Identification and
Evaluation of Options for
the Future of KeyArena
Prepared for:
The Seattle City Council
June 2015

 AECOM

TABLE OF CONTENTS

1.

INTRODUCTION AND EXECUTIVE SUMMARY ........................................................................... 8
INTRODUCTION........................................................................................................................................... 8
EXECUTIVE SUMMARY ................................................................................................................................ 9

2.

OVERVIEW OF KEYARENA AND SEATTLE CENTER .............................................................. 17
THE FUTURE OF KEYARENA ..................................................................................................................... 17
KEYARENA OVERVIEW ............................................................................................................................. 18
SEATTLE CENTER OVERVIEW ................................................................................................................... 29
OTHER RELEVANT ISSUES ........................................................................................................................ 30

3.

MARKET ANALYSIS: SPORTS AND ENTERTAINMENT........................................................... 32
CURRENT KEYARENA TENANTS ................................................................................................................ 32
THE COMPETITIVE ENVIRONMENT FOR FACILITIES AND EVENTS .................................................................. 34
OTHER STAKEHOLDER FEEDBACK ............................................................................................................ 44
COMPARABLE FACILITIES ......................................................................................................................... 46

4.

NBA AND NHL OVERVIEW .......................................................................................................... 58
NATIONAL BASKETBALL ASSOCIATION ...................................................................................................... 58
NATIONAL HOCKEY LEAGUE ..................................................................................................................... 72

5.

OTHER POTENTIAL ENTERTAINMENT USES .......................................................................... 86
REVIEW OF AVAILABLE MARKETS .............................................................................................................. 86
EVALUATION OF SEATTLE ATTRACTIONS MARKET ..................................................................................... 95
ARENA REUSE PROJECTS ........................................................................................................................ 98
EVALUATION OF ENTERTAINMENT AND ATTRACTION ALTERNATIVES ......................................................... 102
SUMMARY OF MARKET ANALYSIS FOR SCENARIO D................................................................................... 114

6.

PHYSICAL ANALYSIS ................................................................................................................ 116
SCENARIO A – MAINTAIN KEYARENA ....................................................................................................... 116
SCENARIO B – WITH MAJOR PROFESSIONAL TENANT; NO NEW ARENA IN SEATTLE ...................................... 116
SCENARIO C – REPURPOSE AS AN ENTERTAINMENT VENUE ....................................................................... 131
SCENARIO D – OTHER USER GROUPS ...................................................................................................... 134
ESTIMATED COSTS................................................................................................................................. 135

7.

FINANCIAL ANALYSIS............................................................................................................... 137
SCENARIOS A THROUGH C – SPORTS/ENTERTAINMENT OPTIONS ............................................................. 137
SCENARIO D – REPURPOSING OPTION .................................................................................................... 155

8.

HOUSING POTENTIAL ............................................................................................................... 159
DRIVERS OF DEMAND ............................................................................................................................. 159
SUPPLY METRICS .................................................................................................................................... 160
DEVELOPMENT CONDITIONS ................................................................................................................... 166
WORKFORCE HOUSING .......................................................................................................................... 167
CAPACITY ANALYSIS .............................................................................................................................. 168
CONCLUSION ......................................................................................................................................... 168

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LIST OF TABLES
Table 1: Estimated Project Costs ($000s)........................................................................................................... 13
Table 2: Forecasted Annual Events for Scenarios A-C....................................................................................... 14
Table 3: Forecasted Total Annual Attendance for Scenarios A-C ...................................................................... 14
Table 4: Forecasted Revenues and Expenses for Scenarios A-C, 2024 ............................................................ 15
Table 5: KeyArena Events and Attendance, 2010-2013 ..................................................................................... 20
Table 6: KeyArena Revenues and Expenses, 2010-2014 ($000s) ..................................................................... 21
Table 7: KeyArena Subcommittee Conclusions .................................................................................................. 27
Table 8: “New Arena – Imagine the Future” Recommended Improvements ....................................................... 28
Table 9: KeyArena Five-Year Business Plan Goals............................................................................................ 28
Table 10: Tacoma Dome Events and Attendance .............................................................................................. 37
Table 11: ShoWare Center Events and Attendance ........................................................................................... 38
Table 12: Xfinity Arena Attendance..................................................................................................................... 39
Table 13: Local and Regional Amphitheaters ..................................................................................................... 41
Table 14 : NBA Arena Characteristics and Attendance ...................................................................................... 59
Table 15: NBA Arena Funding ............................................................................................................................ 60
Table 16: NBA Arena Ownership and Management ........................................................................................... 61
Table 17: NBA Franchise Financial Metrics ........................................................................................................ 66
Table 18: NHL Arena Characteristics .................................................................................................................. 74
Table 19: NHL Arena Funding ............................................................................................................................ 75
Table 20: NHL Arena Ownership and Management ........................................................................................... 76
Table 21: NHL Franchise Financial Metrics ........................................................................................................ 79
Table 22: Summary of Available Markets ........................................................................................................... 93
Table 23: Seattle Attractions Characteristics and Performance Metrics ............................................................. 97
Table 24: Results of Screening Process (1 of 2)............................................................................................... 105
Table 25: Results of Screening Process (2 of 2)............................................................................................... 105
Table 26: Estimated Project Costs ($000s)....................................................................................................... 136
Table 27: Projected Annual Events, Scenarios A-C.......................................................................................... 139
Table 28: Projected Average Paid Attendance, Scenarios A-C ........................................................................ 139
Table 29: Projected Total Paid Attendance, Scenarios A-C ............................................................................. 140
Table 30: Turnstile to Paid Attendance, Scenarios A-C .................................................................................... 140
Table 31: Average General Admission Ticket Prices, Scenarios A-C............................................................... 141
Table 32: Assumed Rents, Scenarios A-C........................................................................................................ 142
Table 33: Facility Surcharge, Scenarios A-C .................................................................................................... 142
Table 34: Ticketing Fees, Scenario A-C ........................................................................................................... 143
Table 35: Per-Capita Concessions Spending, Scenarios A-C .......................................................................... 144
Table 36: Per-Capita Catering Spending, Scenarios A-C ................................................................................. 144
Table 37: Per-Capita Program/Novelty Spending, Scenarios A-C .................................................................... 145
Table 38: Per-Event Arena Expenses, Scenarios A-C...................................................................................... 148
Table 39: Financial Proforma, Scenario A1 ($000s) ......................................................................................... 150

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Table 40: Financial Proforma, Scenario A2 ($000s) ......................................................................................... 151
Table 41: Financial Proforma, Scenario B1 ($000s) ......................................................................................... 152
Table 42: Financial Proforma, Scenario B2 ($000s) ......................................................................................... 153
Table 43: Financial Proforma, Scenario C ($000s) ........................................................................................... 154
Table 44: Preliminary Financial Analysis for Hypothetical Attraction Concepts ................................................ 157
Table 45: Attraction Concepts: National and Local ........................................................................................... 169

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LIST OF FIGURES
Figure 1: NBA Team Map ................................................................................................................................... 58
Figure 2: MSA Population by NBA Team ............................................................................................................ 67
Figure 3: 2013-18 Population Growth in NBA MSAs .......................................................................................... 67
Figure 4: 2013 Median Age in NBA MSAs .......................................................................................................... 68
Figure 5: 2013 Median Household Income in NBA MSAs (US) .......................................................................... 68
Figure 6: 2012 Number of Firms in NBA MSAs (US) .......................................................................................... 69
Figure 7: 2011 Share of Firms with More than 500 Jobs (US) ............................................................................ 69
Figure 8: 2013 City Population by NBA Team .................................................................................................... 70
Figure 9: 2013-18 Population Growth in NBA Cities (US) ................................................................................... 70
Figure 10: 2013 Median Age in NBA Cities ......................................................................................................... 71
Figure 11: 2013 Median Household Income in NBA Cities (US) ......................................................................... 71
Figure 12: NHL Team Map .................................................................................................................................. 73
Figure 13: 2013 MSA Population by NHL Team ................................................................................................ 81
Figure 14: 2013-18 Population Growth in NHL MSAs (US) ................................................................................ 81
Figure 15: 2013 Median Age in NHL MSAs ........................................................................................................ 82
Figure 16: 2013 Median Household Income in NHL MSAs (US) ........................................................................ 82
Figure 17: 2012 Number of Firms in NHL MSAs (US) ........................................................................................ 83
Figure 18: 2012 Share of Firms with More than 500 Jobs (US) .......................................................................... 83
Figure 19: 2013 City Population by NHL Team ................................................................................................... 84
Figure 20: 2013-18 Population Growth in NHL Cities (US) ................................................................................. 84
Figure 21: 2013 Median Age in NHL Cities ......................................................................................................... 85
Figure 22: 2013 Median Household Income in NHL Cities (US) ......................................................................... 85
Figure 23: Map of Resident Market Segments for Seattle Center ...................................................................... 87
Figure 24: Comparison of Available Resident Market to Seattle MSA and King County Population .................. 87
Figure 25: Historic Population Growth by County ............................................................................................... 88
Figure 26: Seattle Resident Market Age Profile, 2014 ........................................................................................ 88
Figure 27: Seattle Resident Market Median Household Income Comparisons, 2014 ......................................... 89
Figure 28: Seattle Resident Market Educational Attainment (age 25+), 2014 .................................................... 89
Figure 29: Total Overnight Visitors to Seattle, 1998-2013 .................................................................................. 90
Figure 30: Total Visitors by Origin, 2013 ............................................................................................................. 90
Figure 31: Overnight Visitors Season of Trip, 2013 ............................................................................................ 91
Figure 32: Overnight Visitors Length of Stay, 2013 ............................................................................................ 91
Figure 33: Visitor Composition, 2013 .................................................................................................................. 92
Figure 34: Overnight Visitors Educational Attainment, 2013 ............................................................................... 92
Figure 35: Overnight Visitors Household Income, 2013 ...................................................................................... 92
Figure 36: Overnight Visitors State of Origin, 2013 ............................................................................................. 92
Figure 37: Activities and Experiences, 2013 ....................................................................................................... 93
Figure 38: Aggregate Attraction Attendance per Capita by Market ..................................................................... 98

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Figure 39: Potential Attraction Concepts for Evaluation.................................................................................... 103
Figure 40: Estimate of Available SF for KeyArena Reuse ................................................................................ 103
Figure 41: Scoring for Initial Concepts .............................................................................................................. 104
Figure 42: Evaluation of Potential Attraction Concepts ..................................................................................... 106
Figure 43: Households in Seattle ...................................................................................................................... 159
Figure 44: Growth Rates, 2014-2019 ................................................................................................................ 160
Figure 45: Residential Permits in Seattle, 1998-2013 ....................................................................................... 160
Figure 46: Residential Permits by Type in Seattle, 1998-2013 ......................................................................... 161
Figure 47: Map of Developments in Seattle ...................................................................................................... 161
Figure 48: Historic and Projected Residential Deliveries in Downtown Seattle ................................................ 162
Figure 49: Renters vs. Owners, Seattle and Uptown ........................................................................................ 162
Figure 50: Renter’s Share of Income for Rent .................................................................................................. 163
Figure 51: Multi-Family Submarket ................................................................................................................... 163
Figure 52: Multi-family Submarket Inventory ..................................................................................................... 164
Figure 53: Multifamily Unit Mix in Submarket and Seattle Metro ...................................................................... 164
Figure 54: Vacancy Rates ................................................................................................................................. 165
Figure 55: Average Rent ................................................................................................................................... 165
Figure 56: Pricing at Luma Condominium Project ............................................................................................. 166

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GENERAL AND LIMITING CONDITIONS
Every reasonable effort has been made to ensure that the data contained in this report are accurate as of the
date of this study; however, factors exist that are outside the control of AECOM and that may affect the
estimates and/or projections noted herein. This study is based on estimates, assumptions, and other
information developed by AECOM from its independent research effort, general knowledge of the industry, and
information provided by and consultations with the client and the client's representatives. No responsibility is
assumed for inaccuracies in reporting by the client, the client's agent and representatives, or any other data
source used in preparing or presenting this study.
This report is based on information that was current as of June 2015, and AECOM has not undertaken any
update of its research effort since such date.
Because future events and circumstances, many of which are not known as of the date of this study, may affect
the estimates contained therein, no warranty or representation is made by AECOM that any of the projected
values or results contained in this study will actually be achieved.
Possession of this study does not carry with it the right of publication thereof or to use the name of "AECOM" or
“Economics Research Associates” in any manner without first obtaining the prior written consent of AECOM.
No abstracting, excerpting, or summarization of this study may be made without first obtaining the prior written
consent of AECOM. Further, AECOM has served solely in the capacity of consultant and has not rendered any
expert opinions. This report is not to be used in conjunction with any public or private offering of securities,
debt, equity, or other similar purpose where it may be relied upon to any degree by any person other than the
client, nor is any third party entitled to rely upon this report, without first obtaining the prior written consent of
AECOM. This study may not be used for purposes other than that for which it is prepared or for which prior
written consent has first been obtained from AECOM. Any changes made to the study, or any use of the study
not specifically prescribed under agreement between the parties or otherwise expressly approved by AECOM,
shall be at the sole risk of the party making such changes or adopting such use.
This study is qualified in its entirety by, and should be considered in light of, these limitations, conditions, and
considerations.

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1. Introduction and Executive Summary
INTRODUCTION
The Seattle City Council retained a team consisting of AECOM, J.E. Isaac Consulting, Studio 3MW, and
Magnusson Klemencic Associates to identify and evaluate a range of future options for the current
KeyArena site. This study was commissioned to help determine the future of the arena, should a new
NBA and/or NHL arena be built in Seattle in the next decade; however, the study also explores scenarios
that assume that a new arena is not built. Under all scenarios, the City’s goal is to maintain the site as
financially viable and continue to attract visitors to Seattle Center and contribute to the vitality of the
campus.
The scenarios studied in this report are as follows (all scenarios assume a level of renovations to the
arena):
•

Scenario A1: KeyArena becomes Seattle’s secondary large arena; this assumes that a new,
NBA/NHL-quality arena is built in SoDo.

•

Scenario A2: KeyArena remains as Seattle’s primary large arena, and no new arena is built
elsewhere in the city. Also, any improvements to Key would not bring it to NBA or NHL standards.

•

Scenario B1: KeyArena is renovated in such a way that it would be able to host NBA and/or NHL
tenants. This also assumes that no new similar arena is built in Seattle.

•

Scenario B2: is the same as B1 but also assumes that an NBA tenant plays in the arena.

•

Scenario C: KeyArena is repurposed as an entertainment venue but not one that would
necessarily serve its current tenants in a full-bowl configuration. This also assumes that a new
arena is built in SoDo.

