SEATTLE — A group fronted by entrepreneur Chris Hansen has written the Seattle City Council and Mayor Jenny Durkan reiterating its wish to create an alternative NBA arena option in Sodo.
The letter, dated Wednesday and signed by Hansen, Wally Walker, Erik and Pete Nordstrom and Seahawks quarterback Russell Wilson, states: “We believe providing an alternative arena option in Sodo creates an insurance policy for the city, particularly if a future NBA ownership group is unable to strike a competitive deal at Seattle Center.
“Having both Seattle Center and Sodo as viable options for potential NBA team owners would send a powerful message to the NBA, that not only is Seattle the best available market, but we also understand what an NBA team requires to be successful.’’
The city last fall signed off on a partnership that will see the Los Angeles-based Oak View Group overhaul KeyArena for NBA and NHL use for a privately funded figure that has now reached $850 million — including the cost of an adjacent $50 million parking garage not originally part of the deal.
Combined with a $650 million price for an NHL expansion team scheduled to start play in October 2021 and a now-estimated $80 million cost for a Northgate Mall NHL training facility, OVG has committed nearly $1.7 billion for the franchise, infrastructure and a transportation fund to alleviate parking and traffic around Seattle Center.
Oak View Group co-founder Tim Leiweke was in Olympia this week lobbying state legislators to defer at least $80 million in state sales tax related to the KeyArena renovation and the training center.
House Bill 1839, sponsored by House Majority Leader Pat Sullivan (D), was filed soon after and seeks to allow the taxes to be deferred until Jan. 1, 2022, and then be paid off in eight equal installments including interest.
On Friday, Leiweke said all is proceeding on schedule with the renovation and that an announcement will come in “the next 30 to 60 days” about the location of the team’s future American Hockey League minor pro affiliate.
Leiweke’s group is finalizing the site location and AHL president and CEO David Andrews hinted this week it will be on the West Coast — a logical move to provide proximity to the parent NHL club.
NHL Seattle senior adviser Dave Tippett said Friday his group was still discussing options for AHL teams.
Seattle has the option of owning an AHL team outright — which only six of 31 NHL teams currently do — or maintaining an affiliation with one owned by a separate entity.
Adding an NBA team at KeyArena alongside the NHL would increase potential city profits from a revenue-sharing plan agreed to with OVG. With that deal now firmly in place, the city would be creating potential competition for its own future NBA and revenue-generating prospects at KeyArena if it allows Hansen’s plan to proceed.
As part of the letter, the Hansen group referenced an ESPN article from last fall in which the author states that “multiple ownership groups’’ feel the NBA might prefer a second new arena in Seattle because KeyArena revenues are being split too many different ways.
No names from the ownership groups were provided by the article.
It was the second of two such stories suggesting the NBA might not be interested in KeyArena’s revenue structure. After the first of those was published last August, NBA sources immediately denied any league concern about revenue streams at KeyArena.
The league’s head office continues to be apprised on developments related to design and construction and Leiweke said in an interview this week that part of the reason for escalating KeyArena remodel costs is keeping a floor plan and locker rooms designed to NBA specifications.
NBA commissioner Adam Silver, a longtime friend and associate of Leiweke’s, told The Seattle Times in September 2017 that: “Tim has been involved in the building and operation of more NBA arenas than anybody on the planet. I have no concern that the building proper won’t meet our requirements.’’
Los Angeles Lakers owner Jeanie Buss and Golden State Warriors president Rick Welts expressed similar confidence in Leiweke.
NHL Seattle managing partner David Bonderman, who has invested in KeyArena as well, is a minority owner of the Boston Celtics and has expressed interest in selling that stake and bringing an NBA team here as well.
Hansen’s initial attempt to build a Sodo arena — with up to $200 million in public bond funds — stalled in May 2016 when the city council rejected a motion to sell him part of Occidental Avenue South to complete his arena land holdings.
Then, in 2017, Hansen’s group submitted a new proposal for a $600 million arena built entirely with private funds.
That pitch has been in limbo ever since as the city focused on the OVG proposal to revamp KeyArena — an offer that did not require teams to be acquired ahead of time. The Hansen pitch for Sodo is contingent upon the developer first securing an NBA team to play here — a big reason the council rejected his initial proposal in 2016.
But the Hansen group suggests in this week’s letter that its commitment to build only after securing a team provides a “no risk” proposition to the city.
It forwarded additional documentation from Parametrix, a traffic analysis consultant retained by Hansen’s group, showing the upcoming construction of a Lander Street overpass will alleviate most traffic impacts caused by the sale of the portion of Occidental envisioned for a Sodo arena.
Parametrix also states that a joint scheduling agreement from 2016 between Hansen’s group and other Sodo-area teams more than meets nationwide industry standards and no further binding deal is needed. The Mariners, Seahawks and Sounders had all written the city in 2017 expressing concerns about the arena plan and the desire for a more formalized agreement.
City officials had stated that answering all remaining questions about traffic and the scheduling agreement were hurdles that needed to be overcome before forwarding the Sodo request to the council for a vote.