The Seattle City Council has approved a Memorandum of Understanding with investment firm Oak View Group (OVG) to renovate the city’s KeyArena in an effort to attract an NBA basketball team or NHL ice hockey franchise to the Washington State city by 2020.
Approved yesterday (Monday) after a vote of 7-1 in favour of the project, the Council said that the MoU includes plans to almost double the square-footage of the KeyArena and transform it into a “world-class multi-purpose sports and entertainment arena”.
The City of Seattle reached an initial agreement with OVG for the development in September and the MoU approval will allow the project to progress to the next stage.
The MoU commits OVG to a 39-year lease with two, eight-year renewal options for a total of up to 55 years. OVG has also agreed to contribute $600m (€507.1m) to the project as well as cover all cost overruns associated with the development.
In addition, as part of the lease agreement, OVG will pay $40m for transportation improvements, as well as $20m in-kind or cash to non-profit organisations and various other costs related to the MoU process and the overall project.
KeyArena is currently home to WNBA women’s basketball franchise the Seattle Storm and Seattle University’s Redhawks men’s basketball team. However, the venue was also previously home to NBA team the Seattle Supersonics, prior to its relocation to Oklahoma City ahead of the 2008-09 season.
The City is keen to bring NBA basketball back to Seattle as well as target a future expansion franchise in the NHL, which last year awarded a team to Las Vegas in Nevada. It is hoped that work will begin towards the end of 2018 for a reopening in October 2020.
Bruce Harrell, president of the Seattle City Council and also co-chair of the Select Committee on Civic Arenas, said: “The City negotiated one of the strongest arena agreements you will find in the country, protecting our taxpayers and the City. The community benefits agreement is unprecedented with investments to help address issues like homelessness and other social needs.
“I am confident this will be a partnership of success with OVG in building a state-of-the-art arena, generating economic vitality, and the ultimate goal of getting an NHL team and bringing back the Sonics.”
Tim Leiweke, chief executive of OVG, added in a statement published by the Associated Press news agency: “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.”
OVG is said to be prioritising an NHL team, with a view to securing an NBA franchise at a later date. Billionaire David Bonderman and filmmaker Jerry Bruckheimer have been lined up as lead owners for a potential NHL franchise.