•

Scenario D: KeyArena is repurposed as a different sort of attraction that remains consistent with
Seattle Center’s purpose statement.

The attached report contains the results of all research and analysis; this section summarizes the results.

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EXECUTIVE SUMMARY
KEYARENA AND SEATTLE CENTER
•

KeyArena opened in 1962 as part of Seattle’s hosting of the World Fair and was the longtime
home of the NBA’s Seattle Sonics. The facility is an important part of Seattle Center, the 74-acre
campus that hosts 12 million visitors per year. The arena has a seating capacity of approximately
17,000 for basketball, 15,200 for hockey, and 16,600 for concerts. The arena’s current tenants
are Seattle University basketball, the WNBA’s Storm, and the Rat City Rollergirls.

•

In 1994-95, the arena received more than $100 million in renovations that were aimed to maintain
and improve its ability to host major sports and entertainment events, including the Sonics. Nearly
ten years later, a $200-million plan would have brought Key to then-current NBA standards,
provide the ability to generate increased revenues, and add other improvements that were
identified as needed by tenants. However, these improvements were never made, and in 2008,
following an unsuccessful effort to secure funding for renovations, the Sonics left Seattle for
Oklahoma City.

•

In recent years, the arena has hosted approximately 100 events per year and more than 550,000
attendees. In addition to its tenants, Key hosts other major sports and entertainment events,
concerts, family shows, graduations, private events, and in conjunction with the rest of the Seattle
Center campus, events such as the Bumbershoot Festival and Folklife Festival.

•

In recent years, the arena’s operating revenues have exceeded its operating expenses, and
these profits are an important source of funding that supports other Seattle Center operations.
(KeyArena does not capture any parking revenues associated with its events, and does not
account for the full value of labor expense that it uses; both of these items are recognized by
Seattle Center).

•

In general, any modification of Key could potentially be limited by its roof, which could be
designated as a landmark. Any expansion of the arena would also be limited by the roof’s support
structure. Inside the facility, the arena is generally in good condition but is dated. Also, much of its
footprint is underutilized, particularly in the corners. The current configuration of the arena
precludes it from hosting NHL hockey but otherwise provides a great experience for other sports
and entertainment events.

•

Over the years, a number of other studies have analyzed Key’s physical condition and other
characteristics. Consistent findings include the general need to make improvements and
modernize the arena, its small size and inability to generate revenues compared to other peer
NBA arenas, and to identify funding sources for improvements.

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THE SPORTS AND ENTERTAINMENT MARKET
•

In 2012, the City executed a Memorandum of Understanding with King County and ArenaCo for
the development of a new, NBA-quality arena in the SoDo neighborhood. The 700,000-square
foot, $500-million facility would seat approximately 18,500 for basketball. Costs would be shared
by the City, County, and private ArenaCo and construction would depend on ArenaCo’s ability to
obtain an NBA franchise.

•

The Seattle area is a very competitive market for sports and entertainment venues. There are a
number of major arenas, theaters, amphitheaters, and convention/meetings facilities in the area.
Key’s niche and strengths within the local competitive environment include its downtown location,
its reserved seating capacity, and its sightlines and intimate feel.

•

Feedback from stakeholders, such as arena tenants and event promoters, include the following:
o

Key’s weaknesses and limitations include the expense of using the arena (including nonnegotiable terms and union labor), its limited concourse, backstage, rigging, and loading
facilities, and seating configuration.

o

In the future, Seattle will continue to need a major indoor arena such as Key; however,
two such arenas are not considered to be viable.

o

Downtown Seattle is lacking a mid-sized arena as well as a larger theater (both in the
5,000- to 7,000-seat range).

•

We evaluated the offerings of a range of facility types of other, similar markets:
o

Large, secondary arenas without major professional sports tenants: there is a limited
supply of these venues in the country, and they generally appear in the largest of
markets. However, they can be profitable.

o

Mid-sized, secondary arenas: many larger markets have such a facility. While they
serve a niche for smaller events, they are typically not as profitable as larger arenas.

o

Large, primary civic arenas without major professional sports: in markets without
NBA or NHL teams, there are a number of arenas that are of an NBA/NHL quality and
size. Their usage profile can be similar to that of KeyArena, and they can also be
profitable.

o

Large, primary arenas with major professional sports: NBA and NHL arenas will host
well over 100 events and one million attendees per year. While they can generate
significant revenues, the profitability of the facility to a public-sector partner will depend
heavily on the cost- and revenue-sharing agreement with its NBA/NHL tenant.

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o

Theaters: markets the size of Seattle typically have multiple theaters, and Seattle
currently has Benaroya Hall and, at Seattle Center, McCaw Hall. Theaters in other
markets typically host a wide variety of events but are not necessarily significant profit
centers.

NBA-NHL ANALYSIS
•

The average NBA and NHL arena is approximately 20 years old and has a capacity of more than
18,000 seats. (Many arenas have both an NBA and NHL tenant.) The average cost of an NBA or
NHL arena is roughly $300 million, and on average, the public sector has contributed
approximately 45 to 50 percent of costs.

•

In the NBA, neither expansion nor relocation of an existing franchise is considered likely in the
near future. In recent years, multiple teams have been considered candidates to relocate but all
have found long-term solutions in their home market. The Milwaukee Bucks are currently under
new ownership and appear headed towards a new arena solution that will keep them in
Milwaukee, but funding and site issues have yet to be determined. Should an expansion or
relocated team seek a new market, other cities such as Las Vegas, Kansas City, and others have
facilities that could accommodate a team.

•

In the NHL, similar to the NBA, expansion is not considered to be a near-term possibility, and a
number of teams have recently been candidates for relocation but none currently appear to be
imminent threats to leave their home market. However, the league’s current alignment may
provide for the opportunity to add two new western franchises through relocation. And similar to
the NBA, markets other than Seattle (including Bellevue and Tukwila in suburban Seattle) have
shown a desire to compete for franchises.

•

At the city and metro level, Seattle is a relatively small market but has a high income level,
compared to other NBA and NHL markets.

THE MARKET FOR OTHER POTENTIAL KEYARENA USES
Major findings from AECOM’s market analysis for Scenario D, alternative entertainment uses for
KeyArena, include the following:


Available Markets – Seattle resident and tourist markets are large and high quality. The majority
of the resident market population is within a one-hour drive (i.e. the primary market), which is
favorable. Income and education levels for residents and tourists are very strong, and tourism has
experienced steady growth. The tourist market is comprised of primarily leisure tourists, including
a large number of people visiting friends and relatives. There is significant peaking of tourists in

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the summer, which may result in larger than typical visitor areas for attractions to accommodate
seasonality patterns.


Existing Seattle Attractions – Seattle has a large number of visitor attractions, ranging from
major “must-see” attractions such as the Space Needle that draw over 1 million visitors annually
to many specialty museums that attract fewer than 100,000 visitors per year. Overall, attractions
in Seattle perform very well, with strong attendance, resident, and tourist market penetration
rates. The pricing at Seattle attractions is particularly strong, with pricing at even mid-tier and
specialty attractions relatively higher than other similar markets. Seattle has a broad range of
attractions as well, with most major product types represented. A review of aggregate attractions
attendance compared to market size compared to other cities indicates that Seattle is generally
well-supplied with respect to attractions. In order for a new attraction to perform well, it would
need to have a strong concept suitable for the market and be well-located.



Arena Reuse – We examined a number of arenas that were no longer used for sports or
concerts. Most that are no longer used have been torn down and replaced with mixed-use
entertainment or commercial projects. A few facilities have been re-purposed with a mix of private
real estate uses and entertainment, but there are no examples of re-purposed arena facilities that
have been repurposed without some type of market rate real estate development. Generally
speaking, purpose built facilities such as arenas do not work well for attractions, as the cost to
maintain and operate the facilities often cannot be supported by an attraction. While there are no
shortage of entertainment concepts, entertainment uses and attractions typically serve as
anchors for attracting visitors and their spending, and the value is capture through surrounding
real estate uses. It is our understanding that such uses may be incompatible with current goals
for Seattle Center and the KeyArena facility. Furthermore, the cost to develop other uses within
arenas is often prohibitive due to deferred maintenance issues and building suitability challenges.



Potential Entertainment Concepts – There are a number of entertainment concepts that may
be suitable for the KeyArena site from a mission and high-level market perspective. We evaluated
a large number of attraction concepts for compatibility with the Seattle Center purpose statement,
ability to attraction residents and visitors and contribute to the overall vitality of Seattle Center,
public access, and financial viability. We eliminated attractions which are well-represented in the
Seattle market or would not fit in the KeyArena facility. Concepts which met these criteria
included: an indoor sports adventure park, a high tech edutainment attraction, an IP-based
attraction, a STEM or “maker” center, and a dinner theater attraction.

The Seattle market is well-supplied with attractions and entertainment venues. While there could be
potential for well-located attractions that are suitable to the market, the challenge in locating within the
existing KeyArena facility is likely to be financial viability.

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KEYARENA PHYSICAL ANALYSIS


In general, under Scenario A1, we recommend an interior renovation of Key that would upgrade
its amenities and finishes. This would not involve any major reconfiguration of the facility or
seating bowl modifications.



In Scenario A2, an improvement program would be similar to that of Scenario A1 but would be
slightly more involved, due to Key’s assumed position as the market’s primary large arena. This
could include improvements to fan experience opportunities and the arena’s ability to generate
revenues, in order to more closely resemble a modern arena.



Scenarios B1 and B2 would require a more significant renovation to enable it to host NHL hockey
and/or NBA basketball. We have identified seating bowl reconfigurations that would
accommodate both types of tenants, and appropriate levels of other square footage and
amenities. We have also identified necessary modifications to the annex building on the arena’s
south side to accommodate non-gameday functions.



Scenario C includes dividing the current arena into two, separated event facilities – a smaller
arena with a maximum permanent seating capacity of approximately 10,000 with a horseshoe
seating bowl, and a theater with approximately 2,000 permanent seats. This reconfiguration
would require the creation of a dividing wall and backstage system to acoustically separate the
two venues so that multiple simultaneous events could be held.



In Scenario D, eliminating the arena bowl would leave the 360 x 360 footprint to be configured for
a number of other potential uses. The event, mezzanine, main concourse, and premium levels all
offer between approximately 75,000 and 125,000 square feet.



Estimated project costs for these scenarios, as well as demolition costs for the arena, are
summarized below.

Table 1: Estimated Project Costs ($000s)
Scenario A1 Scenario A2
Recommended Construction Budget

$

Soft Costs - 25%
Recommended Project Budget

80,398

$

20,099
$

100,497

120,006

Scenario
B1/B2
$

30,001
$

150,007

228,006

Scenario C

Scenario D

Demolition

$

$

$

57,002
$

285,008

119,817
29,954

$

149,771

80,945
20,236

$

101,181

5,393
1,348

$

6,742

Source: AECOM

DEMAND AND FINANCIAL ANALYSIS
We have evaluated the potential usage and operations of all scenarios considered in this report. The results of
our forecasts are summarized below.

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Scenarios A-C (Sports and Entertainment Facility)
•

Annual events and total attendance for the first ten years are shown below for each
scenario.
Table 2: Forecasted Annual Events for Scenarios A-C

NBA
NHL
Storm
Rollergirls
Seattle University
Concerts
Family Shows
Other Entertainment
Other Sports
Graduations
Other - Private
Other - Major/Public
Total

Scenario
A1

Scenario
A2

Scenario
B1

Scenario
B2

Scenario C

0
0
0
8
0
8
2
6
6
6
4
4

0
0
18
8
16
22
4
10
10
8
4
8

0
45
18
0
16
18
4
8
10
6
4
6

45
45
18
0
16
15
2
4
6
2
2
2

0
0
0
0
16
20
4
10
8
8
10
4

44

108

135

157

80

Source: AECOM

Table 3: Forecasted Total Annual Attendance for Scenarios A-C
Scenario
A1

Scenario
A2

Scenario
B1

Scenario
B2

Scenario C

NBA
NHL
Storm
Rollergirls
Seattle University
Concerts
Family Shows
Other Entertainment
Other Sports
Graduations
Other - Private
Other - Major/Public

0
0
0
22,400
0
40,000
6,000
18,000
24,000
27,000
1,200
24,000

0
0
72,000
22,400
24,000
242,000
14,000
47,500
60,000
36,000
1,200
48,000

0
675,000
72,000
0
24,000
198,000
14,000
38,000
60,000
48,000
1,200
36,000

720,000
675,000
72,000
0
24,000
165,000
7,000
19,000
36,000
24,000
600
12,000

0
0
0
0
24,000
60,000
10,000
30,000
40,000
64,000
10,000
24,000

Total

162,600

567,100

1,166,200

1,754,600

262,000

Source: AECOM

•

Based on a wide range of assumptions regarding rental rates, ticket prices, attendee
spending, event expenses, and other financial terms, as well as the forecasted
events and attendance, we have forecasted the future operating revenues and
expenses of each scenario, as summarized below. Forecasts are also based on the
actual operations of similar facilities and the past operations of KeyArena.
The table below shows all forecasted operating revenues and expenses of the facility
for its fifth year after improvements are made (which is assumed to be 2024).

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Table 4: Forecasted Revenues and Expenses for Scenarios A-C, 2024
Scenario
A1

Scenario
A2

Scenario
B1

Scenario
B2

Scenario
C

$740
1,440
406
452
71
197
397
240
79

$563
3,729
2,883
1,715
306
1,299
1,095
395
240

$4,394
4,847
2,291
1,411
251
0
0
749
279

$8,347
5,696
1,778
1,014
191
0
0
999
360

$955
2,054
586
642
103
259
646
240
110

$4,023

$12,226

$14,221

$18,385

$5,595

$2,285
1,371
500
125
101

$5,920
2,664
656
125
306

$7,693
3,462
2,498
125
356

$9,042
4,069
3,747
156
460

$3,260
1,467
624
125
140

Total Operating Expenses

$4,382

$9,670

$14,133

$17,473

$5,616

Net Operating Income

($359)

Operating Revenues (Net)
Rent
Reimbursements
Ticketing
Concessions
Programs & Novelties
Naming Rights
Premium Seating
Sponsorship
Other
Total Operating Revenues
Operating Expenses
Event Expenses
Non-Event Expenses
Utilities
Major Maintenance
Taxes

$2,556

$89

$912

($21)

Source: AECOM

o

Scenario A1: We project an annual operating deficit of approximately
$350,000 in Scenario A1, due to decreased overall usage of the arena, and
in particular, the loss of many higher-rated events to a new arena in SoDo.
Over the ten-year period, the estimated loss ranges from approximately
$220,000 to $510,000 per year.

o

Scenario A2: in this scenario, we project a profit of approximately $2.6
million in 2024, based primarily on the ability of Key to generate increased
revenues compared it its current condition. Over the ten years, annual profits
range from $2.4 million to $2.7 million.

o

Scenario B1: with an NHL team as an anchor tenant of KeyArena, we
estimate that the facility will approximately break even. Although the arena
would experience increased usage in this scenario, we assume that many
significant revenue streams would be captured by the team rather than the
arena. In the ten-year period, we forecast small operating profits in the first
six years (no more than $270,000) followed by losses ranging up to
approximately $150,000.

