Seattle City Council approves $600 million privately financed renovation of KeyArena

SEATTLE -- The Seattle City Council voted Monday to approve a memorandum of understanding with Oak View Group to renovate the KeyArena.

The vote was 7-1.

The agreement is a significant step in the process of redeveloping KeyArena into a world-class sports and concert venue.

Mayor Jenny A. Durkan issued the following statement afterwardU:

“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.

KeyArena housed the NBA's SuperSonics until they relocated to Oklahoma City and became the Thunder. Oak View Group believes it can have the building ready by October 2020 if environmental approvals are obtained and demolition can start in October 2018.

Related: Tim Leiweke explains how renovated KeyArena will bring NHL, NBA to Seattle

The project is expected to total about $600 million and Oak View is also on the hook for another $40 million to help improve transportation in the area around Seattle Center. They are also responsible for regular facility upgrades for the life of the 39-year lease agreement. Should those upgrade requirements be met, there are two eight-year lease extensions that will be activated, and carry the entire life of the lease agreement to 55 years.

"I think the most important part of this MOU is the fact it states very clearly to the leagues that this project is going to happen, we do have a deal with the city, they can make a deal. They are very focused ultimately not only on building a new arena here and giving us the partnership and certainty in order to do that," OVG CEO Tim Leiweke said.

If approved, the MOU could further endanger efforts to build an arena in the SoDo District.