Seattle mayor cancels arena MOU announcement so he can resign in disgrace instead

Well, I don’t think anyone saw quite that coming: Seattle Mayor Ed Murray was all set to hold a press conference announcing a memorandum of understanding for a KeyArena renovation, when staffers abruptly took down the renderings and canceled the event so that Murray could instead resign as mayor after a fifth (!) person accused him of sexually abusing them as a child:

He announced his resignation Tuesday, hours after news emerged that a younger cousin was publicly accusing Murray of molesting him in New York in the 1970s.

Murray, a former Democratic state legislator elected mayor in 2013, didn’t appear in public to make the announcement. Instead, he issued a statement saying his resignation would be effective 5 p.m. Wednesday.

“While the allegations against me are not true, it is important that my personal issues do not affect the ability of our city government to conduct the public’s business,” the mayor said.

The MOU was still sent by the mayor’s office — which will now be temporarily run by city council president Bruce Harrell until previously scheduled elections in November — to the council, which will have a much more interesting time discussing it than expected. Early reports (the mayor’s office’s web site doesn’t appear to have the actual agreement posted yet, but then it also still hasn’t caught up to the news that the mayor isn’t mayor anymore) are that Tim Leiweke’s Oak View Group has:

  • sweetened the pot with $40 million in money for traffic mitigation in the notoriously car-crowded area around the arena, plus $20 million for a “community fund”
  • agreed to pay rent on KeyArena equal to what the city currently earns from the building, with a similar deal in place for associated parking garages
  • promised to pay all cost overruns and all operating expenses, “including day-to-day and long-term capital upkeep”

I still want to read the fine print — presumably OVG is still looking for $40 million in tax breaks as part of the deal — but this certainly looks like an improvement for taxpayers on the initial proposal, and further evidence that starting a bidding war between two developers for your city’s arena affections is a promising strategy. In particular, that $40 million in transportation money isn’t just a bone to throw to Seattleites worried that the Key neighborhood would get too choked with cars if a pro sports team again played there, but also a commitment by OVG to match Chris Hansen’s similar pledge for transit improvements around his proposed Sodo arena. Whether this is a good deal is still to be determined; but it’s a way better deal than most cities get, and that’s to Seattle officials’ credit.

It’s also a deal that loses its biggest booster with the departure of Murray, who was trying to fast-track the Key plan so he could have some legacy other than “mayor who was forced to resign for abusing teenagers.” That’s not a bad thing at all, necessarily: The council can now take its time to beat on the plan with sticks to make sure there are no hidden pitfalls, and even do an in-depth comparison to Hansen’s latest ante-upping plan to build a Sodo arena and renovate Key himself as a concert venue, if it wants. But either way, it will be considering two plans that are at worst pretty close to break-even for taxpayers, and that’s unheard of in modern sports venue politics.

As for any of this getting an NBA team back to replace the Sonics, that’s still in the distantish future: The league has been clear that no expansion teams are forthcoming anytime soon, and there aren’t any teams immediately looking to move, either. Hansen is a committed hoops fan, but he also may have cheesed off the NBA by giving money to block an arena in Sacramento for the Kings so he could try to buy them instead; Leiweke may be more interested in concerts than sports, but he also should have a good relationship with the leagues from his time at AEG, operators of the Staples Center, among other arenas. Really, the main obstacle to getting an NBA (or NHL) team in Seattle is that the league has been holding out for a new or renovated arena, since to do otherwise would mean admitting that allowing the Sonics to move just because they had to play in a building renovated way back in 1994 was a mistake, so adopting either of these plans should get the leagues willing to talk, at least.

Either a Sodo arena or a renovated Key would come with lots of construction debt that a sports team would have to help pay off via rent if nothing else, so there’s still a chance of a Sprint Center outcome with an arena so busy with concerts that it doesn’t need teams (though without the tons of public debt part, and also Seattle is twice as big a TV market as Kansas City). But if the goal here was to give the city a shot at new sports teams without saddling taxpayers with the costs, Seattle is doing a bang-up negotiating job so far.

11 comments on “Seattle mayor cancels arena MOU announcement so he can resign in disgrace instead

  1. I’m usually loathe to give Seattle city government praise because, well, they usually don’t deserve it, Neil, but I’ll agree with you about how playing relatively hard-to-get has brought them two arena proposals that go fairly easy on local taxpayers (a constituency usually treated like an ATM by whoever’s in the Mayor’s office or City Council).

    Still, I see no way that Hansen’s SoDo arena will ever see the light of day because even with Murray’s exit, there is nobody on the City Council (including interim mayor Bruce Harrell, who’s never stood for anything) who will change course. The City owns the Coliseum and they want the revenue events there would bring in with no competition from a similar privately-owned venue. The Port of Seattle remains dead-set against the SoDo arena even though they haven’t exactly demonstrated why an arena would cause them problems in an area where football and baseball stadia don’t. In addition, the Seattle Times continues to be in the tank for the Coliseum redo, to the point that they’re now not even allowing reader comments on Geoff Baker’s puff pieces on their website. Geoff has been a pretty good journalist in the past, but he’s being a house man on this one.