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o

Scenario B2: in this scenario, we assume the arena would benefit from the
overall additional usage of the facility due to the NBA tenant. However,
because of the NBA schedule, we also assume that the number of other
events that are more profitable to the arena will decrease. We forecast
operating profits of $725,000 to $1.1 million per year.

o

Scenario C: in this scenario, we assume a small operating profit or deficit in
each of the first ten years, ranging from a deficit of approximately $160,000
to a profit of approximately $80,000.

Scenario D (Repurposed Facility)
While attractions can be positive revenue generators, they also function to create value for surrounding
real estate. The financial analysis of alternative entertainment uses for KeyArena indicates that the
revenue that could be generated from other attraction concepts is largely offset by the additional costs of
basic operations and maintenance of the KeyArena facility. The attractions cannot support this cost, as
their business model does not support ancillary occupancy costs and cannot typically cross subsidize
other site costs. Combining two or more attraction concepts may be feasible, but the development costs
of adapting KeyArena to be suitable will also not be supported by the revenue from the attractions.


Attractions are often profitable, but do not typically generate revenues that private real estate or
commercial development can. Instead, they tend to act as anchors that enhance and create value
in surrounding properties. If the City as landowner does not create real estate opportunities that
allow this value to be captured,



There is market potential for a range of attractions and entertainment venues, but most of them
will not maintain the current KeyArena net contribution to Seattle Center.



We reviewed a wide range of attraction types, from dinner theaters to STEM incubator and
educational centers to sports adventure parks and high technology cultural attractions. While the
inputs and business models are very different for all of these, with very different attendance
estimates, pricing models, and operating margins, the “bottom line” was very consistent. All of the
attractions generated between $500,000 and $1.2 million of revenue for the City annually, before
considering the additional cost of maintaining the KeyArena facility.



After the cost of operating KeyArena is considered, the net revenue for the City was either
negative or very modest, due primarily to the cost of maintaining the arena facility for uses that
underutilize the facility. While it may be possible to combine some of these concepts to generate
more revenue or develop a strategic partnership with one entity (i.e. the Bass Pro Shops in the
Memphis Pyramid), it is our opinion that if sports or concert uses are not viable, these are not
likely to fulfill the stated goals and the City may want to consider a broader approach to assessing
site opportunities that do not necessarily involve keeping the existing structure.

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2. Overview of KeyArena and Seattle
Center
In this section, we first describe the potential future scenarios that will be analyzed for KeyArena and the
goals that will guide our analyses. We then provide a comprehensive overview of the facility and the
environment in which it operates (including the Seattle Center campus).

THE FUTURE OF KEYARENA
The primary intent of this study is to identify and evaluate a range of future use options for the KeyArena
site. In general, the City of Seattle’s goal is to maintain the arena site as a financially sustainable facility
that will continue to attract visitors to Seattle Center and contribute to the vitality of the campus.
The impetus for this study is the City’s goals as stated above and its need for information and
recommendations on the optimal future usage of KeyArena, both under current competitive conditions
and assuming that a new NBA/NHL arena is built pursuant to the 2012 Memorandum of Understanding
between the City, King County, and WSA Properties III (“ArenaCo”).
The specific scenarios to be analyzed in this study are as follows:
A. Maintain KeyArena:
A1. In a configuration that is suitable for its current basketball tenants and comparable sporting
events as well as for concerts, family shows, and other events suited to the “full bowl” layout. This
scenario assumes that the SoDo arena is built and that KeyArena would serve as a “secondary”
arena in the market.
A2. Similar to Scenario A1, but assume that the SoDo arena is not built in the next decade and
that KeyArena remains as the City’s primary large arena venue. This also assumes that any
improvements to KeyArena will not bring it up to NBA or NHL standards.
B. No new arena is built in the City for a major professional sports tenant(s) in the next decade and
KeyArena is renovated in such a way that it would be able to host a major professional sports
tenant(s).
B1. This scenario assumes that the arena secures an NHL franchise.
B2. This scenario assumes that the arena has both an NHL franchise as well as an NBA
franchise.

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C. Repurpose KeyArena in a manner that maintains the facility as an entertainment venue but not
one that would necessarily serve the WNBA, college basketball, or other tenants requiring a “full
bowl” configuration.
D. Other approaches to repurposing the KeyArena site that would be financially feasible for the
City, draw visitors to the Seattle Center, and offer consistency with Seattle Center’s purpose
statement, which is to “create exceptional events, experiences and environments that delight and
inspire the human spirit to build stronger communities.” These options would not need to
accommodate existing tenants of KeyArena.
We further assume that no other large arena that can accommodate major professional sports is built in
the Seattle area in the near future.
The criteria to be used to evaluate the feasibility of the development scenarios described above are:
•

Financial viability – Will the identified reuse options allow the KeyArena site to cover its ongoing
operational and maintenance costs (including periodic major maintenance) as well as generate
positive net revenues that are sufficient to offset some share of Seattle Center’s overall operating
expenses? What level of capital investment will be needed to implement the proposed
improvements? What funding sources exist for such improvements and can the facility generate
the necessary revenues to cover any associated debt service? Is it realistic to expect the
KeyArena site to generate a profit for Seattle Center?

•

Contribution to the overall vitality of Seattle Center – Will the refurbished or repurposed
KeyArena site complement the other elements of Seattle Center and help draw a significant
number of users to the campus’s other facilities, tenants, and services? Under what
configurations would the KeyArena site draw the most people to the Seattle Center campus?

•

Appeal to tourists and local residents – Will the proposed future use for the KeyArena site
attract local residents as well as tourists? Will it offer dynamic attractions that encourage multiple
visits from individual patrons?

•

Other criteria identified by the Consultant and approved by the City.

KEYARENA OVERVIEW
HISTORY, USAGE, AND OPERATIONS
KeyArena first opened in 1962 as part of Seattle’s World’s Fair and is located north of
downtown, within Seattle Center. The arena was the primary home of the NBA’s Seattle
Sonics until the franchise moved to Oklahoma City in 2008.

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The arena has a seating capacity of approximately 17,000 for basketball, 15,200 for hockey, and 16,600
for a typical end-stage concert. The arena’s current tenants are Seattle University basketball, the WNBA’s
Seattle Storm, and the Rat City Rollergirls. In addition to the Sonics, other past sports tenants included
multiple minor-league hockey and soccer teams.

A timeline of significant events and milestone’s in KeyArena’s history include the following:


1962 – KeyArena opened as the Washington State Coliseum for the World’s Fair.



1967 – The SuperSonics began playing at the arena.



1994-95 – The arena was renovated in order to maintain and improve its ability to host major
sports and entertainment events, including NBA games. The $104-million project included
approximately $73 million in City funds that would be repaid by increased arena revenues.
Specific improvements included an increased seating capacity, lowering the event floor by 35
feet, a permanent rigging grid, premium seating, and a parking garage.



2003 – The City and SuperSonics committed to a next round of major improvements, which
resulted in the “KeyArena Concept Plan.” The Plan identified $200 million (in 2005 prices) in
renovations that would bring the facility to then-current NBA standards, generate increased
revenues, and provide other improvements needed by tenants. However, the improvements were
never made.



Fall 2008 – Following an unsuccessful attempt to secure State funding for an arena renovation,
the Sonics relocated to Oklahoma City after being sold to a local group.



2012 – The City, King County, and a private group led by Seattle native Chris Hansen signed a
memorandum of understanding to develop a new NBA-quality arena in SoDo, near CenturyLink
Field and Safeco Field.

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KeyArena Operations
Currently, the arena has three tenants – the WNBA’s Seattle Storm, Seattle University men’s basketball,
and the Rat City Rollergirls. The facility is owned and operated by the City/Seattle Center, but has major
contracts with two private partners:


AEG – sells the arena’s premium seating and sponsorships, and staffs the suite concourse, and



Levy Restaurants – provides food and beverage service.

AEG was hired by the City in 2009, the first full year after the Sonics left KeyArena; Levy took over for
Aramark, the arena’s previous concessionaire, in 2010. Both contracts end in 2015.
Events and Attendance
The following table shows the arena’s range of annual events and attendance for the four full years since
2009 (a full year after the Sonics and Thunderbirds left the facility).
Table 5: KeyArena Events and Attendance, 2010-2013
# of Events

Average Attendance

Total Attendance

Minimum

Average

Maximum

Minimum

Average

Maximum

Minimum

Average

Maximum

Storm
Rollergirls
Seattle University
Concerts
Family Shows
Other Entertainment
Other Sports
Graduations
Other - Major/Public
Other - Private

18
5
5
15
0
2
2
5
5
1

20
6
14
21
2
6
6
7
10
4

22
8
19
27
11
14
12
10
14
6

3,543
2,827
1,153
8,406
2,858
4,042
4,481
3,672
4,027
0

4,609
4,112
1,863
9,384
2,858
4,927
5,907
4,462
5,610
293

5,532
5,110
2,793
9,924
2,858
6,866
9,259
5,525
9,180
441

63,768
14,136
13,697
126,087
0
13,731
18,518
25,704
38,353
0

92,182
26,316
25,336
193,303
6,287
28,577
37,808
32,123
53,860
1,054

121,704
34,524
33,510
241,799
31,435
56,586
60,674
45,736
72,415
2,645

Total

80

95

105

405,633

496,845

578,042

Source: City of Seattle, AECOM



Overall event levels have ranged between 80 and 105 per year, and there have been significant
variations within individual event categories.



Total attendance has also varied (between approximately 405,000 and 578,000), and individual
event types have also seen significant year-to-year changes, due to changes in both event levels
as well as average attendance.



Many smaller events use a cut-down capacity with curtaining that closes off the upper deck.



Since the Thunderbirds left the arena, the ice has been used only a few times (for an annual
Stars on Ice Show, a Disney show, and public skating).



AEG Live is currently the arena’s most frequent promoter, followed by Live Nation.

Financial Performance
The following table summarizes the arena’s revenues and expenses for its last five years.

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Table 6: KeyArena Revenues and Expenses, 2010-2014 ($000s)
2010

2011

2012

2013

2014

Revenues
$1,449
953
2,009
1,296
529
184
300
189
62
95

$0
973
2,024
1,492
826
142
0
297
15
104

$0
226
2,176
1,845
1,100
228
0
783
168
72

$0
480
2,801
2,196
1,064
292
0
885
94
308

$0
455
2,776
1,828
814
180
0
735
336
321

$7,066

$5,873

$6,596

$8,121

$7,445

$3,248
1,648
429
135
138

$3,480
1,445
413
70
156

$3,562
1,633
452
116
196

$4,380
1,719
502
121
197

$4,116
1,919
510
159
161

Total

$5,598

$5,564

$5,959

$6,919

$6,865

Net Income

$1,468

$309

$637

$1,202

$579

General Fund/Admissions Tax
Rent
Reimbursements
Ticketing
Concessions
Programs & Novelties
Naming Rights
Premium Seating
Sponsorship
Other
Total
Expenses
Event Expenses
Non-Event Expenses
Utilities
Major Maintenance
Taxes

Excluding General Fund Revenues

$19

$309

$637

$1,202

$579

Source: City of Seattle

It is important to note that these line items do not include all revenues or expenses that are associated
with the arena’s operations. Most significantly, the arena does not capture any parking revenues
associated with its events (this spending is considered a Seattle Center revenue stream, and it is not
possible to separately identify parking revenues generated by KeyArena attendees compared to other
parking lot users). In addition, the arena’s expenses do not include indirect labor from other Seattle
Center staff that could otherwise be allocated to KeyArena. According to Seattle Center and arena
representatives, the arena’s share of parking revenues would exceed its share of indirect labor used.
Also, since the arena’s debt has been retired, the revenues that repaid the debt have been removed from
its financial statements.

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Physical Characteristics

External
The physical review of the facility outlined in both
previous studies and in this assessment has
identified a couple of consistent and relevant issues.
The facility appears to have a historic roof, not in the
sense that it has been classified through a formal
process and designation as a historical landmark, but
in the sense that many in the Seattle area consider
this arena and its iconic structure to be historic in
their minds. While simply an assumption and opinion,
it was strongly believed that if a major project was to
be undertaken at the facility that it may obtain
historical landmark status as a result of that project. The roof inherently produces the next challenge in
the facility.
Due to the limiting nature of the roof structure and its supports, expansion of the building is possible, but
limited by the support structure for the roof, both along the perimeter and within the building’s geometry.
There is ample height both outside of and within the arena to renovate as well as the ability to increase
the floor plates on the two subterranean levels. Although costly to excavate and shore up the internal
subterranean levels, it is possible as the interior foundations are only holding up the seating bowl, which
acts as a separate and independent structure within the roof.
There is a good opportunity to expand upon or replace in a more efficient and connected manner, the
annex building on the south side of the facility. This area adjacent to the marshaling yard and loading
dock access to the facility could potentially provide for a cohesive annex to the facility at all levels and
provide much needed additional support spaces without taking away internal fan experience square
footage.
There are numerous planning efforts currently occurring around the Seattle Center area involving street
and transportation issues. These would need to be closely monitored and evaluated as part of any
planned capital improvements to KeyArena.
Additionally, there are issues involved with any potential project to KeyArena that would need to involve
the surrounding neighborhood, Seattle Center activities and political issues around the use of the facility
and intended use.

