing the door on a proposed arena from Chris Hansen near Safeco Field and CenturyLink Field. A previous MOU between the city and Hansen on that project is scheduled to expire this fall.

RELATED STORIES: Chris Hansen’s Group Unveils Pitch for KeyArenaProgress Continues on Possible KeyArena MOU; KeyArena Landmark Status Approved by Seattle Preservation BoardSeattle Hires David Abrams to Review KeyArena PitchLandmark Status Could Spur KeyArena RenovationsOak View Group Selected for Possible KeyArena Project

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