Key Arena renovation moves into the fast lane

Everything is lining up this week to accelerate the pace for OVG’s renovation of Key Arena to move quickly.

First: today was the deadline for filing appeals of the Final Environmental Impact Statement for the renovation project. The Seattle Times reports this evening that no appeals have been filed. That means the city and OVG have avoided weeks or months of legal wrangling over the FEIS that would prevent the project from moving forward.

Second: tomorrow morning the Council’s Select Committee on Civic Arenas meets to continue — and probably wrap up — its deliberations on the three “transaction documents” that make up the final contracts between the city and OVG for renovation and operation of the Arena.  Here’s my post from last week outlining the contents of the transaction agreements. The Council’s central staff has prepared a memo laying out the proposed amendments to those agreements, and most of it is minor, uncontroversial issues.

The amendments would do the following:

  • fill in missing exhibits and appendices to the draft documents with project timelines and other detailed lists;
  • make some miscellaneous technical changes related to the rights of financial institutions who lend money to the project using OVG’s leaseholder’s rights as collateral;
  • add the requirement that the City Council also be a recipient of any notices that OVG must provide under the agreement, along with the Mayor’s Office and the City Attorney’s office;
  • add two at-large positions to the “Giving Council” that guides the distribution of funds from the Community Fund that OVG is required to establish. The two additional positions would be approved by the City Council, and that raises the total Giving Council members to 11;
  • add a requirement that the Community Coordination Committee must be consulted with regard to the marketing plan to attract business to the Seattle Center tenants during the construction period;
  • Add a requirement that Seattle Children’s Theater must be included in the construction impact mitigation plan;
  • Require OVG to create a fund to which Seattle Center tenants impacted by the construction can apply for compensation for the loss of projected revenues.

This last item, proposed by Council member Herbold, is the only one that raises eyebrows — not so much for the idea itself, but for the lack of specifics and clarity in the requirement. It doesn’t specify the size of the fund, the process for applying or adjudicating claims, how revenues should be projected, how compensation should be distributed if claims exceed available funds, or whether there is an appeals process if a tenant disagrees with OVG’s decision.  I have inquired with Herbold’s office as to these issues, but have not yet received a reply.

In addition to the three transaction documents, there is a proposed amendment to the companion ordinance allowing admissions tax revenues to be used by the city to pay for its rent adjustment obligations under the transaction agreements. The amendment clarifies that the new allowed use applies only to the lease agreement for the Arena, and only with respect to admissions taxes generated by the Arena. It also reserves the first $1.3 million in annual admission tax revenue to be appropriated to the Office of Arts and Culture. This is just fiddling with the details; if the ordinance as a whole doesn’t pass, the city can still use general fund dollars to pay its obligations under the lease agreement.

None of these amendments substantially alter the transaction documents or either party’s ability to live up to their obligations under the agreement. As such, there aren’t any obvious deal-breakers that would derail the Council from passing the agreements out of committee tomorrow and setting them up for final approval at the full City Council meeting on September 24. That would set up OVG for a strong presentation to the NHL in early October in its bid for an expansion franchise, and if the NHL quickly grants it, then the Arena demolition could begin in December — on schedule for a grand reopening in October 2020.

It’s a bit of a surprise that there were no proposed amendments to the transportation and mobility provisions of the transaction agreements. It’s entirely possible that those are still in the works and may be either “walked on” tomorrow (though committee chair Juarez would frown heavily on that) or offered when it comes in front of the full Council for final approval on September 24th. We shall watch for signals on that tomorrow.

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