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Internal
Internally, the facility is generally in good condition.
The structure from visual observation appears to be
in good condition for being close to 20 years old, with
no visible spalling or water damage. Spatially, the
corners of the facility are underutilized from a fan
experience standpoint. There exists more square
footage in the current configuration in these areas
that is not being utilized. Potential for these spaces
could entail restaurants, retail, and other fan
experience or social gathering areas. These could be multi-story in nature, given the openness to the
various levels of the facility, and would engage fans throughout the various levels of the facility.
The current configuration of the arena seating bowl will prevent an NHL team from permanently
occupying KeyArena in the future. The inability to view one end of the ice rink from the seats on that end
not only detracts from the overall and expected experience of an NHL game, but it brings the usable
seating capacity to a level which the NHL as a league and the potential ownership would not recognize
enough seating revenue to make the venture worthwhile.
With that being said, the current configuration of the seating bowl and facility makes for a great concert
venue both experience-wise and from an operational standpoint. Hosting concerts here is not and would
not be in the future an issue based upon the physical configuration of the facility. The layout of the event
level could be renovated to make it more efficient. There is an excessive number of circulation corridors
and underutilized spaces on the end opposite the vehicular access to this level.
Lastly, the current state of the arena from an aesthetic perspective is out of date. The finishes reflect the
time period of the previous renovation and should be updated regardless of the scenario chosen or
pursued. The level to which the finishes are updated could vary depending upon the scenario, but they
are due for an update and modernization.

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EXISTING CONDITIONS – EVENT LEVEL
Team Spaces
Visitors
Operations
Floor/Concourse
Vertical Circulation
Restrooms
Offices

EXISTING CONDITIONS – MEZZANINE LEVEL

Team Spaces
Visitors
Operations
Floor/Concourse
Vertical Circulation
Restrooms
Offices

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EXISTING CONDITIONS – MAIN CONCOURSE

Team Spaces
Visitors
Operations
Floor/Concourse
Vertical Circulation
Restrooms
Offices

EXISTING CONDITIONS – SUITE LEVEL

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EXISTING CONDITIONS – UPPER CONCOURSE

Team Spaces
Visitors
Operations
Floor/Concourse
Vertical Circulation
Restrooms
Offices

EXISTING CONDITIONS - LONGITUDINAL SECTION

EXISTING CONDITIONS – TRANSVERSAL SECTION

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PAST STUDIES OF KEYARENA
In recent years, a number of studies have attempted to help plan the future of KeyArena. These studies,
and their relevance today, are briefly summarized below.
KeyArena Subcommittee (2005-2006)
This committee, comprised of local stakeholders and national consultants, was tasked with identifying
“what changes and improvements in the KeyArena are critical to making it more competitive in the
marketplace and financially successful for the benefit of Seattle Center and the KeyArena’s anchor
tenants/users?” (At the time, the Sonics were still a tenant.)
Table 7: KeyArena Subcommittee Conclusions
Challenges

Recommendations

Arena is undersized as an NBA arena

Meaningful efforts to retain Storm (and Sonics)

Low revenue potential as an NBA arena

Capital investment:

Operational inefficiencies

~$200M for NBA usage
$20M+ for "civic" usage
Investment should be funded by both public and private money
Public funds should consider a broad set of public values and benefits
Major reevaluation of arena if a new arena is developed
Annual investments should be made to capital reserve fund to maintain arena
Develop a transportation management plan with reliance on transit use
Maintain the roof profile and enhance pedestrian connections

Source: KeyArena Subcommittee Final Report and Recommendations

New Arena – Imagine the Future (2008)
Working with the KeyArena Subcommittee, a team of local and national consultants analyzed
renovation/improvement options for the facility, under the assumption that it remains an NBA arena for
the Sonics. Specific improvements are summarized below.

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Table 8: “New Arena – Imagine the Future” Recommended Improvements
Expansion to 730,000 SF
New clubs and other amenities
Modernize suite level; convert 24 suites to other forms of seating
Concert improvements: expanded facilities on event floor, rigging grid
Theatre configuration (5,000-7,000 capacity): new lobby and curtain system
Increase total seating capacity to ~17,500
Increase parking within footprint to ~360
Improved exterior access and views, new entries
NBA practice court/office building
Improved traffic flow
Upgrade technology and concessions infrastructure
Source: New Arena - Imagine the Future

The cost of these recommendations was estimated to be approximately $260 million, assuming that work
began in late 2008.
KeyArena Five-Year Business Plan (2011)
Following the loss of the Sonics, this document formalized a vision for the arena’s short-term future. Its
five goals are summarized below.
Table 9: KeyArena Five-Year Business Plan Goals
1. Maximize the Quality, Quantity, and Profitablity of the Event Mix

3. Improve Service Areas & Organizational Structure

A. Retain Existing Successful Event Mix

A. Develop New Guest Services Structure

B. Grow events in key categories

B. Improve Leadership Structure

C. Support Anchor Tenants

C. Increase Labor Resources as Business Grows

D. Include Community Programming
E. Achieve 140 Performances/Year (Long-Term)

4. Invest in Asset Preservation
A. Develop Reliable Sources of Funds

2. Enhance Targeted Revenue Lines

B. Establish Long-Term Asset Preservation Plan

A. Grow Sponsorship Revenue
B. Secure New Naming Rights Partner

5. Develop Plans and Funding Strategies for Redevelopment

C. Grow Premium Seating Revenue

A. Create Master Plan for Major Renovation

D. Establish Group Sales Function/Grow New Revenue

B. Secure Long-Term Funding

E. Maintain Ticketing Revenue/Box Office Services
F. New Marketing/PR Strategy
Source: KeyArena 5-Year Business Plan

Seattle Center Strategic Plan – Destination 2012 (2012)
This plan addressed a wide range of issues related to the entire Seattle Center campus, including
programming, physical improvements, and others. However, one of the eight “Strategic Initiatives” of the
plan was a "vibrant multi-purpose arena,”, as “Seattle Center’s success is closely tied to the fortunes of

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KeyArena.” Specific goals included obtaining a new naming rights partner, improved customer
satisfaction/guest services, development of new sports and entertainment offerings, upgrading
technology, and asset preservation and cultivating long-term capital funding support.

SEATTLE CENTER OVERVIEW
KeyArena is an important part of Seattle Center, which is the largest attraction in
the region. The campus hosts 12 million visitors per year, through approximately
500 public programs and 5,000 events. The 74-acre campus hosted the 1962
World’s Fair, although many buildings predate the event. Seattle Center is now
the home of more than 30 cultural, educational, and entertainment organizations. Between 1990 and
2012, $760 million was invested in Seattle Center, including more than $460 million from private sources.

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Major events held at Seattle Center (some of which use KeyArena) include Seattle Center Festál,
Northwest Folklife, PrideFest, Bite of Seattle, Bumbershoot, and Winterfest.
In addition to KeyArena, major attractions and facilities at Seattle Center include:


The International Fountain,



The Space Needle, which is one of the world’s most recognizable landmarks and is privately
owned,



The Armory, which includes theaters, the Children’s Museum, and a food court,



The Experience Music Project and Science Fiction Museum and Hall of Fame,



The Chihuly Garden and Glass Museum,



McCaw Hall, home of the Seattle Opera and Pacific Northwest Ballet,



Mercer Arena,



The Mural Amphitheater,



Memorial Stadium,



The Pacific Science Center, and



Others.

While Seattle Center is an incredibly successful and vibrant attraction, a number of improvements are
anticipated in the coming years. The Seattle Center Century 21 Master Plan was adopted by City Council
in 2008 and is a $570-million, 20-year plan that is intended to continue to improve the campus; some
identified improvements have already been made.
Other recent and future changes include:


Radio station KEXP is moving into the Upper Northwest Rooms by KeyArena,



The Cornish College for the Arts moved into the Playhouse,



Mercer Arena will become back-of-house space for the Opera,



Reuse of Memorial Stadium has been studied and changes could include the addition of
underground parking and reuse of the stadium into an amphitheater/sports field,

OTHER RELEVANT ISSUES
Based on other research and interviews completed by the consulting team, we also note the following
items that are relevant to the future of the KeyArena site:


The City’s Department of Planning and Development is developing an Urban Design Framework
with the surrounding Uptown neighborhood that aims to establish a shared urban design vision
for the future development of Uptown, similar to those prepared for other neighborhoods that
have resulted in concrete actions that advance community goals. The Urban Design Framework
is scheduled to be released to the public in the second quarter of 2015. Height and design

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changes in the Urban Design Framework will be analyzed in an environmental impact statement
prior to final adoption.


The KeyArena roof is not a historic landmark but is eligible for landmark designation.



Adding private or commercial use to the Seattle Center grounds could be difficult politically unless
there is also a strong civic benefit, and should complement, rather than compete with, existing
attractions at Seattle Center. Vertical development could also be difficult because it would likely
generate resistance from Queen Anne residents whose views of the city could be blocked.



Future uses of KeyArena should allow it to continue to be an active, multipurpose venue.



The streets surrounding Seattle Center are being “reknit” and many will change from one-way to
two-way streets.

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3. Market Analysis: Sports and
Entertainment
In this section, we analyze the market for continued sports and entertainment usage of KeyArena. This
includes a more detailed analysis of the arena’s current tenants, the local and regional competitive
environment, an analysis of major indoor professional sports leagues, the results of stakeholder
interviews, and an analysis of comparable facilities for the scenarios being evaluated.

CURRENT KEYARENA TENANTS
SEATTLE STORM
The Storm is a WNBA franchise that was founded in 2000 and has played all of
its home games at KeyArena. The team was affiliated with the Sonics until they
were sold and moved to Oklahoma City, and the Storm was purchased by a
local investment group. The WNBA currently has 12 franchises, and nine play in
their cities’ NBA arena; aside from the Storm, the other two are the Chicago Sky
(Allstate Arena in Rosemont) and the Connecticut Sun (Mohegan Sun Arena in Uncasville). The Storm’s
lease at KeyArena will expire in five years. The team has had many successful years on the court, behind
stars such as Sue Bird, Lauren Jackson, and Swin Cash, and has won two league championships.
Representatives of the consulting team met with Storm representatives, who communicated the following:


The Storm use KeyArena for approximately 30 to 34 days per year; in addition to 17 regularseason games, they also hold one preseason game, four practices, a media day, a select-a-seat
event, and the Pac-12 women’s basketball tournament.



The smallest facility that the team would want to play in is approximately 7,500 seats (which is the
capacity of KeyArena’s lower bowl).



For Storm games, the upper deck is typically curtained off, but is occasionally used.



KeyArena is a great venue for basketball, due to its sightlines, acoustics, and proximity of seats to
the court. Because of the facility and the team’s in-game entertainment, the Storm is consistently
voted as having the best home-court advantage in the WNBA.



Negative issues regarding the facility include the lack of investment in the arena, its technology,
and the lack of space for press conferences.

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•

The team can block out preferred dates within a scheduling window but often is unable to get
many of the dates they want because of graduations and the Rollergirls (who know their schedule
before the Storm do).

SEATTLE UNIVERSITY
The Seattle University Redhawks men’s basketball team also plays its home games
at KeyArena. SU basketball has a strong history and was a member of the NCAA’s
Division I until 1980, when the program was dropped to Division II. In 2009, the
program rejoined Division I and played as an independent team for three years, and
joined the Western Athletic Conference in 2012. The SU campus is less than 2.5 miles from KeyArena.
In addition to men’s basketball, SU also plays one women’s game at the arena each year, and holds its
undergraduate, graduate, and law school graduations at the facility.
Representatives of the consulting team met with SU athletics representatives, who communicated the
following:


KeyArena provides a recruiting advantage for SU because it is a former NBA arena and is
generally a strong venue for basketball.



Alumni groups that have pregame functions often use the Armory instead of KeyArena because
the arena’s F&B prices are so high.



The university is considering a new, smaller on-campus arena.

RAT CITY ROLLERGIRLS
The Rat City Rollergirls are a flat-track roller derby league that has four teams that
compete against each other, as well as an All-Star team and a travel team. In 2009, the
Rollergirls started competing at KeyArena and Kent’s ShoWare Center, after using
Magnuson Park since 2004.
The Rollergirls’ season at KeyArena consists of eight dates, from January through
August, that contain two bouts. (Other, smaller bouts are also held at their practice facility in Shoreline.)
Representatives of the consulting team met with Rollergirls representatives, who communicated the
following:


Average attendance is approximately 3,500 to 4,000 per game, but was previously higher.



The Rollergirls are the only such team that plays in an arena, and they have the highest
attendance.



The average ticket price is approximately $15 (or $17 with ticket fees).



The Rollergirls have a year-to-year lease at Key.

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

While the Kent and Everett arenas are likely better sized for their events, these arenas are more
expensive to use and farther from their fans.



Ideally, the Rollergirls would be able to practice at the same facility where their bouts are held.
They practice four times per week, in the early evening, but would have difficulty securing these
times at any arena.



Regarding KeyArena, the Rollergirls would prefer to have more seats closer to the track, and their
ideal capacity is in the 4,000 to 5,000 range.

THE COMPETITIVE ENVIRONMENT FOR FACILITIES AND EVENTS
MAJOR INDOOR SPORTS AND ENTERTAINMENT VENUES
SoDo Arena
Since the Sonics left Seattle, there have been efforts to return NBA basketball to the city. The most
prominent proposal is from a team led by Chris Hansen, a hedge fund manager who grew up in Seattle.
The Hansen proposal consists of a new, NBA-quality arena that would be built in Seattle’s SoDo
neighborhood, near Safeco Field and CenturyLink Field. The arena is planned to include approximately
700,000 square feet and have a capacity of 18,500 for basketball, 17,500 for hockey, and 19,000 for
concerts. The estimated cost of the facility is $500 million.
On October 15, 2012, the City of Seattle passed Ordinance 124019 (Council Bill 117609) that authorized
the Mayor to execute an agreement between the City, King County, and Hansen’s ArenaCo (AC). The
MOU is intended to be binding and enforceable, and sets forth the business terms of the Transaction
Documents to be negotiated.
Major points of the MOU include the following:


Purpose/Description/Term: To set forth the basic terms of the proposed agreements to build a
multipurpose arena designed to host NBA (18,500 seats) and NHL (17,500 seats) teams and
other events (19,000 for concerts). Parties anticipate site and construction costs will equal $500
million. The agreement will expire five years from the effective date or upon the earlier execution
of Transaction Documents.



Location: City and County will evaluate the proposed location and one or more alternative sites.



Cost Reimbursement: AC will reimburse City and County (hereafter CC) for development costs
up to $5 million, including up to $150,000 for a study by City to assess the future of KeyArena or
the KeyArena site.



Site/Arena Ownership/Ground Lease: AC will purchase the site and convey it to the City for
market price. AC will pay City $1 million per year as rent under a ground lease. AC will build the
arena and lease it to CC (for a nominal amount) under a Lease-Purchase agreement, and CC will
sublease it back to AC. CC have right to purchase the arena outright for the principal component

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of all lease payments under the Lease-Purchase agreement. CC will pay $200 million for
acquisition of project site and Lease-Purchase agreement payments.


CC will establish a SoDo transportation infrastructure fund using arena tax revenues to fund
improvements in SoDo and to Terminal 46.



