Council approves Key Arena MOU

By a 7-1 vote, this afternoon the City Council approved the proposed MOU with Oak View Group to renovate and manage Key Arena.

Council member Rob Johnson telegraphing his vote on the Key Arena MOU

Council member Lorena Gonzalez was absent from the meeting, and Council member O’Brien was the only “no” vote. Even Council member Sawant voted for it, though she expressed mixed feelings: she liked the labor protections and that the city’s revenue stream is protected, but disliked that the city is giving a massive tax break to a large corporation that, as she saw it, it would never give to ordinary citizens.

Council member Mike O’Brien

O’Brien was the only snag in an otherwise upbeat stroll towards approving the MOU this afternoon. He had missed a key committee meeting in mid-November when the Council deliberated on further amendments to the MOU that they wanted the city to negotiate with Oak View Group. One of the amendments discussed and rejected would have removed that exclusivity clause in the agreement that reads:

“The City shall not provide financial support, benefits, or incentives (other than those that are generally available to any potential developer) with respect to the construction of any live entertainment venue with a capacity of more than 15,000 seats within the jurisdictional boundaries of the City of Seattle.”

O’Brien stated that while he in general doesn’t think the city should be extending a tax break to projects like this, he didn’t want to prevent the city from having the flexibility to negotiate such an arrangement for the entire 44 years of the agreement with OVG.  HIs amendment left Sawant truly torn: generally in favor of preventing the city from negotiating financial advantages for corporations, but unwilling to give Oak View a “veto” over city negotiations with other parties for four decades.  In the end she sided with O’Brien on his amendment, but the other six Council members all voted it down. Council member Juarez, the co-chair of the Arenas committee and key shepherd of the MOU through the Council process, cited her 31 years as an attorney to argue that the exclusivity clause is a normal and expected part of this kind of agreement, and in fact protected the city by ensuring the strength of the partnership with OVG. “Why would we want another arena to compete with us?” Juarez asked. “It’s not OVG versus us. If OVG makes money, we make money.”

Council member Debora Juarez

Without his amendment to remove the exclusivity clause, O’Brien felt he couldn’t support the MOU, though he hoped that in the future he would be able to support the final “transaction documents” to be negotiated based upon the MOU. Nevertheless, his seven colleagues all voted for it and sent it on to the Mayor’s desk for final ratification.

This afternoon Mayor Durkan signaled her intent to sign it:

“I’ve said consistently that I’m committed to bring back our Sonics, recruit an NHL team, and invest in our City. Under this plan, arena construction is 100% privately financed and will provide good family wage jobs for decades to come. Nothing in this MOU precludes other private investors from privately financing other arenas in Seattle, but it does establish a pathway to making Seattle Center vibrant for future generations. I commend the leadership of Councilmember Juarez, Council President Harrell, and Councilmember Bagshaw and look forward to reviewing and signing the MOU later this week.”

Little was said today about Chris Hansen’s competing proposal to build a new SODO Arena, other than Council President Harrell noting that the MOU between Hansen and the city expired yesterday. Hansen still has a pending application for a vacation of part of Occidental Avenue in order to make room for his stadium. If he were to receive the street vacation, which would need to be approved by SDOT and the City Council, he could still build his stadium despite the MOU with Oak View approved today; Hansen has already modified his original plan so that it would no longer require public financing. Under Mayor Murray, SDOT had dragged its feet for several months on Hansen’s street vacation request; it’s doubtful it will get better treatment under Durkan’s administration.

After the meeting concluded, I asked Juarez how she felt about the result. Her reply, in classic Juarez style:

“I’m just glad it’s over. It’s like being pregnant and having a kid. I’m just glad it’s frickin’ done.”

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