    In short, even though the SoDo site makes so much more logistical sense, the fix for the Coliseum is still in and Murray’s exit will do nothing to change that.

  2. “The City owns the Coliseum and they want the revenue events there would bring in with no competition from a similar privately-owned venue” is actually a decent reason for preferring the Key site. (Or, to put it the other way around, it’s unclear whether there’s enough concert business to go around to support both Key and a Sodo arena.) The rest of it not so much.

    Still, if ten years ago someone had said, “What if Seattle could get a private company to renovate Key at almost no cost to taxpayers?”, I think most Seattleites, Sonics fans or otherwise, would have been jumping for joy.

  3. The MOU (97 pages) is online now

    • “iv) “Baseline Tax Guaranty Payment” means the annual tax receipt shortfall payments, if any, calculated on a tax by tax basis for each of the taxes described in the definition of Baseline Tax Threshold; calculated for each tax as the positive difference (if any) between the Baseline Tax Threshold for such tax less the applicable tax revenues received by the City during a calendar year of the Lease Agreement for such tax.”

      Clearly I’m going to need to spend some time with this…

  4. Ooof. That’s quite a document to wade through, but thanks Joe.

    If there’s one thing Seattle has demonstrated, it’s that it is possible to reject the notion carpetbaggers always carry along with them – namely that there is an immediate deadline and there is no time to argue over details.

    There’s never a deadline where free money for billionaire welfare scam artists are concerned. They will always be willing to wait to take your money, no matter how hard they lobby for immediate decisions to avoid this “impending sports catastrophe”.

    Some teams will move (like the Colts, Sonics, Browns etc). But whatever sports league you are dealing with is never going to completely rule out dealing with you in future. It’s bad business to do so. You can’t run a crooked poker game if you keep excluding the marks from the table, can you?

    If nothing else, Seattle should be lauded for it’s methodical approach to this. It could be that a truly terrible deal is agreed in future. We can’t know that. But for now at least, they have controlled the process rather than allowing the process to control them. That’s a win compared to most other municipalities.

    • They’ve saved themselves a ton of money and headaches by taking their time. Easy to imagine an alternate reality where everybody panicked trying to get an arena deal in place because the Kings were a sure bet to come, or the NHL was positively going to pick them for an expansion team leaving them with a lousy arena deal and still no teams to play there for the foreseeable future.

      And if they’d dove in headfirst right when the Sonics left they’d probably be on the verge of having the eventual tenants demand immediately upgrades to an arena that had never yet hosted a game.

      • This is a weird comment considering they are trying to get their EIS and stuff done in less than 12 months to try and get an NHL team playing by 2020.

        The city is most definitely trying to rush this through the process now that a rich guy has come to offer money. The devil is in the details and I think as details come out you see areas where the city is giving away things that they don’t need to be giving away when there is another person with money to burn in a better location

  5. Hansen’s most recent offer (well, the top-lines because nobody has released the full 10 pages he supposedly sent) is somewhat similar to the AECOM 2015 study (that Chris Hansen paid for, per the MOU) of KeyArena reuse Senario C.

    Scenario C: KeyArena is repurposed as an entertainment venue but not one that would necessarily serve its current tenants in a full-bowl configuration. This also assumes that a new arena is built in SoDo

    Downtown Seattle is lacking a mid-sized arena as well as a larger theater (both in the 5,000- to 7,000-seat range).

    Mid-sized, secondary arenas: many larger markets have such a facility. While they serve a niche for smaller events, they are typically not as profitable as larger arenas.

    Scenario C includes dividing the current arena into two, separated event facilities – a smaller arena with a maximum permanent seating capacity of approximately 10,000 with a horseshoe seating bowl, and a theater with approximately 2,000 permanent seats. This reconfiguration would require the creation of a dividing wall and backstage system to acoustically separate the two venues so that multiple simultaneous events could be held.

    It looked like it would cost $149 million and be break-even as the city projected.

    Now, Hansen’s most recent proposal was for fewer seats (6,200, 3,000 for the outdoor, and 500 for the theater) and would have shared a stage with two of them, making multiple events more difficult. Maybe it’s worth exploring if he’s willing to take on the risk, but I’d certainly want a market-analysis for this size venue and a long lease.

  6. The parking garage revenue for 50 years (on a building with a 39 year lease) in an area that is only going to see a higher demand in parking needs seems like a very bad revenue stream for the city to be giving up.

    Saying that they will get equal funds (with inflation) for the parking doesn’t take into account future growth in demand and it ignores that they would get all of the funds if Hansen was able to build his Sodo arena.

    That is not a minor kick back to the developer and one that people in Seattle killed Sacramento for doing a few years ago.

    • Where do you see 50 years ? I see a call-out on pg 34 to the 5th avenue north garage that leased parking operations/revenue to a different company from 2008 to 2058 in a 50 year lease.

      The parking lease also makes the company responsible for operating expenses, so it’s not all gravy and requires some background in how profitable parking has been at the Seattle Center to estimate.

  7. Is there anything about how that traffic mitigation money is going to be used? LQA/Seattle Center is very developed as it is, I don’t see how they’re going to fit in more roads or pay for adequate public transit with that kind of money.