On 7-1 vote, City Council OKs privately financed $600 million renovation of KeyArena

SEATTLE -- One more step forward and maybe the most important yet.

Late Monday afternoon, the Seattle City Council gave the go-ahead for a $600 million renovation for KeyArena.

After months of negotiation and a public support campaign, the council approved the Memorandum of Understanding between the city and Oak View Group (OVG).

The vote was 7-1, with only Mike O’Brien voting no. He said he will wait to decide his support once the full transaction documents are disclosed. Councilmember Lorena Gonzalez was traveling and could not vote.

Entertainment and sports rainmaker Tim Leiweke made a rare appearance in Seattle and spoke before the council before the vote. He is the president of OVG and his group is using private funding to make substantial changes to the arena, which hasn’t seen much change since the mid-1990s.

Moving forward with the MOU helps city leaders rid themselves of a weight on their shoulders: KeyArena itself.

It's city property and they are on the hook for problems. Oakview's private funding and guaranteed profit for Seattle are a huge enticement for the council.

“This sets the stage,” said Councilmember Teresa Mosqueda. She and others on the council noted this vote sends a signal to the NHL and NBA that the town is ready for them to come back.

The MOU requires OVG to pay upwards of $40 million to a transportation fund for public/private partnerships for fixes in the area. The money will be paid out over the three-plus decades of the lease of the building; no specifics on changes have been finalized.

The vote also ends the prolonged promises for a basketball arena south of downtown by investor Chris Hansen. His long-shot proposals for KeyArena and Sodo had no traction on the council and will not be considered.

Council Chairman Bruce Harrell offered an olive branch though. “The line is always open. Nothing precludes ongoing conversation,” he said.

KeyArena isn't supposed to be just for concerts, though.

What about teams?

Leiweke's history says he’s likely to get attention from the NHL and NBA. He's recruited big investors like University of Washington graduate David Bonderman and Hollywood impresario Jerry Bruckheimer to his team, with ties to both professional hockey and basketball.

He said he is proud of the work they have done, but will wait for a full comment until after the MOU is signed by Mayor Jenny Durkan this week.

Durkan issued the following statement afterward: “I’ve said consistently that I’m committed to bring back our Sonics, recruit an NHL team, and invest in our City. Under this plan, arena construction is 100% privately financed and will provide good family wage jobs for decades to come. Nothing in this MOU precludes other private investors from privately financing other arenas in Seattle, but it does establish a pathway to making Seattle Center vibrant for future generations. I commend the leadership of Councilmember Juarez, Council President Harrell, and Councilmember Bagshaw and look forward to reviewing and signing the MOU later this week.”

Investor Chris Hansen issued a statement saying his group would still try to build an arena in the Sodo district and obtain a new NBA team.

Harrell said the MOU “puts us in the driver’s seat” for a team.

An environmental impact study for the KeyArena renovation will begin and last until August 2018. OVG hopes to break ground in October next year.

OVG hopes, but doesn’t promise, that opening night can happen in 2020.

And an NHL team may be dropping the puck that evening.

Leiweke's full statement follows:

"On behalf of OVG, we want to thank the Seattle City Council, City staff, and City consultants and representatives for the cumulative work that signifies a monumental moment with today’s 7-1 vote. We feel extremely good about the partnership between the City of Seattle and OVG and respect and applaud the City in its ability to be thoughtful, collaborative, and deal focused throughout this process while maintaining the best interest of its citizens.

"The process over the last year serves as an example of the transparent public/private collaboration that has led to a great outcome that other municipalities will emulate.   We have enjoyed getting to know our neighbors in Seattle Center, Uptown, South Lake Union, Belltown and Queen Anne. We look forward to continuing our work with the community over the next year as we complete our long form agreements and full entitlement.  We will continue to be good partners and good neighbors and look forward to a collaborative and beneficial ongoing relationship will all community stakeholders.

"While this vote marks another important step in the process, we have work to do. Out of respect to our new leader, Mayor Durkan, and our continued commitment to follow the appropriate process, we will reserve our comments until later this week when we anticipate the Mayor signing our agreement."