Arena Use Agreement: AC will lease the arena from CC for at least 30 years or duration of CC
bonds, with 4 options of 5 years each. The annual payments will equal the “Annual
Reimbursement Amount,” which is the amount of CC’s bond payments.



Financing and Non-Relocation: Standard public-private financing and non-relocation
provisions. Any AC parent company and Chris Hansen personally guarantee payments to the CC.



CapEx: AC must pay for all CapEx expenses and fund a Capital Account with $2 million per year.



Operations: AC controls and is responsible for all operations cost and expenses.



NBA/NHL license agreements: AC enters into them and names CC as third-party beneficiaries.



First-Class Arena: AC will design arena as a “first-class” arena and conform to Design and
Operating Standards.



KeyArena Provisions: Terms concerning KeyArena are set forth in paragraph 17, page 26:
o

AC franchises MAY play their games in Key while arena is being built, and AC will cause
improvements to be made to Key which become the property of City.

o

City will establish a KeyArena fund (from KeyArena taxes generated by new NBA/NHL
teams playing in Key while arena is being built) for improvements to Key or new Arena,
depending on whether Storm wish to sign long-term lease for Key or new Arena. The
Parties agree to use reasonable efforts to support WNBA in Seattle.

o

City anticipates concluding a feasibility assessment of operating Key in current
configuration or one that would effectively serve Storm within 18 months of effective date.



Names: CC have approval rights over Naming Rights sponsor; AC must use best efforts to use
the name SuperSonics for the team.



Community: AC will enter into a Community Benefit Agreement (CBA) with appropriate
community organizations, and work with youth and underserved communities and offer 1,500
tickets at under $20 adjusted by CPI.



Economic Impact Study: AC will reimburse City for costs not to exceed $200,000 for an
economic impact analysis of construction and operation of the arena. The consultant will be
selected by CC and approved by AC within 25 days of the Effective Date.



Conditions Precedent and Dispute Resolution: Standard provisions regarding the obligations
of the Parties.

Tacoma Dome
The multipurpose Tacoma Dome opened in 1983 and is one of the world’s largest
wood domed structures, and is approximately 35 miles south of KeyArena. Owned

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and operated by the City of Tacoma’s Public Assembly Facilities Department, the facility is highly flexible
(65 percent of its seats are moveable) and can be configured for 5,000 seats or 23,000 seats. In addition
to the arena, the facility also includes an adjacent exhibit hall, and the arena floor can also accommodate
a full-sized football field.
While the Dome does not currently have a full-time sports tenant, it has previously had six – two hockey
teams, two soccer teams, one basketball team, and one football team. In addition, the SuperSonics
temporarily played at the Dome in 1994-95 while the KeyArena was being renovated. Other major events
held at the Dome over the years include the 1990 Goodwill Games, the NCAA Women’s Final Four, the
United States Figure Skating Championships, and NHL preseason games.

The Dome’s primary strength is its size – it is by far the largest indoor sports/entertainment facility in the
market. As a result, events that can sell more seats than Key offers will often go to the Dome, unless they
would rather be in Seattle proper. In the last two years, its major concerts have included Taylor Swift,
Fleetwood Mac, Miley Cyrus, the Eagles, and Katy Perry.
The following table summarizes the Dome’s events and attendance for a recent year.

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Table 10: Tacoma Dome Events and Attendance
# of
Events

Average
Total
Attendance Attendance

Arena Events
Amateur Sports
Community Events
Concerts
Convention/Meetings
Exhibit/Consumer
Family Shows
Religious
Other Sports
Thrill Shows
Subtotal

4
12
14
1
2
1
3
1
2

20,675
5,884
8,283
1,000
3,142
3,984
29,326
3,557
22,737

82,700
70,613
115,959
1,000
6,283
3,984
87,977
3,557
45,474

40

10,439

417,547

3
9
1
1
4
2
2
2

800
1,792
1,866
1,000
3,197
1,579
1,012
1,487

2,400
16,126
1,866
1,000
12,788
3,157
2,023
2,973

24

1,764

42,333

3

13,763

41,290

2

88

175

1

1,200

1,200

70

7,179

502,545

Exhibit Hall Events
Banquets
Community Events
Concerts
Convention/Meetings
Exhibit/Consumer
Religious
Other Sports
Trade Shows
Subtotal
Arena & Exhibit Hall Events
Exhibit/Consumer
Parking Lot Events
Trade Shows
Exhibit Hall & Parking Lot Events
Community Events
TOTAL
Source: Tacoma Dome

In recent years, the Dome has generated operating deficits but had previously been profitable (revenues
and expenses were generally in the $6-million range).
ShoWare Center
The ShoWare Center is located in Kent, Washington (approximately 22 miles
south of Seattle) and opened in 2009. The City of Kent owns the facility and
SMG is its operator. The ShoWare Center is home to the Seattle
Thunderbirds of the Western Hockey League, as well as the Rat City Rollergirls. The facility can seat up
to 6,500 attendees for hockey games and up to 7,300 for concerts and other events, and has 20 suites.
The arena can also downsize to a half-house or quarter-house configuration. The Kent City Council sold

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the naming rights to the venue to VisionOne Inc. in 2008 ($3.175M, 10 years), and the facility’s total
construction cost exceeded $84 million.

In addition to minor-league sports, the arena hosts a significant number of community/civic and business
events. Its events and attendance for a recent year are shown below.
Table 11: ShoWare Center Events and Attendance
# of
Performances

Avg.
Attendance

Total
Attendance

71
24
24
12
51

2,311
2,602
2,056
2,840
420

164,100
62,440
49,332
34,080
21,413

182

--

331,365

Sporting Events
Family/Entertainment
Graduation/Civic
Concerts
Business/Trade
Total
Source: ShoWare Center

In recent years, the arena has experienced operating deficits ranging from $400,000 to $700,000, with
operating expenses of approximately $2.5 million.
Xfinity Arena at Everett
Xfinity Arena is located in Everett, Washington (approximately 30 miles north
of Seattle) and opened in 2003. The Everett Public Facilities District owns the
venue, and Global Spectrum is its operator. Xfinity Arena can hold up to
10,000 attendees for a center-stage concert and more than 8,100 for hockey games. As a result, its
capacity is between the ShoWare Center’s and KeyArena’s. The facility has 20 suites, club seats, and the
Arena Grill Restaurant. In addition to the main floor space, Xfinity Arena is also home to the Edward D.
Hansen Conference Center and the Comcast Community Ice Rink.

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The arena currently has two tenants – the WHL Silvertips and the Tilted Thunder Rail Birds (roller derby).
In the past, minor-league lacrosse, football, and basketball teams have played at the arena. In a typical
year, the arena also hosts six to ten concerts. The following table summarizes the arena’s attendance by
event type for a recent year.
Table 12: Xfinity Arena Attendance
Event Type

Total
Attendance

Silvertips (hockey)
Stealth (lacrosse)
Concerts
Other Sporting Events
Family Shows
Trade Shows
Community Events

173,530
32,156
47,884
20,366
86,134
8,869
53,792

Total

422,731

Source: Comcast Arena

WaMu Theater
The WaMu Theater is part of the CenturyLink Field Events Center
complex and is a multipurpose venue with no permanent seating. The
facility opened in 2006 and is owned by First & Goal (developer/operator of the stadium and owner of the
Seahawks) and AEG. For concerts, the theater can accommodate 4,700 reserved seats or 7,200 people
for a general admission show.

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The theater is a temporary venue within the stadium’s Events Center and was built for $6 million
(including $2 million for acoustics). While the theater setup has few amenities, its acoustics are
considered to be excellent. Because the Events Center is heavily used by annual consumer shows, the
theater is generally unavailable for events from January through March. In addition, because the Events
Center is also used in conjunction with Seahawks games, the theater cannot be booked until the NFL
schedule is released in the spring. As a result, it has to turn down many events, which then end up in
various venues in the area, including KeyArena. (However, the theater rarely competes directly with Key
because of their size difference.)
In addition to concerts, the venue also hosts comedians, corporate and social events, and other events.
For entertainment, its niche is concerts that want to be in the city and generally attract a younger
demographic for general-admission shows, such as EDM (electronic dance music) and rising stars that
cannot yet fill a larger venue. In recent years, the theater has hosted approximately 10 to 15 concerts per
year, including major acts such as Jack White, Lorde, the Backstreet Boys, Ed Sheeran, and
Macklemore. Its average attendance has been approximately 6,300 per show, with an average ticket
price of approximately $53.

OTHER ENTERTAINMENT FACILITIES (INDOOR AND OUTDOOR)
Local/Regional Amphitheaters
The Seattle region has a strong collection of outdoor music and entertainment venues. While these
facilities do not necessarily compete directly with an indoor arena for much of the year, their presence is
particularly relevant for summer programming opportunities at an indoor facility, as well as for any
potential outdoor venues at the KeyArena site. The primary amphitheaters in the region are described
below.

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Table 13: Local and Regional Amphitheaters

Name
The Gorge
White River Amphitheater
Northwest Concert Center
Marymoor Park
Mural Amphitheatre
Chateau Ste. Michelle Winery
Woodland Park Zoo
Mountain View Plaza

Location

Distance
from
KeyArena

Capacity

Promoter

Quincy
Auburn
Puyallup
Redmond
Seattle
Woodinville
Seattle
Snoqualmie

161
29
38
15
0
20
5
31

22,000
20,000
10,400
5,000
4,500
4,300
3,800
2,500

Live Nation (Exclusive)
Live Nation (Exclusive)
Non-Exclusive
AEG (Exclusive)
Non-Exclusive
Lakeside Group (Exclusive)
Bear Concerts (Exclusive)
Mike Moloney Entertainment (Exclusive)

Source: AECOM, Pollstar



The Gorge and White River Amphitheater are more than twice as large (20,000+ seats) as the
next-largest amphitheater in the region, and generally host the highest-rated shows. The Gorge in
particular has a national reputation as a concert destination because of its natural setting. In the
2014 season (from May to September), each facility hosted approximately 10 to 12 shows,
including major headliners and festivals. Both are exclusively promoted by Live Nation. In 2014,
Live Nation announced its intent to expand the Gorge, made possible by a 2013 rezoning of the
property. Potential improvements could include permanent bathrooms and other infrastructure
improvements, a restaurant, farmer’s market, grocery store, outdoor cinema, additional
campgrounds, and a zip line.



Acts at the Gorge command the highest ticket prices in the region (an average of $90). White
River’s average ticket price is $38.



Aside from the Gorge and White River, the other, smaller venues in the region generally host
shows that attract 3,000 to 5,000 attendees in more intimate settings. In some cases, this can
lead to higher ticket prices (such as $55 to $70 at Marymoor Park and the Chateau Ste. Michelle
Winery), despite lower-rated shows.



Two facilities (the Mural Amphitheatre and Woodland Park) are located within the Seattle city
limits, and others are relatively remote from the city. However, the Mural, which is on the Seattle
Center campus, does not generally host ticketed events and offers only an open lawn and a basic
stage.



The table above does not include a potential waterfront amphitheater in downtown Seattle, which
could be built as part of the broader waterfront redevelopment project.

Smaller Indoor Music/Entertainment Venues (3,000 Seats or Fewer)
There are a number of small clubs and theaters in Seattle that also serve the music and entertainment
industries. Because of Seattle’s stature in the music industry, many of these venues are nationally-known
and attract acts that could potentially play a larger venue (although not necessarily a large arena) but
want a more intimate setting. These facilities include Seattle Center’s McCaw Hall, the Paramount,
Benaroya Hall, the Showbox Market and Showbox SoDo, casinos’ theaters, and others. The capacity of

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these facilities is less than 3,000. We generally do not expect these facilities to compete directly with any
future entertainment use of KeyArena, unless its current capacity is greatly reduced.
Convention and Meetings Facilities

Washington State Convention Center
The WSCC is the area’s largest convention facility and is located in
downtown Seattle. The convention center has expanded multiple times
and is planning a future expansion. Its current event facilities include:


205,000 square feet of dedicated exhibit space (divisible into six halls),



45,000 square feet of ballroom space (divisible into four rooms), and



57,000 square feet of meeting rooms (as many as 61 rooms).

In 2010, the facility’s most recent expansion, the 71,000-square foot Conference Center, was completed.
Also in 2010, the facility was purchased from the State and became part of the newly-formed Washington
State Convention Center Public Facilities District.

The current plan for the facility’s next expansion consists of a new facility one block from the WSCC that
would add 310,000 square feet of exhibit space, 60,000 square feet of ballroom space, and 100,000
square feet of meeting space.
In 2013, the WSCC hosted more than 350 events and 410,000 attendees.
Representatives of the consulting team met with WSCC representatives, who communicated the
following:


The convention center occasionally has groups that need 10,000+ seats for speakers. (It can
currently host 4,000-5,000 people on-site for a seated event.) Some of its larger events also
require the use of off-site facilities such as Benaroya Hall and downtown hotels.



With the planned expansion, the convention center’s needs for other facilities in Seattle are
expected to decrease.

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CenturyLink Field Events Center
CenturyLink Field’s Events Center is adjacent to the stadium and includes the WaMu Theater. The facility
is a large multipurpose facility that can host a wide range of events, including concerts, social events, and
pre-game events for the Seahawks and Mariners. However, its most common usage is as the city’s
primary consumer show venue, to complement the WSCC. The facility opened in 1999 and has a total of
325,000 square feet.

In 2013 and 2014, the Events Center hosted an average of approximately 15 public events and 55 event
days; nearly all of these events were consumer shows such as the Seattle Boat Show, the Seattle Home
Show, and the Seattle Golf & Travel Show. In 2007, the event hosted more than 30 such events.

Washington State Fairgrounds
The Washington State Fairgrounds in Puyallup is the home of the annual
state fair as well as many other events throughout the year. While the
complex is approximately 35 miles from Seattle, it hosts a number of large events that have a regional
draw.

Most relevant to any potential uses of KeyArena is that the Fairgrounds host many large consumer and
other public shows, in multiple large indoor venues. In 2013, in addition to events such as animal shows,
the circus, and graduations, the complex hosted a limited number of conventions and trade shows and

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many consumer/public shows. Examples included shows focused on antiques and collectibles, arts and
crafts, RVs, home and garden, and others.
Other Major Meetings Facilities
A number of facilities in Seattle also have significant meeting and convention space, including:


The Bell Harbor International Conference Center (100,000 square feet),



The Lynwood Convention Center (34,000 square feet),



The Meydenbauer Convention Center (Bellevue, 54,000 square feet), and



Hotels such as the Sheraton Seattle Hotel (75,000 square feet), The Westin Seattle (68,000
th

square feet), the planned “Stewart Project” at 9 and Stewart that will have 150,000 square feet,
and others outside of Seattle.

