SEATTLE – NHL Seattle filed an application for an American Hockey League (AHL) expansion franchise that would begin play by 2021 in a new $250 million, 10,000-seat arena in Palm Springs, California.
The arena would be a joint venture between the California-based Oak View Group (OVG) – which is also undertaking a $930-million rebuilding of KeyArena for this city’s incoming NHL franchise – and the Palm Springs-based Agua Caliente Indian tribe. The privately financed, 300,000-square-foot arena would be built on 16 acres of tribal land in Palm Springs and serve as home to the primary minor league feeder club for Seattle’s soon-to-be NHL team.
NHL Seattle had also looked at the possibility of acquiring and relocating an existing AHL team but will instead look to start up a new one if the AHL approves the application. The most recent AHL expansion franchises sold in the $5 million range.
“Palm Springs, the idea of a new arena, a thriving community with snowbirds, connected to the other teams in southern California, there were a whole bunch of things that ultimately gave the partnership confidence that this was the right thing,” NHL Seattle president and CEO Tod Leiweke said Wednesday. “We’re not there yet. All we’ve done is file an application.”
But Leiweke said NHL Seattle had worked together on the application “in consultation” with AHL officials to “best position the application.” He anticipates the potential for a strong rivalry between the new club and the San Diego Gulls franchise only 140 miles away.
Leiweke’s older brother, OVG co-founder Tim Leiweke, said the new arena will be the most expensive built as an AHL-specific venue. Leiweke said the projected $250 million cost is part of the commitment by billionaire David Bonderman – an OVG partner and principal owner of Seattle’s NHL team – to put a “best in class” hockey franchise in place from the minor leagues on up.
“We want to recreate and redefine how you ultimately build the perfect system,” Leiweke said. “We have a chance to redefine the AHL experience and it starts with a brand-new arena and a brand-new training center.”
Of prime importance to the team’s ownership, he added, was that the new arena will be a quick flight away from Seattle and allow for easy player transfers between the NHL and AHL squads. It will also enable Seattle hockey fans, many of them with retirement homes and part-time residences in Palm Springs – or who simply vacation there in hotels – to see up-and-coming minor-leaguers play on a regular basis.
A number of former NHL players, Hall of Fame goaltender Grant Fuhr among them, also live in the Palm Springs area and provide an immediate base of support for the sport there. So does the major Los Angeles population center just a two-hour drive away.
Former NHL Seattle senior adviser Dave Tippett had been the group’s point-man on identifying the best AHL location before leaving last month to become head coach of the Edmonton Oilers. The potential sites were narrowed down to Palm Springs and Boise by last January, while all that remained was OVG securing the needed land and partners for the arena to be built.
But while liking the Boise location, the arena there serves the Idaho Steelheads of the mid-tier minor league ECHL and facilities would have needed upgrading. In the end, NHL Seattle officials felt nothing would compare with the scope of the arena project planned for Palm Springs.
Helping cement the deal to build the arena was an agreement with OVG partner Live Nation Entertainment to become a strategic partner and supply the new arena with a top lineup of touring music acts and premium live events.
OVG head Leiweke said Live Nation is also looking at using the arena as a rehearsal venue for major music acts preparing to head out on West Coast tours.
This latest OVG project is one of many undertaken by Leiweke’s company, which is also building a Northgate Mall training facility for Seattle’s NHL team at a cost pegged at $85 million. OVG is also building a $1 billion mixed-use extension for the New York Islanders’ planned arena at Belmont Park in Long Island, New York, and on a new music and sports venue in Milan, Italy.
Leiweke said a favorable debt market and interest rates and a $100 million investment in OVG last year by the Silver Lake Partners private equity firm has made the expansions possible despite escalating costs on the KeyArena project in Seattle. “We have the capital needed to continue to grow.”
The arena will including an adjoining building that will serve as a year-round community gathering space and the AHL team’s new training center.
“This is a unique partnership that will forever change the face of sports and entertainment in Palm Springs and the Coachella Valley,” Agua Caliente tribal chairman Jeff L. Grubbe said in a news release. “We are creating a healthy community gathering space for Coachella Valley family and visitors from around the world to celebrate, play and experience diverse entertainment opportunities in a state-of-the-art arena.”
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