With a decision expected in later this month by the Seattle city council on which competing developer was going to be selected to enter negotiations on a renovation of KeyArena, one of the two bidders made the whole thing moot yesterday by withdrawing its bid, saying the city’s financing plans were “unrealistic”:
In a letter to Seattle Mayor Ed Murray, Seattle Partners said it believes it has the best plan, but it raised significant questions about whether 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.
Okay, let’s read between the lines a bit here. That bit about an “unrealistic financing structure” may refer to pushback on the proposal by Seattle Partners (a group led by arena management giants AEG) to use $250 million in city bonds to raise money for the renovation, to be repaid partly by $5 million a year (increasing by 2% each year) in rent, and partly by ticket, business, and parking taxes that would normally go to the city’s general fund. The other bidders, Oak View Group (led by Tim Leiweke, AEG’s former head), have similarly asked to “identify a mechanism for reinvestment of new revenue streams back into the project,” but didn’t get as far as publicly identifying exactly what they would be asking for.
Lack of a “thorough, objective and transparent process” sounds like whining that Oak View was getting treated nicer than AEG just because AEG spelled out in advance its subsidy demands, which is kind of a fair gripe, honestly. Though taking your ball and going home because you’re expecting to lose is never a good look.
Anyway, sounds like Oak View will now get to try to work out a deal with Seattle over Key renovations, though they still (in theory, anyway) need to compete with Chris Hansen’s proposal to build a new arena in SoDo. One hopes that by the time that decision is made, more of the financial details of the Oak View plan will be made public, since it sounds like there would be some tax kickbacks involved (as there would be for Hansen’s plan) — the idea to leverage better offers by starting a bidding war for Seattle arena plans remains a good one, but whether any of the proposals will be actually good for Seattle residents has yet to be determined.