OTHER STAKEHOLDER FEEDBACK
The following summarizes other feedback that has been received, in addition to what appears above from
the arena’s current tenants.

KEYARENA


Key is the best option in the area for traditional, large (7,000+), higher-end concerts with reserved
seats, particularly for shows that want to be in the city. However, it is too expensive for smaller
shows and/or GA concerts (facilities such as the WaMu Theater are better options).



The arena’s primary strength is its downtown location, as many events want to perform downtown
and Key is the only large indoor option.



Since the Sonics left, Key also benefits from having a relatively high number of open dates for
touring events (much of the Storm’s season is during the summer, when concerts are typically
held outside). In the fall, winter, and spring, when the ShoWare Center and Xfinity Arena have
hockey games and have to turn down potential events, Key is often available.



For concerts and basketball in particular, the arena has excellent sightlines and feels intimate.



Music genres that seem to be more successful at Key are alternative and pop/rock.



Key’s rental terms are seen as fixed or non-negotiable, and union stagehands are more
expensive than non-union labor in Kent, Everett, and Tacoma. Key’s loading limitations that result
in extra setup time also add to the cost of putting on a show.



For many events, Key is simply too expensive, and is considered to be more expensive to use
than newer, larger, and better equipped arenas. In addition, the arena will not negotiate lower
usage terms for events that have significant economic impacts to the City.



From a promoter and event’s perspective, Key’s problems include:

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o

Limited concourse space,

o

Limited points of sale,

o

Subpar backstage facilities,

o

Difficult loading.

o

Lack of a rigging grid on the entire roof,

o

Outdated and/or lacking technology and equipment (including lack of wi-fi which is
considered essential),



o

The loss of seats in the south end zone for hockey and football, and

o

Difficulty in hosting flat-floor shows because the event floor is 35 feet below ground level.

In the future, Key will be expected to continue to support the Seattle Center financially and help to
subsidize the operations of the rest of the campus.



The lack of nearby hotels and parking/access difficulty can hurt its ability to host certain events.

LOCAL AND REGIONAL FACILITIES AND EVENTS


In general, the Seattle area is a very competitive market for venues, including arenas,
amphitheaters, theaters, and casino venues.



For smaller shows (approximately 3,000 seats or less), casinos are difficult to compete with
because they can afford to lose money on a show itself and profit from gaming and hotel rooms.



Because of the inventory of venues and casino dynamic, venues’ profit margins are decreasing
because their offers to events have to be so competitive.



The ShoWare Center and Xfinity Arena generally compete with other venues on price. They
attempt to offer promoters the best deal in the region, even if they have to lose money on a show
(because hosting shows helps to sell suites and sponsorships).



In general, country and hard rock shows are typically most successful at the suburban arenas.



Family shows will play back-to-back nights at Kent and Everett because they are served by two
different suburban markets, despite being in the same overall market. This dynamic does not
apply to other event types.



The amphitheater market is very competitive in the Seattle area and people prefer to see shows
outdoors in the summer. However, the two main amphitheaters have significant negatives – the
Gorge is too far from the population base, and White River is very difficult to get to and from.

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

Multiple promoters do not perceive a need for an additional outdoor amphitheater in the market,
either at Seattle Center or on the waterfront, due to the competiveness of this segment of the
market. However, an outdoor venue within the city for major concerts does not exist, particularly
since the end of Summer Nights at the Pier, at Piers 62 and 63.



A second large arena in Seattle (should a new SoDo arena be built) is not expected to be viable.
However, if a new arena is not built in SoDo, Seattle will still need a large arena.



Some see a need for a mid-sized arena in Seattle. Should the SoDo arena be built, it will
presumably have cut-down capabilities. However, otherwise, the city does not offer an indoor
venue in this size range, and it could be preferable to the facilities in Kent and Everett for certain
event types. A smaller arena in Seattle that would compete more directly with Kent and Everett
would be expected to take many events from those arenas.



Promoters have indicated that there could be a need for a 5,000- to 7,000-seat theater, similar to
Los Angeles’ downtown Nokia Theater. Seattle does not currently have a venue in this size
range, and there are many more events in this size range than for large arenas. However, this
type of venue (while it would be different in many ways from WaMu Theater) would compete
directly with WaMu.

COMPARABLE FACILITIES
In this section, we analyze the characteristics of venues that are similar in many ways to the potential
sports and entertainment-based options for the future use of KeyArena. These arena types include the
following:


Large, secondary arenas without major professional sports,



Mid-sized, secondary arenas,



Large, primary civic arenas without major professional sports,



Large, primary arenas with major professional sports (NBA and/or NHL), and



Theaters.

LARGE, SECONDARY ARENAS WITHOUT MAJOR PROFESSIONAL SPORTS
There are a limited number of facilities across the country that are the secondary arenas in a market but
are in the size range of KeyArena. In most cases, there will not be a second arena in the same size range
as a market’s NBA or NHL arena, unless a market has both teams and they do not share a facility (for
example, multiple arenas in the New York City market and two in the Phoenix/Glendale and
Minneapolis/St. Paul markets). Many facilities that become a secondary large arena due to the
construction of a new facility close or are repurposed. Examples include the Izod Center outside of New

Identification and Evaluation of Options for the Future of KeyArena
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 AECOM

York City (which is planned to close in the coming years) and the Pyramid in Memphis (which is becoming
a Bass Pro).
However, two existing examples of successful large, secondary arenas are the Allstate Arena in
Rosemont, Illinois (suburban Chicago; the United Center is the market’s primary arena) and the Forum in
Inglewood, California (Los Angeles). The Forum, which previously hosted the Lakers and Kings before
the Staples Center opened, was recently renovated as a music and entertainment-focused venue.

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47

 AECOM

 

Allstate Arena
Easement, IL {Chicag e1

Opened IQEICI- since renovated
censlrue?an cast
Funding: taut-t. public

Capacity: 1511210 {hockey}. 1?.500
[basketball], 15.501] teenaerls}

City?nwnecl and vcperalecl
Naming Rights: $1.5M1'year

Tenants. DePaul Uni-1'13th [through
20 1 AHL WNBA Sky

Premium Seating:
I Suites: 45

 

Histerlcal Events and Attendance:

 

2111115 2010 2N1 2012 W13
TetalPt?rendance act-1.335 aacazs slats-12 
Financial:
Operating FteI-Ienues: approx.  
Operating Expenses: approx 514M
Allstate
arena

 

 

 

The Ferum Presented by these
Ingleweed, CA [Les Angelea}

Reopened ED111-

5110th rencvatien east
BUIEHJU 5F

Funding- 32% pmate
Capacity: 11501]
Dumediepereted lay- MSG
Tenants: Nana

Premium Seating:
- '14 private bases
- Senate Seats

Either Amenities:

Dedicated almost esctuswely
In music and anlerlainmem

- SF cf 
n?eringe

SF terrace

 

 

Events Elnce Heep-Inning In January 21114:

5 grand epenmg concerts from the Eagles

- Either eencerts include Justin Timberlalte. Kings at Lean.
E0515- Aernsmilh. Arcade Fire. Tern F'el'lyr 3. line
Heartbreakers. and Fleetinch Mac

1- Dther events. include wreatling Wand Cup, a Latin:
musrc festwal. painting. cemeay. and MW 'u'iclecu Music
Awe 

11m FORUM

CHASED

 

 

Identification and Evaluation of Options for the Future of KeyArena
April 2015

 

AECOM

MID-SIZED SECONDARY ARENAS
While it is uncommon for markets to have two large arenas, many large metro areas have multiple arenas
in various size ranges in order to avoid direct competition and provide options for events with different
arena needs. In some cases, this arena is a university facility that also hosts non-university events. In this
section, we analyze two mid-sized arenas that are smaller complements to their market’s primary arena:
the BankUnited Center in Miami and Portland’s Veterans Memorial Coliseum.

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49

 AECOM

 

ElanltUnitetl Center
Ceral Gables. FL

Clip-ente 2003

oenslrue?en nest

200.000 3F

Funding: 100% at Miami dbnelibns
Capacity: H.000 teasltatbaln

   

 

 

 

 

{It's-nee by unwersittr: managed by.- Gl?b?l D'man'd:

Tenants- University at Miami basketball wag-g!" m" 16 - Llni'trer'eitjl has ptiur?'y' usage
15 and eannet schedule events en
1D the clay hefbna baskelbeull
Premium seating: Hm. games er the clay at UM
I 25 suiles baseball games
Milli-enigma:
Concerts 13

Cl'll'ler Amenities mm 10
Practice facility 3*
- 25.001] 3F Huwa 
. .. . r?
Bankumted

 

I: 


 

 

 

1hike-tarsus Memorial Cellseum
Portland. DR


. .. . 
I 

1950

532M renal-atin plan pending
Capacity: 10.400 (heckeyh. 12.930
{basketball}. 13.000 {eenbeits}
We? Histerieal lapel-aliens:
Tananls: WHL Wintethawks (shared
with Mada Center]



   

 

[Ill-10 10-11 1 1-11 12-13 13?14

 

 

serEwnls 1351 131 1315 ms 114
Tammi-manna assess 4111.113 ?was? .159 ass 131113.010
Net  n : :lrne (50905] 1534]: IEESI ?ll-I 
Either Amenities:
- F-?art bl Rees Cleaner 1:20.000-
53? CEW- 2013-14 eueels included:

Theater at the Clouds}

- 10 Winterhawlte games
3 cancel-ts

- IE Sesame Street Live 
- 11 graduatibns
Clther imbelies.
shearitlanse. and state sneer-  

and dense-{drill champibnshibs

 

 

 

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AECOM

LARGE, PRIMARY CIVIC ARENAS WITHOUT MAJOR PROFESSIONAL SPORTS
There are a number of large arenas (15,000+ seats) across the country that do not have an NBA or NHL
tenant. Some of these facilities had previously hosted major professional sports, or were designed to
accommodate them. For this arena type, we focus on two facilities: the Sprint Center in Kansas City and
the BOK Center in Tulsa. The Sprint Center was built “NBA/NHL-ready”; the BOK Center has the seating
capacity for an NBA or NHL team but has WNBA and minor-league football and hockey tenants.

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 AECOM

 

Sprint Center
Kansas City, MD

Dpened 

SEEM eonslruetinn dost
SF

Funding. i'F'i-E public
Capacity: 115W thankeyl.
113nm tbaslteiballj. wane
[mncedsi

Citymnea operated by AEG
Naming Rights: $2 Still-Tear

Tananla: None

Premium Easting:
I 72 Suites

Dil'rer Amenities:

I Multiple clubs and huoges

- College Basketball Hall of Fame
and I:ollege Basketball Experieme
Leeated within Fewer EL Lrgl'll
enlerlainmenl district

   

1013-14 Tioketed Events:

 

Conoans 2E:
Euenls 
Porn in.I Shows 25
Entertainment 15
?lher Events 1
Total re

 

Approx. 105 lotaleuents. 1.1 million
attendees per year

liliilxl'

Host of Big 12 men's basketball 
tournament Sprint

Has hosted GEE eessls basketball 
tournamenl. NW volleyball Final Four. lill "ll I

NBA and NHL preseason games

 

 

 

BDH lBanter
Tulsa, OK

Opened EDDIE

oonalruob'on coat

565.001] SF

Funding' 913% public

Capacity: 1?.1ol] thaekayi. 115m
lbaskelbaII}. 19.200 {aeneens}
EMAuthority-ownad; managed by 5MB
Naming Rights: 

Tenants: ELA Ehoelt. AFL Tel-ans.
CHL ?llers

Premium Seating:
- 45 suites

Legs Bones
- 530 Club Seats

Other Amenities:

- Hugh level of finishes and
o?aings. ineluding exterior
design. Wi?? seats. light
displays. and seareboard

 

Histarieal Deer-aliens:

Events: average of 1TB per year
Attendance: average at Brenna per year
- Net Operating Income: average of $1 per year

Events have included NBA exhibition games. college
basketball games and the Conference use tdurnament.
NCAA man's baskelball tournament.

BOK CENTER

 

 

 

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AECOM

LARGE, PRIMARY ARENAS WITH MAJOR PROFESSIONAL (OR COLLEGIATE) SPORTS
Compared to some of the other arena types analyzed in this section, there are many more examples of
large arenas that host major professional sports; by definition, there is one in every NBA and NHL market.
We focus on three such facilities: the Amway Center in Orlando (one of the newest NBA arenas),
Bridgestone Arena in Nashville (an NHL arena in a very strong music market), and the KFC Yum! Center
in Louisville. While the KFC Yum! Center hosts a collegiate tenant (the University of Louisville), it is larger
than most NBA/NHL arenas and the UofL outdraws most NBA and NHL teams. With the exception of
having a shorter schedule than an NBA or NHL team, the UofL is similar to a professional tenant.

Identification and Evaluation of Options for the Future of KeyArena
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53

 AECOM

 

 

Amway center
Drlande. FL

Dpened 

senstruetien east

BUILEIUD 5F

Funding: STEP.) public. 13% team
Gapaeity: 13.800!
{basketball}. 16.550 tennce?l
Clip-airmen and ?eparaler:l
Naming Flights sweet:

Tenants: MBA Magic. AFL Predators.

EGHL Eelar El-ears

Premium Seating:

- Suites: ?ll]

Luge Boxes: EB

- ISlut? Seats: 1.428

Other Amenities:

Iz?-lt. lei-.reriebsen-atien deck

- Iillutrs. restaurants. banquet
reerns

- Practice eeurt

Team stare

 

2012-13 Evants and Attendance:

 

I-ef iluru 

Ewm hm". kill".
NBAGames 45 11.441 
HFL E'uurrue El 5.5? 53.911
EC-HL Game: 35 1.155 .1 Hi]
CUIIWIW '35 10.51? 355.425
Shim-5 .25 5.215 153.25:
E'hg'l?. 15 11?? 

Events 1109-1-


 

 

Financial [Including adjaeam garage]:
- I:Cilperatlng Revenues: approx. 518M

- l:Ciperating Expenses: appreit. 

