During a meeting on Monday, Seattle officials discussed some of the key terms of Oak View Group‘s memorandum of understanding (MOU) for a KeyArena renovation.
Terms of the MOU between the city and Oak View Group were unveiled earlier this month, and now Seattle officials are in the process of vetting the proposal. One of the components in the $600 million plan calls for a $40 million contribution by Oak View Group into a local transportation mitigation fund.
That term in particular received attention on Monday, when it was explained during a Seattle City Council Select Committee on Civic Arenas meeting that Oak View Group is not proposing to contribute the $40 million as a lump-sum payment. Instead, the firm is seeking to spread the payment out over the life of its proposed 39-year lease for the facility.
Further discussion on this term as well as other details of the MOU will take place in the coming months, but one option that was mentioned was for the city to issue public bonds of up to $20 million against Oak View Group’s planned allocation if funds are needed in the short run. More from The Seattle Times:
City budget director Ben Noble told the committee that OVG’s transportation fund payment is to be spread over the four-decade lease. Noble also suggested the city could issue public bonds for up to $20 million against the pledged OVG money if it requires a lump sum in the short term.
Opposition to public bonding for sports played a role in the council denying a street-vacation request in May 2016 that effectively sank a proposal for a new arena for the city’s Sodo District pitched by entrepreneur Chris Hansen. That proposal included up to $200 million in bonding attached.
The opposition to public bonding for sports also factored in the city picking OVG as its KeyArena renovation partner over a rival proposal by the Seattle Partners group — which had asked for $250 million in such bonding.
But that bonding was for construction of arenas to benefit private developers. Brian Surratt, head of the city’s economic development office, said in an interview following Monday’s meeting that any transportation fund bonds would benefit public infrastructure.
The city could approve the agreement with Oak View Group in December and begin construction next fall, allowing the project to be completed by October 2020. The renovation would upgrade KeyArena to modern NBA and NHL standards.
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