A renovation for Seattle’s KeyArena is increasing in cost from $600 million to $700 million, but developer Oak View Group and its partners will cover cost overruns and are expected to name a contractor for the project in the coming days.
The $100 million increase comes from “changes in the construction market” and a decision by OVG to mine a tunnel near the building as opposed to digging a cut and cover tunnel, which will “minimize impacts to the neighborhood” according to a Seattle Times article from last week.
According to the MOU signed by Seattle Mayor Jenny Durkan in December, OVG is responsible for the entire cost of the project, including the additional spending and budget increases. The group led by OVG founder Tim Leiweke will use both private equity and debt financing to pay for the arena renovation, which is scheduled to be completed by October 2020.
The initial term of the agreement is 39 years with two eight-year renewal options for a total of 55 years and OVG will pay the city $2.8 million in annual rent and reimburse the city if revenues drop below $2.24 million. OVG has pledged $40 million toward a city fund for transportation problems that affect nearby residents, $20 million for local non-profits and funding to relocate an adjacent skatepark.
The building is set to host its final event Oct. 5, a preseason NBA game between the Sacramento Kings and the Golden State Warriors, before the keys to KeyArena are handed to OVG on Oct. 15. A final environmental impact statement comes out at the end of August.
Leiweke’s brother Tod Leiweke is leading efforts to bring an NHL franchise to Seattle and told KOMO news a recent meeting with league commissioner Gary Bettman showed “things were moving in the right direction.”
We showed up at his office with a number of open issues, and we left his office that day with very few open issues,” Tod Leiweke said. “He’s [Bettman] very, very encouraged by what he sees. He knows that we have experienced hands at work here and he’s cheering us on.”
Fans were hoping for a June announcement that the NHL would be expanding to Seattle, but Bettman has tabled the discussion until the next NHL Board of Governors meeting in September.
“We believe that all of this can happen by 2020 and that’s our plan and we’re building accordingly. We’re driving the business, the decisions for puck drop 2020,” Tod Leiweke told KOMO, noting that the renovation will increase KeyArena from 400,000-sq.-ft. to 750,000-sq.-ft. with crews digging 15 feet into the ground without hurting the roof structure, which received historic landmark status last year.
“We’re going to build this building in the most-responsible way possible,” Tod Leiweke told KOMO. “The roof stays, and there’s a lot of things we can do to contain the construction within and under that roof.”