SEN TEE

 

 

 

Arena
Nashville. TN

Opened 1995; aims renews-ted
$1e4ra censtruetien east

1 millian SF

Funding: public

Capacity- 1T.1UD {heekeyL 19.401]
thaske?rhalli. 13.500 [cancerli
Clwnetl try Gllyi?eunty Authenty;
Managed by team antin

Tenant: NHL Preealers

Premium Seating:
Suites: 1'2
Club Seats: 1.301]

Either Amenities:

- 22-s?rery' weer and eutdeer want
spaee

- Restaurant and lounge

Rehearsal hall

Heeling morn 5

- Cenneeted te eenwentien eenter

   

2013-14 Tielteted Events:

 

 

Predators 43 Annual attendance 1 Ell-1.4

Canes-rte millien

Fam'lFSh?ws 2'3 Special events include SEC

Cher Spam ?2 tournament. HEM I.renrnan's

Other Events 9 Final Feur. sue Awards. em

l'u'luaie na?unal figure
skating and nasties
championships

Financial: A

Operating Revenues: apprent- 59?

Operating Expenses: apprex. Wm

 

 

 

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AECOM

 

HF: Yum! Ce nter
Louisville, KY

 

 

?oor-ed 201D
construction onol
Hamill} 5F
Funding: 1I:ltl=li= public {53% from city! 1011-13 Ever-15:
and TIF. from arena
revenues} UofL Men's. Bee helbell 21
Capacity: 22.100 [basketball]. 115% 1T
{Enmed?h :qu Worn en 5 Volleyball 
onion by Arena Authotlty: ?Wm
Shows 13
managed by AEG Spurting Events 8-
Namlng matings {Harm ?31$ 
Tenant: HEM Uni'ir. ol Louisville Crthar Ell-lante- 11
Telil 133

Premium Sealing:

 

Sui'E'El 7"2 Smree: +in mm oamnr

- Luge 80:35: Financial?

Club Seats; 2.0m: 

nth? Amanitlas: - Operating Rwanueo: approx. 513.3M

?-abre plaza and lobby.r . 

Clubs. restaurants. bars. mooling womb panama Eweng'?' appm?c' ?Kw 5m
- Practice coUrt

Team store

 

 

 

 

Identification and Evaluation of Options for the Future of KeyArena

May 2015 55

AECOM

THEATERS
There are theaters of various sizes in large and small markets across the country, and many markets
have multiple theaters, performing arts centers, and other similar facilities. Seattle currently has two major
theater venues – McCaw Hall, which is on the Seattle Center campus, and downtown’s Benaroya Hall.
Both facilities offer a wide range of programming, including opera, ballet, popular music, live theater,
family shows, and others. Below, we profile two successful theaters in other markets – the Nokia Theatre
in Los Angeles and the Bellco Theatre in Denver.

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 AECOM

 

 

Nekia Theatre L.A. Live
Les Angeles. CA

?nance 

steam east
250.00!) SF

110?] seats

Narnth 

D?erings and Amenities:

12 luaurg,I buses and VIP leu nge

- Pan at LA. Live {Staples I[Lenten LA
CDI'I'n'El?ltiDn lBanter. hotels. lElutt Mekia
LA. Live. mevie theater. retail and
ellice space

- The largest indecr stage in Scuthern
Calilcrriia and ens at the largest in the
U3

 

thed and cperated lav AEG -

 

Histerlcal Dperatiens:

Heals appraximatelv 12D events per year
2:114: 10+ ticketed events

Recent years: sane average attendance: 513? average ticket
price

Events include ccncerts- perferrnances. awards shews. 
sheave. enumerate events. product latinches. spealtErs. and
ethers

Maj-er events have included the American Music Awards. the
Primetirne Emmy Awards. the new videe Music Awards. the
Peoples Chcice Awards. BET Awards. and the EFT Awards

NUKIA

Theatre
LA. Ll'v'[

 

 

Bellce Theatre
Denver. CD

Cleaned 2005

Naming rights: 5250.00Dhear {eriginal
ecntract was [er 

5.1410 seats

Uvrned City-'Ceuntv of Denver.
managed by EMS

?tferings and Amenities:

F'ar1 cf Eclcrade Cenvemicun
Center in dewntewn Denver

ltitan be sunligLAred fer a
smaller slate-lI seats]
threth cLthaining eff the
upper level

 

 

Hlsterlcal Ctperatlerls:

Apprexirnatelv an events per year

Events inctude cencerts, speakers. eemedtans. graduatlens.
farnilh.I theater. and elhers

Ftecent years: aces average attendance. $53
average ticket prise





 

 

 

 

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57

AECOM

4. NBA and NHL Overview
NATIONAL BASKETBALL ASSOCIATION
The Basketball Association of America (BAA) came into existence in 1946. Three years
later, the league merged with the National Basketball League (NBL), forming what is known
today as the National Basketball Association (NBA).
Originally, the NBA consisted of 17 teams. In 1950 the league contracted to 11 teams, and
in 1954 the league contracted again to eight teams. In the midst of this transition, several of
the smaller market franchises relocated to larger markets. The NBA currently comprises 30
franchises, as well as a development league (D League), NBA China, and several mediabased entities.
The locations of the NBA’s franchises are shown below.
Figure 1: NBA Team Map

CURRENT NBA ARENAS
This section reviews current NBA facilities and their characteristics such as capacity, tenants, attendance,
financing, construction cost, ownership and management, and premium seating.

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NBA Arenas’ Tenants, Age, Attendance and Capacity
Table 14 : NBA Arena Characteristics and Attendance



Tenants – Twenty-two NBA franchises currently share an arena with another professional
franchise (primarily NHL teams, although one arena is shared by two NBA teams). The majority
of other tenants at NBA arenas are WNBA, minor-league hockey, and Arena Football League
teams.



Attendance – For the 2013-14 NBA season, an average of more than 19,000 fans attended
games. Average attendance ranged between 13,500 and 21,700 fans.



Capacity – The basketball capacity at NBA venues ranges between 17,000 and more than
22,000. The average capacity of NBA arenas is approximately 19,100.



Utilization – NBA utilization rates (attendance as a percent of capacity) for the 2013-14 season
ranged between 68 percent and more than 100 percent (due to standing room-only seating that is
not considered in the permanent seating capacity). The average utilization rate for the past
season was 91 percent, not including standing-room only tickets.

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NBA Arena Funding
Table 15: NBA Arena Funding
Project Cost
Venue

City

Year Built

Team

Funding

Nominal
($M)

Real,
$2014
($M)

% Public

% Private

Atlanta Hawks
Philips Arena
Atlanta
Boston Celtics
TD Garden
Boston
Brooklyn Nets
Barclays Center
Brooklyn
Charolotte Bobcats
Time Warner Cable Arena
Charlotte
Chicago Bulls
United Center
Chicago
Cleveland Cavaliers
Quicken Loans Arena
Cleveland
Dallas Mavericks
American Airlines Center
Dallas
Denver Nuggets
Pepsi Center
Denver
Detroit Pistons
Palace of Auburn Hills
Auburn Hills
Golden State Warriors
Oracle Arena
Oakland
Houston Rockets
Toyota Center
Houston
Indiana Pacers
Conseco Fieldhouse
Indianapolis
LA Clippers
Staples Center
Los Angeles
LA Lakers
Staples Center
Los Angeles
Memphis Grizzlies
FedEx Forum
Memphis
Miami Heat
American Airlines Arena
Miami
Milwaukee Bucks
BMO Harris Bradley Center
Milwaukee
Minnesota Timberwolves
Target Center
Minneapolis
New Orleans Hornets
Smoothie King Center
New Orleans
New York Knicks
Madison Square Garden
New York
Oklahoma City Thunder Chesapeake Energy Arena Oklahoma City
Orlando Magic
Amway Center
Orlando
Philadelphia 76ers
Wells Fargo Center
Philadelphia
Pheonix Suns
US Airways Center
Phoenix
Portland Trail Blazers
Moda Center
Portland
Sacramento Kings
Sleep Train Arena
Sacramento
San Antonio Spurs
AT&T Center
San Antonio
Toronto Raptors
Air Canada Centre
Toronto
Utah Jazz
EnergySolutions Arena
Salt Lake City
Washington Wizards
Verizon Center
Washington DC

1999
1995
2012
2005
1994
1994
2001
1999
1988
1966
2003
1999
1999
1999
2004
1999
1988
1990
1999
1968
2002
2010
1996
1992
1995
1988
2002
1999
1991
1997

$214
$160
$800
$200
$175
$155
$420
$187
$80
$25
$175
$183
$375
$375
$250
$213
$90
$117
$110
$123
$250
$380
$206
$90
$262
$40
$186
$240
$94
$260

$304
$248
$823
$242
$279
$247
$560
$265
$160
$182
$225
$260
$532
$532
$313
$302
$180
$212
$156
$835
$328
$412
$310
$152
$406
$80
$244
$340
$163
$383

29%
0%
36%
50%
9%
95%
30%
0%
0%
100%
100%
43%
0%
0%
100%
16%
36%
72%
100%
100%
100%
84%
0%
39%
13%
0%
79%
0%
21%
23%

71%
100%
64%
50%
91%
5%
70%
100%
100%
0%
0%
57%
100%
100%
0%
84%
64%
28%
0%
0%
0%
16%
100%
61%
87%
100%
21%
100%
79%
77%

AVERAGE

1996

$209

$315

44%

56%

Source: AECOM research



Total Project Cost – In real dollars, NBA venues cost between $80 million and $835 million to
construct. In real dollars, the average project cost is $315 million. (These figures only consider
the arenas’ original construction, and not any renovations.) However, the newest NBA arenas, in
Orlando and Brooklyn, cost $380 million and $800 million, respectively.



Funding Sources – The public sector, on average, has paid 44 percent of the arenas’ cost and
the private sector has paid 56 percent of total arena costs.

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NBA Arena Ownership and Management
Table 16: NBA Arena Ownership and Management

Manager
Team

Atlanta Hawks
Boston Celtics
Brooklyn Nets
Charolotte Bobcats
Chicago Bulls
Cleveland Cavaliers
Dallas Mavericks
Denver Nuggets
Detroit Pistons
Golden State Warriors
Houston Rockets
Indiana Pacers
LA Clippers
LA Lakers
Memphis Grizzlies
Miami Heat
Milwaukee Bucks
Minnesota Timberwolves
New Orleans Hornets
New York Knicks
Oklahoma City Thunder
Orlando Magic
Philadelphia 76ers
Phoenix Suns
Portland Trail Blazers
Sacramento Kings
San Antonio Spurs
Toronto Raptors
Utah Jazz
Washington Wizards

Venue

Owner

Philips Arena
TD Garden
Barclays Center
Time Warner Cable Arena
United Center
Quicken Loans Arena
American Airlines Center
Pepsi Center
Palace of Auburn Hills
Oracle Arena
Toyota Center
Conseco Fieldhouse
Staples Center
Staples Center
FedEx Forum
American Airlines Arena
BMO Harris Bradley Center
Target Center
Smoothie King Center
Madison Square Garden
Chesapeake Energy Arena
Amway Center
Wells Fargo Center
US Airways Center
Moda Center
Sleep Train Arena
AT&T Center
Air Canada Centre
EnergySolutions Arena
Verizon Center

Public
Private
Private
Public
Private
Public
Public
Private
Private
Public
Public
Public
Private
Private
Public
Public
Public
Public
Public
Private
Public
Public
Private
Public
Private
Private
Public
Private
Private
Private

Public
Owner

Private
Manager for
Public
Owner

TeamRelated
Entity
x
x
x
x
x
x
x
x
x

x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x

Source: AECOM research



Of the 29 NBA arenas, 16 are publicly owned and 13 are owned by team-related and other
private entities.



Of the publicly-owned arenas, seven are managed by the public agency or a private management
company that was hired by the public sector and is not affiliated with an arena tenant. The
remaining facilities are operated directly by the team.

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POTENTIAL EXPANSION AND RELOCATION
Seattle can obtain an NBA franchise in two different ways: through league expansion from its current 30
teams, or if a current franchise relocates.
Potential NBA Expansion
The current likelihood of the NBA pursing expansion, at least in the short term, is extremely limited.
Earlier this year, new commissioner Adam Silver, who recently took over for David Stern, reiterated that
the NBA currently has no plans to expand. For several reasons, the NBA is expected to avoid expansion:


Despite the new collective bargaining agreement (CBA), many teams still struggle financially,
particularly in smaller markets. Because any new franchise would likely be a smaller-market team
(as the top markets are already occupied), it could likely face problems related to being able to
generate competitive levels of revenue. However, Seattle is an exception in that it had
successfully supported an NBA team for many years.



Product dilution is also a concern. As with other professional leagues that have expanded in
recent decades, not only have many teams struggled financially, but the on-court product has
been diluted due to the addition of more players. If anything, it has been suggested that leagues
contract rather than expand, to improve the product and focus on their strongest markets.



Realignment is also a consideration. As the NBA currently has 30 franchises, the addition of one
would cause an unbalanced schedule, with a different number of teams in the Western and
Eastern conferences. A better expansion solution in this regard would be to add an even number
of teams; however, two new NBA teams are even less likely than one.



Despite new television contracts that will guarantee all teams more money beginning in 2016, this
could lead to labor problems when the current CBA with players expires, which could be as soon
as 2017. The possibility of a strike or lockout would complicate the ability of the league to expand.

In late 2014, when the league signed a new television deal that significantly increased the league’s
revenues, many believed that it increased the possibility of the league’s pursuit of expansion and the
enormous expansion fee that would be paid by a new team.
Potential NBA Relocation
The probability for an NBA franchise to relocate is presumably greater than that of expansion. However,
there currently is no team that is actively and publicly planning to move. The most recent attempt in the
NBA that was a legitimate threat to move was from the Sacramento Kings, who would have presumably
moved to a new arena in Seattle but are now committed to Sacramento due to new ownership that is
partnering with the city on a new arena (which is currently under construction). In recent years, the New
Orleans Hornets and Milwaukee Bucks were in a similar position, but a change in ownership and a $50million arena renovation led to the team signing a long-term lease in New Orleans, and the Bucks have
new owners that appear committed to a new arena in Milwaukee.

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Potential Destinations
According to reports, multiple cities (aside from Seattle) are potentially viable and/or willing markets, as
described below.

Las Vegas
Major professional sports leagues have resisted placing a franchise in the city due to the presence of
legalized sports gaming, but have not avoided Las Vegas altogether. For example, the NBA’s largest
summer league is held in Las Vegas, as was its 2007 All-Star Game. In 2014, two arenas that could
potentially accommodate major professional sports broke ground on the Las Vegas Strip. The first, led by
MGM Resorts and AEG, is a $375-million, 20,000-seat arena that is planned to open in 2016. The other
facility, which had its groundbreaking in October, is a $690-million, 22,000-seat retractable roof arena that
would be part of a $1.4-billion development with a hotel. As of March 2015, financing for the arena had
not yet been finalized.
Both facilities are expected to attempt to secure a franchise from either the NBA and/or NHL. (In late
2014, MGM confirmed that it has had preliminary discussions with a group associated with bringing an
NHL team to Las Vegas).

