AEG president Bob Newman on proposed KeyArena rebuild: ‘This is about bringing teams back’
The leaders of Oak View Group made it clear that while they believe Seattle will get an NBA and/or an NHL team, their plan to renovate KeyArena would be a success with or without one. The president of the opposing bidder, Bob Newman of Anschutz Entertainment Group, shared a different message with “Brock and Salk” on Thursday: AEG’s arena pitch is focused on the Sonics.
“Our focus is to bring the teams back here; it’s not just about another entertainment venue,” Newman said. “This is about bringing teams back, and in the mix you make it a great entertainment venue also.”
On Wednesday, before the city’s deadline for proposals to redevelop KeyArena, AEG submitted its formal plan for building a “next-generation venue” in Seattle Center, which the group is calling the Seattle Coliseum. The CEO of OVG, Tim Leiweke, discussed the specifics of their proposal for KeyArena with “Brock and Salk” on Wednesday. Both proposals are designed to accommodate both the NBA and NHL, plus making the space a high-quality music venue. While OVG estimated a $564 million price tag for the project, the city said AEG pitched a renovation budget of more than $500 million. AEG also noted in its executive summary that the arena would “generate more than $144 million in surplus revenue which will go directly to the City of Seattle.” The city would retain ownership of the facility, with “no risk to the City” under AEG’s plan.
“This is the moment we have all been waiting for. We have two strong proposals to consider,” Brian Surratt, the City of Seattle’s Director of the Office of Economic Development, said in a press release. “We take this responsibility seriously and understand the sense of urgency for sports and music fans. The City remains committed to choosing the best possible path to bring back the NBA and to bring the NHL to Seattle.”
While Leiweke was confident in Seattle getting an NBA and/or NHL team yet wary of guaranteeing it, Newman promoted AEG’s track record in these matters when he spoke Thursday with 710 ESPN Seattle’s Mike Salk and Tom Wassell.
“We’re the only entity on the Earth that has done this over and over. It’s that simple,” said Newman, whose company has ownership stake in more than a dozen franchises around the world, including the NBA’s Los Angeles Lakers. “We have venues on five continents. Most recently we went shovel in the ground, committed to a new arena in Las Vegas, said we’re doing it, we’re building it to team specs but it’s not contingent on a team. A year before opening, team application went in, team was awarded, NHL team starts up this October. We’re the only ones that can say that.”
While the NHL has an odd number of teams and would appear to be closer than the NBA to expanding, Newman said of AEG’s proposed KeyArena remodel: “This will bring NBA back to Seattle.”
“I think the NBA and NHL, they will finally show interest in the market,” he said. “Who comes first? I couldn’t be a prophet on that. I do think that potential team owners will activate immediately to explore the opportunity.”
Newman said there won’t be serious discussion with the NBA or NHL until the city is “committed” to an arena project. While he’s confident in securing a sports team, Newman said AEG’s plan can “absolutely” survive without the NBA or NHL as anchor tenants.
“That’s the strength of Seattle,” he said. “That’s what makes this shovel-in-the-ground ready. We will go as soon as we are given the green light.”
If AEG’s shovel is picked, Newman said the construction schedule could vary and that the group’s projected timeframe is approximately 24 months from start to finish, but that “you can adapt it to longer, you can adapt it to shorter, depending on the needs of the partners in the area, as well as the biggest partner in this project – the city. They’re going to retain ownership of this great building.”
One of the key differences in the two bids is how the projects would be financed. OVG said its project would be funded with private equity guaranteed by The Madison Square Garden Company and debt financed by Goldman Sachs. The group proposed a 35-year lease with the option of five additional 10-year leases.
AEG, meanwhile, is partnering with Hudson Pacific Properties, a major commercial developer in the Seattle market. Newman said AEG’s proposal includes no new taxes or risk to the city and “will be 100 percent privately financed and guaranteed.” However, there is also a bonding element. Newman explained that AEG created a model that makes the city a “partner” so that “there’s an opportunity to run some financing through the city. It’s a minority portion of the project but what it does is it provides the opportunity.”
“There’s no new tax assessments or anything like that,” Newman said. “What it does is potential provide a surplus of over $140 million over the initial term back to the city, as well as gives us the toolbox to make a team successful. We put it on the table because it really is the best option.”
Wassell asked if AEG could move forward if the city chose not to use the bonding or investing. Newman responded: “There’s a million ways to slice the pie up, so we would continue the dialogue, absolutely.”
Congestion and parking
A major concern for the proposals to redevelop KeyArena – as opposed to the Seattle Arena Group’s proposal for a new venue in SoDo – is the potential of worsening already snarled traffic in the area.
AEG addressed transportation in its executive summary, writing, “we will invest $5 million to accelerate existing transportation strategies around the arena and create a shared mobility hub adjacent to the arena. The Seattle Coliseum will be fully connected into Seattle’s transportation infrastructure, and the arrival of Light Rail will integrate seamlessly.”
When asked how he would convince people that traffic won’t be worse, Newman answered: “What we have to do is we have to get the different entities that are working on different projects all in one room to make sure we’re in sync. And that’s before you try anything new.”
“When you have a ‘go’ for a major project like this, that’s when the opportunity arises for everybody to rally and say, ‘How do we pull it off?'” he added. “You need that catalyst and I think this will be a catalyst, not just for the traffic but it will be for the other investment in Seattle Center and surrounding area.”
Newman said that the need to protect KeyArena’s historic roof ended up being beneficial to the design process. He said once they were able to fix dysfunctional “back-of-the-house areas,” the proposal became a “domino of positives.” That included making the bowl better, increasing capacity, wider seats, better sight lines, more functionality, improved concourses, club spaces and social spaces.
Newman said the proposal also includes more than 100 underground parking spaces near the loading docks for team parking.
“All that was possible by fixing the back-of-house spaces and that became 800 percent more efficient in itself where you can take all the truck traffic that’s clogging up First Avenue and the surrounding streets, it will all be on site, sub-terrain now,” he said.
Newman said seating capacity would be “right in the sweet spot” for modern arenas, with a capacity of more than 18,000 for basketball games and over 17,000 for hockey.
“The building will look completely different, in a great way, underneath the roof,” he said.