Dive Brief:
- One of two bidders for the renovation of the KeyArena in Seattle has withdrawn its $521 million bid from consideration after expressing doubts about the way the city has handled the bidding process, according to KING 5.
- Seattle Partners, a joint venture between arena company AEG and Hudson Pacific Properties, wrote a letter to the mayor and city council criticizing the city's push for an "unrealistic financing structure" and asserting that officials had not thoroughly compared its bid with that of competing company Oak View Group. Oak View Group's bid is $564 million.
- Seattle Partners said the city displayed a lack of transparency when it came to Oak View Group's proposal, as it did not release financial details of the company's bid like it did with Seattle Partners'. Seattle Mayor Ed Murray said he expects to choose a bid to recommend to the city council by June.
Dive Insight:
The city of Seattle issued a request for proposals back in January with an eye toward hosting an NBA team — to replace the SuperSonics — or an NHL team. Conditions of the proposal required that any potential developer would have to be able to finance the project and then lease the arena from the city in return for naming rights revenue, sponsorships, ticket sales and other facility revenue sources.
Due to the historic significance of the KeyArena, it likely cannot be demolished, forcing any potential developer to work within the building's existing shell.
This isn't the only Seattle project to get off to a bumpy start. In March 2016, officials overseeing the Washington State Convention Center terminated the joint venture of Skanska and AECOM Hunt from the project because they said the team was not aggressive enough in trying to save money. Skanska–Hunt and the WSCC reached an $8 million settlement for the joint venture's work completed before the termination.
WSCC manager Pine Street group hired the joint venture of Clark–Lease Crutcher Lewis to take over the convention center project. The cost of the project went up from $1.44 billion to $1.6 billion, but officials said construction is still expected to be complete in 2020
