As previously stated in our blog post about potential scenarios, the two most important factors in Portland getting pro hockey are the arena situations in Seattle and Phoenix. Arena talks in Seattle heated up earlier this month, with public displays of finances and city council discussions. Meanwhile in Phoenix, it’s been all quiet on the southwestern front. This blog post will provide analysis of their current situations.
Seattle now has three groups vying for the opportunity to build an arena ready for both NHL and NBA teams. AEG (also publicly referred to as Seattle Partners) and Oak View both recently started raising awareness of their proposals to renovate KeyArena, while Chris Hansen’s group (including the Nordstrom brothers and Russell Wilson) continues to work on their SoDo site.
The city council clearly prefers the KeyArena site, which doesn’t make sense to many residents. SoDo has better infrastructure due to the Mariners’ and Seahawks’ stadiums already in the vicinity. Seattle’s only existing light rail line runs right by the site as well. The Port of Seattle must have the ear of some council members, as shortly after they vocalized their opposition to the additional traffic it would bring, the city started requesting proposals to renovate KeyArena. The Mariners and Seahawks also recently both stated that scheduling arrangements would be necessary for them to approve the site, which would undoubtedly be favorable to the existing franchises.
AEG is requesting $250 million in public funding upfront, which would work if it was the only proposal, but with both Oak View and Hansen proposing private financing (with public support coming afterwards), AEG is the least likely of the three to be selected. Hansen originally asked for public funding, but went entirely private to further the proposal. His proposal has tax breaks built in, however, so it’s not entirely private money. He hasn’t disclosed where the money is coming from either, which is a concern. As affluent as Hansen is, he isn’t a billionaire, and neither are any of his partners (unless the Nordstrom brothers have some family members backing them).
Oak View has the combination of the preferred location and (initially) private financing. They have $400 million in private equity financing, as well as a $150 million loan lined up from Goldman Sachs. The terms with Goldman Sachs also includes another $200 million available for purchasing a team to play in the arena. Public funding would be sorted out after it is built. This is the current front runner, and unless local politicians have a change of heart about redeveloping the KeyArena site, the likely winner.
The major concern is that the arena will be built without an immediate tenant. While it’s likely Seattle would be able to throw $500 million at the NHL for an expansion team without contention from any of the current owners, the timelines could result in an empty season. The arena’s existing operations group is in discussions with Pearl Jam to set up a residency (compared to Billy Joel’s frequent shows at Madison Square Garden) to fill the gap.
While Seattle is active with new developments, Phoenix is stuck in the same holding pattern ever since ASU pulled out of their proposed joint arena. Gary Bettman himself stated that the Coyotes will not remain in Glendale, but local politicians are struggling to garner public support for financing the region’s third hockey arena in 20 years. Until the ownership group proposes entirely private financing, hockey fans in Phoenix are running out of ice time.
Speaking of the ownership group, Coyotes majority owner Andrew Barroway is reportedly trying to buy out the other stakeholders. He hasn’t publicly stated his motivation, but singular ownership makes it easier for the team to move, so this is good news for hockey in Portland. A sudden move all but guarantees Portland as the new location, because the Seattle arena would not be ready yet. Seattle’s ownership would not want to pay the $500 million expansion fee if the Coyotes are for sale for less; the timing of the Coyotes’ seemingly inevitable departure will factor into their destination. It’s also possible the NHL might force Seattle’s hand to expansion or nothing in order to get to a round number with 32 teams.
The fact that Seattle’s arena isn’t an overnight slam dunk and Phoenix’s majority owner wants total control are steps in the right direction for the NHL to come to Portland. If we don’t get an NHL team from Phoenix, however, we would be a shoo-in for Seattle’s AHL affiliate, so pro hockey is likely on its way. Stay tuned for which league lands a franchise in Portland.