AEG Group Pulls Out Of KeyArena Project
Seattle Partners, an investor group that includes AEG, withdrew its bid to renovate Seattle’s
KeyArena At Seattle Center – KeyArena at Seattle Center
Seattle Partners was one of two groups to submit proposals for renovation of the arena. Oak View Group was the other group to submit a proposal — a $564 million plan — and has appeared to be the favorite in the process.
In a letter to Seattle Mayor Ed Murray , Seattle Partners says it believes it has the best plan, but raised significant questions that the project can be completed by either group.
“We fear the City is driving toward an unrealistic financing structure, and we believe the City has failed to conduct a sufficiently thorough, objective and transparent process to properly evaluate the respective strengths and weaknesses of the two proposals and, most significantly, to identify the proposal best positioned to deliver a project consistent with the community’s interests,” the letter read.
They were strong comments about the city’s handling of the process considering AEG has been in charge of operations at the city-owned facility for more than a decade.
Despite not being considered the favorite, it was a surprising decision by Seattle Partners to withdraw with the city likely to announce its choice in moving forward on KeyArena within the next week.
The city had originally said it would choose a proposal by June 30 on which group to enter into negotiations with on the KeyArena remodel, but that date has been pushed up.
Seattle Partners said it has sought feedback from city officials and from an advisory committee on ways to improve its proposal, and that a request for a “best and final offer” from all bidders was refused.
“We have seen little indication of the collaborative and iterative process we were told to expect and is typical of such requests for proposals,” the letter read.
Concern about the proposal from Seattle Partners centered on their request to use $250 million of the city’s bonding capacity to fund the project and a design that called for stretching of the arena’s roofline to make the engineering of their plans functional.
But Seattle Partners also noted that aspects of Oak View’s financial plan have yet to be released and were redacted from the proposals that were made public.
“We have strong reservations about whether that proposal can be successfully achieved consistent with the City’s best interests,” the letter said.
“If the City elects to proceed with that remaining proposal, to protect the public interests of Seattle, it is imperative that you closely and diligently monitor the process to ensure that Oak View Group is held accountable for all elements of what it has very publicly promised to the citizens of Seattle.”