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Sunday, July 22, 2012 - Page updated at 07:30 p.m.
Sodo arena proposal revives questions about KeyArena's future
By Bob Young
Seattle Times staff reporter
In its half-century history, the building now known as KeyArena has survived all kinds of challenges, from competing arena proposals to the departure of the Sonics.
KeyArena even made money last year, its first operating profit since the Sonics took their talents to Oklahoma.
But the future of the 17,000-seat, city-owned venue is in serious doubt because San Francisco businessman Chris Hansen is trying to build a new arena in Sodo that would be home, he hopes, to an NBA team, an NHL team and dozens of concerts and other events each year.
Hansen is clear. He won't be sinking his fortune into KeyArena. Bringing it up to modern standards would be prohibitively expensive, he says, and Sodo is a better location, close to freeways and trains.
History is pretty clear about what happens to an older arena when a new one with major-league tenants comes to town. In city after city, the older venues struggled and succumbed to the wrecking ball.
A few survivors are trying to hang on. The Memphis Pyramid was looked at as a potential aquarium, casino, theme park and shopping center. None panned out. It's being converted into a Bass Pro Shops megastore.
A 2006 city report said a new arena would "spell disaster for KeyArena." Competing with a new venue would be "bleak." Existing as a secondary arena, feeding off the leftovers and scheduling conflicts of a new arena would be "dismal."
Still, some see opportunity.
Hansen needs KeyArena for a couple of years.
His plan is to acquire an NBA team, start construction in Sodo and have his squad play in Key until the new palace is opened, in fall 2016 at the earliest.
In that scenario, Hansen says he would make about $5 million in improvements to Key, maybe more. Those negotiations are still to come.
And KeyArena needs help. The 2006 report said Key required at least $20 million in sprucing up to compete as a minor-league venue. The city and the financially strapped Seattle Center have few, if any, resources for such improvements.
Seattle Center Director Robert Nellams says KeyArena could become a sort of junior partner — some might say lackey — to a Sodo arena.
It could be reconfigured as a 7,500-seat arena and compete in that niche, Nellams said. It could be managed to some degree by the Sodo folks as a way to attain efficiencies and sidestep cutthroat competition. A similar model has worked in Los Angeles, Nellams said.
Defunct older arenas competed rather than cooperated with new venues, he explained.
"I think Robert is expressing a hope," said City Councilmember Tim Burgess. "And you know what they say, 'Hope is not a strategy.' "
Hansen's proposal has, though, revived questions about KeyArena's purpose and future strategy. Ideas are emerging. The Seattle Storm owners are talking about bringing more events to KeyArena, such as the PAC-12 women's basketball tournament, which will come there next year.
"We will continue to invest and grow our business in different ways," said Storm co-owner Lisa Brummel.
KeyArena's future is fluid, Brummel said, as decision-makers, tenants, neighbors and taxpayers mull its fate.
"That's still a huge open question we're wrestling with," Burgess said.
Affection for Key
At a recent North Seattle town-hall meeting, several in the audience asked why Hansen couldn't use KeyArena in the long-term.
After all, the city spent $75.7 million renovating it in 1995, leading NBA Commissioner David Stern to pronounce it a "beautiful building." And, this is Seattle; why aren't we reusing KeyArena like a shopping bag?
The short answer is that KeyArena isn't all they think. The 1995 remodel was shortsighted in its attempt at frugality.
Ten years after the renovation, Sonics executives said it was just phase one and $200 million more would complete the job to make it NBA-ready. The lack of public support for the redo led to the Sonics' sale and move.
When the city studied KeyArena's place in the national market six years ago, a committee arrived at some expensive conclusions.
KeyArena was about half the size of the average NBA arena. It lacked space for amenities such as shops and bars found in other modern buildings.
There were other issues. To preserve KeyArena's signature roofline — a feature from its construction for the 1962 World's Fair — the 1995 renovation kept within the arena's existing footprint and expanded its space by digging down 35 feet. That created a host of logistical problems for KeyArena, for example, making it harder to load show equipment in and out.
To make the arena major-league worthy, it likely would have to be demolished, Nellams said.
"There is no plan to bring Key to viable standards that does not involve demolition," Hansen said.
