Chris Hansen Thursday offered a detailed comparison between his project and two bidders competing to remake KeyArena. Primary point: Team owners may not like someone else owning and operating the arena.
Arena shots fired.
On its sonicsrena.com site Thursday, Chris Hansen’s group offered a detailed comparison between its Sodo project and the two bidders seeking to remodel KeyArena. The “competitive analysis” concludes Sodo is better for the city because of design, transportation, more tax-revenue generation and lower risk, and likely more attractive to team owners because it puts sports ahead of the concert business.
It also suggests that the inability to own or run the building at Seattle Center will cause team owners to look outside the city, perhaps to Bellevue, for a friendlier deal in the marketplace that doesn’t include the third-party operations of either bidder, Oak View Group or Seattle Partners (Anschutz Entertainment Group).
A music-first operation, the report contends, can limit the sports calendar, as well as operations priorities and the sharing of sponsorships, premium seating and parking.
Under a headline, “Objective,” the report stated:
. . . Our objective here is first and foremost civic in nature. Our partnership has funded all of the costs to date from our personal capacities based on our strong commitment to bring the NBA and NHL to Seattle. Our primary motivation is not profits, the music business, or enhancing a corporate network of arenas. It is returning pro sports to Seattle. We think our commitment and goals are fundamentally different from SP and OVG.
The Hansen group claims that after an arena in Sodo is opened, it will assist in helping keep KeyArena financially viable as a second-tier concert/sports venue, one of the biggest concerns for city politicians seeking to keep Seattle Center in good business shape.
“We also stand ready to assist the city in finding an optimal solution that protects the city financially as it relates to KeyArena, just as we were under the MOU,” the report said.
It also contends that the construction timeline by both bidders, given the four years it took Sodo to get all city and state regulatory approvals, is unrealistic, saying five to seven years from 2017 is more likely — and means being without a civic arena in Seattle from the time of demolition until re-opening.
The Hansen counterpoint was offered just ahead of an open house that was to take place Thursday on the Seattle Center grounds (KEXP radio) featuring presentations by both bidders that would allow the public to see displays and ask questions.
City officials and a citizen advisory panel are reviewing the proposals with a plan to choose one by the end of June. Hansen’s request to re-consider his plan, which lost a year ago a vote by the City Council to vacate a street his project needed, is unlikely to be heard before September.
The analysis estimates that upfront taxes from the Sodo construction will produce a lump sum of $11 million to $12 million to the the city, which would also receive annual tax revenues from $4 million to $5 million from the arena. The Key bidders, in various ways, have asked that they keep nearly all building revenues in order to pay down construction debt and fund maintenance and improvements.
The analysis calls out SP for its controversial request for $250 million in municipal bonds to help lower construction costs, when the city’s request for proposals specifically asked that the city’s contributions be “minimal.” The Hansen group made a similar request in its 2012 proposal, which it has abandoned in a revised pitch for an all-private arena now back in the hands of city officials.
But the analysis also claims that Oak View, which did not ask for bond help, nevertheless asked for a redirection of tax revenues, essentially a public subsidy, that total as much $200 million. OVG CEO Tim Leiweke has argued that the tax revenues generated would not otherwise be available to the city if the Key wasn’t massively upgraded.
One example of an OVG subsidy is a proposed 850-car garage to alleviate the event-day crush in the lower Queen Anne neighborhood.
The project is not part of its $564 million bid. OVG has said it hopes to get funding help from the Port of Seattle. A spokesman for the port denied having talks with either bidder.
If it were built, the analysis estimated the cost of the garage at $30 million, producing annual revenues of more than $3 million. OVG asked for operational responsibility for all three existing Seattle Center garages. The report said the three garages produce more than $4 million in revenues for the Seattle Center budget. A revenue-sharing agreement for the garages was proposed in the bid, but offered no details.
The report insisted there would be no similar subsidies in the Sodo plan, with the exception of a waiver of admissions taxes on tickets that has been granted to the Seahawks and Mariners.
“We will privately fund all entitlement, construction, maintenance, operations and capital improvements associated with our arena,” the report said. “This is vastly different from both the SP and OVG proposals.”
Regarding design, the report says the Sodo project’s start from scratch, rather than having to deal with the constraints of KeyArena’s smaller footprint and soon-to-be-landmarked roof, will create roomier entries, concourses and seating, and better sightlines.
It claims the unique “Sonics rings” of seating tiers will provide 2,000 low-priced seats. And first-of-a-kind “gopher” suites eight rows up from the basketball floor will provide better premium seating than the options from Key bidders.
The Hansen camp called out OVG and SP regarding an exclusivity requirement, meaning that the city would agree to not permit construction of a competing arena.
“This is a critical point of differentiation,” the report said. “Both SP and OVG appear intent on blocking our right to build a competing arena, while we have asked for no such consideration. We are fine with Seattle being a two-arena market and the resulting competition . . . competition is good and fair.”