Arena giant AEG pulls out of Seattle KeyArena renovation process
SEATTLE – One of two groups that submitted plans for a possible renovation of KeyArena withdrew from the process Sunday because of concerns about how the city of Seattle has conducted review of the proposals.
Seattle Partners – a group that combined arena giant AEG and Hudson Pacific Properties – announced it is pulling out of the process after submitting plans in April for a proposed $521 million renovation of KeyArena.
Seattle Partners was one of two groups to submit proposals for the privately-financed renovation of the arena. Oak View Group was the other group to submit a proposal – a $564 million plan – and has appeared to be the favorite in the process.
In a letter to Seattle Mayor Ed Murray, Seattle Partners says it believes it has the best plan, but raised significant questions that the project can be completed by either group.
“We fear the City is driving toward an unrealistic financing structure, and we believe the City has failed to conduct a sufficiently thorough, objective and transparent process to properly evaluate the respective strengths and weaknesses of the two proposals and, most significantly, to identify the proposal best positioned to deliver a project consistent with the community’s interests,” the letter read.
While it appears Seattle Partners withdrew before being bypassed for the project, they issued strong criticisms on their way out, especially since AEG has been in charge of operations at the city-owned facility for more than a decade. The decision to withdraw comes with the city likely announcing its choice moving forward on KeyArena within the next week. The city had originally said it would choose a proposal by June 30 on which group to enter into negotiations with on the KeyArena remodel, but that date has been pushed up.
“There are strengths and weaknesses in each proposal and the City fully expects a robust negotiation upon choosing a preferred alternative to ensure the final plan meets the needs of the surrounding neighborhoods, the city, Seattle Center and those who will use the building for years to come,” Murray said in a statement.
Seattle Partners said it has sought feedback from city officials and from an advisory committee on ways to improve its proposal, and that a request for a “best and final offer” from all bidders was refused.
“We have seen little indication of the collaborative and iterative process we were told to expect and is typical of such requests for proposals,” the letter read.
Concern about the proposal from Seattle Partners centered on their request to use $250 million of the city’s bonding capacity to fund the project and a design that called for stretching of the arena’s roofline to make the engineering of their plans functional.
But Seattle Partners also noted that aspects of Oak View’s financial plan have yet to be released and were redacted from the proposals that were made public.
“We have strong reservations about whether that proposal can be successfully achieved consistent with the City’s best interests,” the letter said.
Oak View Group CEO Tim Leiweke responded in a statement affirming their proposal is 100 percent privately financed.
“Our project is 100 percent privately financed and built with 100 percent private proceeds,” Leiweke said. “With our partners MSG and Live Nation, we have assembled the best team in the sports and entertainment industry. Our chief objective is this: Provide the best financial deal for the city, an exemplary public-private partnership, and build Seattle a showcase venue for professional sports, music, and entertainment.”