Group interested in KeyArena renovation for NBA, NHL in Seattle

About 15 months ago, a top executive with the AECOM architectural firm met in Chicago with a member of the Madison Square Garden Company to discuss ongoing developments at KeyArena.

David Stone, an associate principal at AECOM, had just finished overseeing a KeyArena study that concluded the venue could be re-furbished for NBA and NHL use at a cost of $285 million. Stone mentioned the study to his MSG counterpart, who was in Chicago overseeing a joint venture the two companies were involved in.

Documents obtained by The Seattle Times via public-records requests show Stone wrote Seattle city officials the following day that the MSG representative was interested enough in the AECOM study and KeyArena to “take it back to his bosses in New York City.”

That initial interest has morphed into interest in a full-scale KeyArena remodel involving a new sports and entertainment conglomerate headed by Tim Leiweke, the brother of former Seahawks president Tod Leiweke.

A city-hall source has confirmed that the Los Angeles-based Oak View Group, founded last November in a partnership between Leiweike and entertainment mega-manager Irving Azoff, is interested in developing KeyArena into a multi-purpose facility that could handle NBA or NHL games if teams become available.

Azoff is partnered with MSG, and Leiweike has serious NHL and NBA roots, having served as president and CEO of Maple Leaf Sports and Entertainment in 2013 and 2014, which owns the Toronto Maple Leafs hockey team and Toronto Raptors NBA franchise. When the Oak View Group was formed, it took on MSG as one of its first clients.

The idea of a KeyArena renovation apparently was sparked by an August 2015 meeting in Chicago in which AECOM executive Stone broached the subject of a KeyArena renovation to several MSG officials. Stone was fresh off presenting his firm’s KeyArena findings to Seattle politicians and had been advised to report any outside interest back to city hall.

“It came up with them,” Stone said in a telephone interview Thursday. “There were a few staffers there.”

Stone knew MSG in 2014 had renovated The Forum in Inglewood, Calif. – home to the NBA Los Angeles Lakers and the NHL Los Angeles Kings before the Staples Center opened.

“The Forum comparison is why I kind of thought of it in the first place,” Stone said. “I had seen an article about the Forum and how MSG was, in theory, conceptually interested in replicating that in other markets.”

The Forum was rebuilt into a venue ranging from 7,000 to 17,800 seats for concerts, boxing, awards shows and other non-team-sports events. According to Stone, the highest-ranking MSG official at the meeting felt KeyArena, under the right circumstances, could be repurposed that way.

An email from Stone was sent the following day to AECOM’s contact with the City of Seattle, Sara Belz, advising the MSG contact felt KeyArena was a good option for “an LA Forum-like option.”

Belz forwarded the information on to Chris Gregorich, the top aide on the arena dossier for Seattle Mayor Ed Murray. Two months later, Leiweke and Azoff formed the Oak View Group, and a city-hall source confirmed the company has held multiple discussions on KeyArena with city officials.

Of keen interest to the group, the source said, is that it believes it can make KeyArena a profitable multi-event facility in the event pro teams do not become available. But if the NBA and NHL is interested, the source said, the Oak View Group would want the arena to be convertible for those sports.

The Mayor’s office is expected to issue a Request for Proposals to renovate the facility by December, according to the city-hall source.

Besides the Oak View Group, facilities manager AEG also has expressed interest in renovating KeyArena. Oak View CEO Leiweke is a former AEG president and CEO, but it’s not known whether that company’s interest in renovating would be as an Oak View partner or competitor.

AEG is a global leader in arena construction and management and manages marketing for KeyArena. AEG officials have met with the city since 2014 to seek updates on the AECOM study and explore alternatives to entrepreneur Chris Hansen’s arena proposal in the Sodo District. The AECOM report listed several options for KeyArena’s future, the NBA and NHL facility being among the few that could turn a profit.

City officials suspect the seriousness of the KeyArena talks is what prompted Hansen to go public this week with plans to drop his pursuit of public funds for a Sodo arena in favor of an all-private venture. Hansen had been in limbo since the Seattle City Council last May voted 5-4 to reject his request to obtain part of Occidental Avenue S. so he could build a Sodo arena.

A request by Hansen for a new vote on vacating Occidental is not expected to be reviewed by the council until early next year. Meanwhile, the city is expected to seek bids on renovating KeyArena, an option it previously said had been legally blocked by a Memorandum of Understanding (MOU) it had with Hansen on a Sodo venue.

Hansen’s new all-private proposal would nullify the MOU and free the city’s hands. Hansen already is said to have given the city permission to explore the KeyArena site further.

AECOM first informed city officials in November 2014 that, despite previous studies saying an NBA/NHL overhaul of KeyArena was impossible, the venue could indeed be modified for pro sports by rotating its playing surface by 45 degrees. Later, the firm pegged the cost of such an overhaul into a fully modernized facility at $285 million and said the city could turn yearly profits from the venue.

AECOM likened the potential of a renovated KeyArena to that of the new Golden 1 Center in Sacramento, a smaller-scale, ultra-modern facility. And AECOM was well-versed on the Golden 1 center – having designed the $557 million home of the Sacramento Kings that opened last month.

“I think we have a responsibility to really take a look at our infrastructure and our existing facilities and see what’s feasible,” AECOM engineer Ryan Sickman, who helped produce the KeyArena report, told The Seattle Times this year. “Without pulling the plug and building new every single time.”

NBA commissioner Adam Silver told The Seattle Times less than two weeks before last May’s city council vote on the Sodo project that his league remains open to a KeyArena remodel.

While the Sodo project’s political proponents and some sports fans supporting Hansen have downplayed the potential for a full scale KeyArena renovation – claiming nobody was offering to pay for it – behind-the-scenes talks have continued since well before last May’s council vote.

Port of Seattle commissioner John Creighton said this week that his organization offered numerous times to help the city explore a KeyArena renovation before the Sodo vote. Creighton said his staffers contacted city council member Sally Bagshaw and other city officials in hopes of exploring Sodo alternatives.

“The city came back to us and said ‘We can’t do anything while the MOU remains in effect,’ ” Creighton said. “They said, ‘While the MOU remains in effect, we’re committed to the Sodo site.’ But if we move past the MOU – if the MOU is terminated – then we can have a frank, public, regional discussion as to what site makes sense in terms of bringing the Sonics back to town and protecting and maintaining a strong maritime industrial base.”

The city told the same thing to Los Angeles real estate magnate Victor Coleman in August 2015 when he tried exploring KeyArena as a potential site for an NHL team. In August 2015, Jeff Marks, a Coleman representative, emailed Mayor Murray’s arena aide Gregorich that: “we are ready to move forward with this (KeyArena) option, if viable.”

Marks indicated in an email that Coleman’s group had been in contact with AEG president Bob Newman about a possible KeyArena overhaul. That was the same month AECOM executive Stone first told the city of MSG’s interest in KeyArena.