KeyArena: capturing an opportunity

Friends have asked about my involvement with Steve Ballmer, Jim Sinegal and John Stanton in remodeling KeyArena and keeping the NBA in Seattle.

We want to help keep Seattle Center from slipping over the edge, and we're worried about the effects on KeyArena without a prime NBA tenant.

We believe that NBA teams add richness to our community, like great museums, universities, the opera and theater, and other sports. Together, they help attract the most talented people to our community, who then build a better place.

My main interest is a vibrant KeyArena.

We can't compare doing nothing with the status quo, which is a moderately healthy KeyArena supported by 40 NBA games per year. Fast forward two and a half years, or sooner, and the status quo won't exist. The do-nothing option will give us — the city, county and region — a 400,000-square-foot building with 75 percent less revenue.

The building doesn't just go away. Like the empty Frederick & Nelson building in downtown Seattle in the 1990s, it becomes a barrier to the health and vibrancy of its neighborhood. The decay spreads.

Lower Queen Anne is emerging as a great urban village. Will a quiet KeyArena kill the restaurants, bars and cafes that create pedestrian life? We'd be shocked at how many would be forced to close if sales dropped 20 to 30 percent. As we say in our business, everything interesting happens at the margin.

At a time when the region shares a vision on the need to revitalize Seattle Center, I'd hate to see this supporting leg removed from the center's northwest corner.

For the $300-million renovation to make KeyArena competitive for the NBA and more musical events and conventions, our private group has offered $150 million. In professional sports, this size contribution to a publicly owned facility, both in dollars and percentage, is unprecedented. We care a lot about this community.

Some people believe the public shouldn't support pro sports. Fine. According to our plan, the public money pays for the infrastructure needed at KeyArena — with or without the NBA. That infrastructure includes more parking, seismic work, restrooms, improved loading docks and ramps, better sound systems and the like. Private dollars pay for improvements specifically related to basketball.

The real-estate group I lead headed the development, and now management, of the Pacific Place shopping center in downtown Seattle. This is how we share costs with a major tenant. We pay for the infrastructure, which we can use at the end of a lease, and the tenant pays for its own unique improvements.

I'm asked what worries me most about KeyArena.

I worry that the community and our leaders can't fast-forward past the status quo to visualize our future options. In two and a half years, I see the community having to contribute more than $150 million in public dollars to renovate KeyArena, without having an anchor tenant or a private contribution of $150 million.

I'm also asked why we can't do this in a year or two.

First, in mid-April, the NBA will consider relocation of the Sonics.

Second, in June, the city's lawsuit with the Sonics' owners over their KeyArena lease is scheduled for trial.

For our community, having an established financing plan for a competitive KeyArena before these two events provides us with the best opportunity to negotiate for our Sonics or another team.

As Ballmer has said, "At times the moons line up."

People who have the resources are ready to dedicate them to a particular community objective. Someone has time to work on it.

Later, people become engaged in other commitments and simply can't take on more responsibilities, no matter how worthy.

The city has led the effort and is prepared to invest its resources. To complete the plan, the Legislature needed to allow the city and/or King County to collect existing taxes for the last $75 million. These dollars would not deplete state funds. In fact, the plan would generate about $40 million in additional dollars for the state's coffers over the life of the lease.

The state passed the ball back to the city, without giving it the tool to collect the taxes in its own district. While the city will look hard for a source for the last $75 million, it's probably impossible without state action.

I realize the timing isn't perfect. It never is. In 1995-96, we were fortunate to have Nordstrom willing to sink more than $100 million into a new store, if others did a number of things. Luckily, under then-Mayor Norm Rice's leadership, the community rallied.

In 2001-02, we were fortunate that WaMu wanted a new headquarters that facilitated the Seattle Art Museum's expansion downtown. The timing was horrible for SAM. It had just embarked on the Olympic Sculpture Park — a fabulous addition to the city. Fortunately, SAM's leadership saw through the unfortunate timing to capture the opportunity. The city benefited.

Is this a similar opportunity? I hope that, as a community, we don't look back at a hobbled KeyArena and say, "I wish we'd captured that opportunity when. ... "