Hansen estimates the price for such a rebuild at $500 million, slightly more than the Sodo arena. And he'd have to do it. "The NBA will not allow us to move in and the NHL is not going to allow us to bring franchises there" without a major rebuild, Hansen said.
Even then, the traffic and lack of parking near KeyArena present problems, Hansen said.
Mayor Mike McGinn tried to steer Hansen to Key, even suggesting he could have it for almost nothing. (McGinn aide Ethan Raup emphasizes it would be illegal for the city to give away Key.) But Hansen wasn't interested.
The proposed agreement with Hansen is purposefully vague on Key's future, Raup said. "We didn't want to jump to conclusions before the citizen-advisory commission and others had a chance to weigh in."
Nellams initially suggested a sweeping "KeyArena for the Next 50" process that would take 10 to 12 months, involving studies and consultations with tenants, concert promoters, staff and neighbors.
But Raup said it would be unwise to wait that long for the proposed agreement with Hansen, in part because investors could find another site outside of Seattle.
The city-appointed Seattle Center Advisory Commission will try to come up with a very abbreviated version of Nellams' process by the end of this month, said Angela Gobar, commission vice-chairwoman.
Jean Godden, chairwoman of the council's Seattle Center committee, said she wants the agreement with Hansen to be more specific about KeyArena's future.
One thing the proposal does acknowledge is that tax revenues generated by new teams playing at KeyArena would go to the new arena, KeyArena or both.
"We'd be more than willing to roll those tax dollars right back into KeyArena for improvements," Hansen said. "But that level of detail is not worked out."
The King County Labor Council has urged "adequate public funding" to modernize KeyArena.
No one in City Hall is suggesting KeyArena be demolished or ignored. "It's an existing city asset, and we have a responsibility to keep it going," said Nathan Torgelson, city project manager for the Sodo arena.
Hansen said he's fine with existing KeyArena tenants — the Storm, Seattle University basketball and the Rat City Roller Girls — staying there or coming to the new facility. "We're not trying to make decisions for anybody here," he said.
Bill Hogan, SU athletic director, said he's weighing options. "We've thoroughly enjoyed the Key," Hogan said. "We also recognize that a new arena with an NBA team could significantly improve our recruiting, which is a key part of our long-term plan.
Brummel, the Storm co-owner, said, "we don't have a preference" at this point, but "we do like KeyArena, it's our home."
She noted that Hansen has hired a consultant who has come up with three preliminary options for Key: Reinvent Key as a smaller arena; convert it to an exhibition or conference center; or turn it into a theater with 6,000 seats, similar to a House of Blues concept.
Only the first option would suit the Storm, Brummel said.
Nellams said he's confident that could work.
He points to Staples Center in Los Angeles, which has NBA and NHL teams, and the 7,000-seat Nokia Theatre next door to relieve scheduling pressures.
"There seems to be some sweet-spot at the midrange level," Nellams said. "There are a ton of shows in the 5,000- to 7,000-seat range ... a lot of family shows, for instance, a lot of acts on their way up."
That would mean, though, competing with the 7,000-seat WaMu Theater at CenturyLink Field, as well as ShoWare Center in Kent and Comcast Arena in Everett.
KeyArena does that now, Nellams said.
A partnership between a new facility and KeyArena might have Hansen's group running both buildings, or a management firm hired by the city doing the job.
Carl Hirsh, the mayor's arena consultant, said a cooperative arrangement worked for years in Philadelphia after a new arena was built next to the old Spectrum. The Spectrum hosted arena football, indoor soccer and a lot of family shows, he said, before it was demolished in 2010 and the site became entertainment center Xfinity Live!
"We think we can improve the city's profitability on Key above what it is today," Hansen said of Key's $300,000 operating profit last year.
And speaking of opportunities, the 1995 naming-rights deal that turned the Seattle Center Coliseum into KeyArena expired in 2010.
The city presented a renewal package to KeyBank that year, according to McGinn spokesman Aaron Pickus. KeyBank declined to renew, but let the city continue to use the name.
The city pursued other leads, Pickus said, but they didn't pan out.
"The naming rights for KeyArena are wide open and available," he said.
News researcher David Turim contributed to this report.
Bob Young: 206-464-2174
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