The expected cost of an upcoming renovation to Seattle’s KeyArena is now $700 million, representing a $100 million increase from the previous estimate.
Oak View Group continues to plan its overhaul to KeyArena, which will require closing the building temporarily in order to complete an extensive renovation. Once it reopens, the newly renovated arena would be up to modern NBA and NHL standards, and an effort to bring an NHL expansion franchise to the facility is well underway.
The privately financed renovation has been expected to cost $600 million, but an update provided to the Seattle City Council on Thursday showed that that estimate has risen to $700 million. Public money will not be used to cover the increasing cost, as agreements between the city and Oak View Group call for the firm to cover any increases or overruns. More from The Seattle Times:
But the city won’t be on the hook for the increase from $600 million, said Marshall Foster, director of the Seattle Office of the Waterfront and Civic Projects. Under the MOU and under a development agreement scheduled for a vote by the council in September, OVG would be responsible for the entire cost of the renovation of the city-owned arena, including the recent increase and any additional overruns, he said.
OVG is close to naming a contractor for the project and has revised its budget estimate based on talks with that contractor, Foster said.
Representatives for OVG confirmed the cost increase and that the contractor announcement is coming soon.
The group led by pro-sports executive Tim Leiweke plans to use both private equity and debt financing for the renovation in general and to cover the $100 million increase, Foster said, briefing the council’s Select Committee on Civic Arenas on the project’s status. An independent adviser is vetting OVG’s plan for the city, he said.
There are several key steps remaining in the planning, including an environmental review that is due August 30 and September votes from the city council on development, lease, and integration agreements. If the process moves forward, Oak View Group could begin construction later this year and re-open the renovated arena in 2020. That would allow the facility to host Seattle’s new NHL team starting with the 2020-21 season, provided that the league ultimately approves an expansion bid.
KeyArena is scheduled to host an NBA preseason game between the Sacramento Kings and Golden State Warriors on October 5. That could be the last event at the venue before the renovation begins, as Oak View Group is seeking to gain control of KeyArena on October 15 in order to have work begin this year.
Rendering courtesy Oak View Group.
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