Kansas City
The Kansas City MSA is home to more than two million residents and is home to the Chiefs (NFL), Royals
(MLB), Missouri Mavericks (CHL), Command (AFL) and Sporting KC (MLS). The Sprint Center, located in
downtown Kansas City, opened in 2007. The arena was designed to host the NBA and/or NHL, but
despite not having a major professional sports franchise, it has enjoyed tremendous success in hosting
other events. In recent years, a number of NBA and NHL teams (such as the Los Angeles Clippers,
Pittsburgh Penguins, New York Islanders, and Nashville Predators) have flirted with moving to the Sprint
Center, although the teams were often seeking leverage with their hometowns as much as anything else.
Despite the potential for the arena’s owner, AEG, to be more profitable without sharing revenue with an
NBA or NHL tenant (depending on whether it owns the team) and losing more than 40 prime dates for
other events, the Sprint Center will continue to be considered as a potential destination for any struggling
NBA and NHL teams.

Anaheim
When the Kings were on the verge of leaving Sacramento, one potential contender was Anaheim, whose
Honda Center is undergoing a $20-million renovation that would make it more attractive for NBA use.
The private company that owns the Ducks and manages the arena has the stated goal of attracting an
NBA team to the facility. However, obstacles for the relocation to Anaheim exist, particularly when
considering geography and current media contracts. The Lakers and Clippers are already in the Los
Angeles market, and Anaheim is well within their territory.

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Virginia Beach
In Virginia Beach, the city is working with a private development group to build an arena that could
potentially host major professional sports.
Recent and Upcoming Arena Plans
This section highlights some of the planned or potential new NBA arena projects and renovation projects
that are either under construction, under review, or in the pipeline (in addition to what was described
above). This will further define expectations for a state-of-the-art facility in the NBA.

Sacramento Kings
After many years of failed attempts, the Sacramento Kings are currently building a new arena in
partnership with the city. The approximately $450-million, 18,500-seat arena will be located in downtown
Sacramento and is expected to open in 2016. Approximately $260 million of the arena’s cost will be
funded by the city, and $190 million will be contributed by the team’s new ownership group.

Milwaukee Bucks
As of earlier this year, new ownership of the Bucks hired an architect to design a new arena in downtown
Milwaukee to replace the BMO Harris Bradley Center. However, a public-private funding plan has not yet
been determined. It is generally thought that the team will remain in Milwaukee but this will depend on a
funding plan.

The Golden State Warriors and San Francisco
In recent years, the Warriors have been actively trying to relocate from Oakland to San Francisco. Initial
plans to build a new arena on San Francisco’s Piers 30-32 were scrapped when estimated costs nearly
doubled, and the team purchased property in Mission Bay. The team’s goal is to be in the new arena in
2018.

The San Antonio Spurs and AT&T Center
In 2008, Bexar County voters approved plans to commit more than $400 million in tax revenues to
riverfront and sports and entertainment projects; the Spurs’ AT&T Center received approximately $100
million for renovations. The facility’s upgrades are expected to focus on improving premium seating
amenities, VIP clubs, and other high-end revenue components.

The Minnesota Timberwolves and the Target Center
The Minneapolis City Council recently approved an agreement to renovate the Target Center, which is
one of the NBA’s oldest arenas. The $97-million project, which will include nearly $50 million in public
funds, will address the arena’s exterior, new clubs and other public spaces, and other improvements.
Construction could be completed by late 2016.

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The Charlotte Bobcats and Time Warner Cable Arena
In 2014, the Bobcats and the Charlotte Regional Visitors Authority submitted a list of $42 million of arena
renovations to the City of Charlotte. The arena is less than ten years old; however, requested renovations
include suite and restaurant improvements, back-of-house and support facilities, technology, and others.
According to the team’s lease, the city is responsible for making various improvements to maintain its
status as among the NBA’s most modern and to ensure the team’s revenue-generating ability. As of late
2013, the City appeared willing to invest $27.5 million in capital improvements, as well as $600,000 per
year for ten years for ongoing maintenance.

NBA TEAM OPERATIONS
The following section examines financial estimates for NBA franchises. Compiled by Forbes, the following
table illustrates franchises valuations, revenues, and operating income for the 2013-2014 season.
However, these valuations only take the team into account and do not analyze any teams as a part of a
larger entertainment and/or real estate entity, as some are. In addition, while these estimates are made
for private companies without full data, they can be useful in comparing the relative financial position of
teams.


Team Valuations – During the 2013-2014 season, the average NBA team was valued at more
than $1.1 billion, from an average of approximately $630 million the year before. Values ranged
between $600 million (Milwaukee Bucks) and $2.6 billion (Los Angeles Lakers). In general,
valuations increased significantly in 2014, primarily due to the league’s new $24-billion media
contract. The nearly 75-percent increase in average team value is the largest annual change
since Forbes began tracking team values in 1998.



Revenues and Operating Income – Revenue and operating income in the NBA varied greatly.
Operating income ranged from a net loss of nearly $100 million (Brooklyn) to a net gain of more
than $100 million (Los Angeles Lakers). The average team generated a net gain of $23 million.

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Table 17: NBA Franchise Financial Metrics

Rank

Team

1
2
3
4
5
6
7
8
9
10

Los Angeles Lakers
New York Knicks
Chicago Bulls
Boston Celtics
Los Angeles Clippers
Brooklyn Nets
Golden State Warriors
Houston Rockets
Miami Heat
Dallas Mavericks

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30

League Average
San Antonio Spurs
Portland Trail Blazers
Oklahoma City Thunder
Toronto Raptors
Cleveland Cavaliers
Phoenix Suns
Washington Wizards
Orlando Magic
Denver Nuggets
Utah Jazz
Indiana Pacers
Atlanta Hawks
Detroit Pistons
Sacramento Kings
Memphis Grizzlies
Charlotte Hornets
Philadelphia 76ers
New Orleans Pelicans
Minnesota Timberwolves
Milwaukee Bucks

Current
Value
($mil)

1-Yr Value
Operating
Revenue
Change
Income
($mil)
(%)
($mil)

$2,600
$2,500
$2,000
$1,700
$1,600
$1,500
$1,300
$1,250
$1,175
$1,150
$1,106

93%
79%
100%
94%
178%
92%
73%
61%
53%
50%
74%

$293
$278
$201
$173
$146
$212
$168
$175
$188
$168
$160

$104
$53
$65
$55
$20
($99)
$45
$38
$13
$30
$23

$1,000
$940
$930
$920
$915
$910
$900
$875
$855
$850
$830
$825
$810
$800
$750
$725
$700
$650
$625
$600

52%
60%
58%
77%
78%
61%
86%
56%
73%
62%
75%
94%
80%
45%
66%
77%
49%
55%
45%
48%

$172
$153
$152
$151
$149
$145
$143
$143
$136
$142
$139
$133
$144
$125
$135
$130
$125
$131
$128
$110

$41
$12
$31
$18
$21
$28
$10
$21
$14
$33
$25
$15
$18
$9
$11
$1
$24
$19
$7
$12

Source: Forbes

NBA MARKET ANALYSIS
At the city and MSA level, several demographic metrics were analyzed for Seattle and existing league
markets (there are 30 teams in 28 markets, with two teams in New York and Los Angeles). The following
charts compare Seattle with the current NBA markets.

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Metro Areas
Figure 3: 2013-18 Population Growth in NBA MSAs

Figure 2: MSA Population by NBA Team

Brooklyn Nets & NY Knicks
LA Clippers and LA Lakers
Chicago Bulls
Dallas Mavericks
Houston Rockets
Philadelphia 76ers
Washington Wizards
Miami Heat
Toronto Raptors
Atlanta Hawks
NBA MSA Average
Boston Celtics
Golden State Warriors
Phoenix Suns
Detroit Pistons
Seattle
Minnesota Timberwolves
Denver Nuggets
Charlotte Bobcats
Portland Trail Blazers
San Antonio Spurs
Orlando Magic
Sacramento Kings
Cleveland Cavaliers
Indiana Pacers
Milwaukee Bucks
Memphis Grizzlies
Oklahoma City Thunder
New Orleans Pelicans
Utaz Jazz

19,764,907
12,984,125
9,556,315
6,691,748
6,214,131
6,019,190
5,800,253
5,657,903
5,583,064
5,420,859
4,612,678
4,607,475
4,433,382
4,333,245
4,254,995
3,548,039
3,403,898
2,633,643
2,302,347
2,279,924
2,249,546
2,203,521
2,191,882
2,073,342
1,927,110
1,561,848
1,337,352
1,298,274
1,235,503
1,135,207

Source: ESRI

Houston Rockets
San Antonio Spurs
Dallas Mavericks
Orlando Magic
Denver Nuggets
Utaz Jazz
Charlotte Bobcats
Oklahoma City Thunder
Washington Wizards
New Orleans Pelicans
Phoenix Suns
Seattle
Atlanta Hawks
Miami Heat
Portland Trail Blazers
Golden State Warriors
Toronto Raptors
Indiana Pacers
Sacramento Kings
NBA MSA Average
Minnesota Timberwolves
Boston Celtics
LA Clippers and LA Lakers
Memphis Grizzlies
Brooklyn Nets & NY Knicks
Philadelphia 76ers
Chicago Bulls
Milwaukee Bucks
Cleveland Cavaliers
Detroit Pistons

1.8%
1.8%
1.6%
1.4%
1.4%
1.4%
1.4%
1.4%
1.3%
1.3%
1.2%
1.2%
1.1%
1.1%
1.0%
1.0%
0.9%
0.9%
0.8%
0.8%
0.7%
0.6%
0.6%
0.5%
0.5%
0.4%
0.3%
0.3%
-0.1%
-0.1%

Source: ESRI

The average MSA population was 4.6 million in 2013. However, the

Population levels in NBA MSAs are expected to grow at an average

median population was 3.8 million, as the average is skewed by New

annual rate of 0.8 percent through 2018. The Seattle MSA is projected to

York and Los Angeles. Seattle’s population was 3.5 million.

grow at a faster-than-average rate (1.2 percent annually).

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Figure 4: 2013 Median Age in NBA MSAs

Cleveland Cavaliers
Miami Heat
Detroit Pistons
Boston Celtics
Golden State Warriors
Toronto Raptors
Philadelphia 76ers
Brooklyn Nets & NY Knicks
New Orleans Pelicans
Milwaukee Bucks
Seattle
Portland Trail Blazers
NBA MSA Average
Orlando Magic
Charlotte Bobcats
Washington Wizards
Minnesota Timberwolves
Sacramento Kings
Indiana Pacers
Denver Nuggets
Chicago Bulls
Memphis Grizzlies
Atlanta Hawks
LA Clippers and LA Lakers
Oklahoma City Thunder
Phoenix Suns
San Antonio Spurs
Dallas Mavericks
Houston Rockets
Utaz Jazz

Figure 5: 2013 Median Household Income in NBA MSAs (US)

41.3
40.5
39.8
38.9
38.8
38.6
38.5
38.1
37.5
37.4
37.3
37.3
36.7
36.7
36.7
36.6
36.6
36.2
36.2
36.2
36.2
35.5
35.4
35.3
35.1
35.0
34.5
34.0
33.6
31.3

Source: ESRI

Washington Wizards

$87,700

Golden State Warriors

$73,040

Boston Celtics

$68,380

Seattle

$64,910

Minnesota Timberwolves

$63,560

Brooklyn Nets & NY Knicks

$62,660

Sacramento Kings

$59,930

Philadelphia 76ers

$59,200

Denver Nuggets

$58,540

Chicago Bulls

$57,700

LA Clippers and LA Lakers

$57,300

Utaz Jazz

$57,120

Dallas Mavericks

$56,590

NBA MSA Average

$56,020

Houston Rockets

$55,480

Atlanta Hawks

$54,640

Portland Trail Blazers

$53,930

Phoenix Suns

$52,010

Milwaukee Bucks

$51,290

Indiana Pacers

$51,100

Charlotte Bobcats

$50,910

Detroit Pistons

$50,590

San Antonio Spurs

$50,300

Orlando Magic

$48,030

Cleveland Cavaliers

$47,500

Oklahoma City Thunder

$47,320

New Orleans Pelicans

$47,220

Memphis Grizzlies

$45,270

Source: ESRI

The median age in the Seattle MSA was 37.3 in 2013, which was

In 2013, the median household income in the Seattle MSA was the

slightly older than the than the NBA median of 36.7.

fourth-highest among NBA MSAs and nearly $9,000 more per
household than the NBA median. Only Washington, San Francisco/
Oakland, and Boston had higher incomes.
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Figure 6: 2012 Number of Firms in NBA MSAs (US)

Brooklyn Nets & NY Knicks

Figure 7: 2011 Share of Firms with More than 500 Jobs (US)

556,888

LA Clippers and LA Lakers

338,007

Chicago Bulls

238,037

Miami Heat

176,882

Dallas Mavericks

145,968

Philadelphia 76ers

143,951

Washington Wizards

143,490

Milwaukee Bucks

0.37%

Memphis Grizzlies

0.35%

Dallas Mavericks

0.34%

Boston Celtics

0.34%

San Antonio Spurs

0.34%

Minnesota Timberwolves

0.33%

130,389

Utaz Jazz

Houston Rockets

126,782

Houston Rockets

Boston Celtics

123,575

Chicago Bulls

0.29%

Golden State Warriors

120,250

Orlando Magic

0.29%

NBA MSA Average

115,193

Atlanta Hawks

Seattle

97,180

0.32%
0.32%

Phoenix Suns

0.29%

Philadelphia 76ers

0.29%

Detroit Pistons

97,060

Indiana Pacers

0.28%

Minnesota Timberwolves

92,049

Charlotte Bobcats

0.28%

Phoenix Suns

87,871

Washington Wizards

Denver Nuggets

74,954

0.28%

Detroit Pistons

0.26%

Portland Trail Blazers

63,248

Golden State Warriors

0.26%

Orlando Magic

56,533

Atlanta Hawks

0.26%

Charlotte Bobcats

54,647

Cleveland Cavaliers

0.25%

Cleveland Cavaliers

51,557

Brooklyn Nets & NY Knicks

0.24%

Sacramento Kings

45,134

New Orleans Pelicans

Indiana Pacers

44,798

Denver Nuggets

San Antonio Spurs

41,626

LA Clippers and LA Lakers

Milwaukee Bucks

37,728

0.24%
0.23%
0.22%

Seattle

Oklahoma City Thunder

33,734

NBA MSA Average

Utaz Jazz

30,228

Portland Trail Blazers

New Orleans Pelicans

29,644

Oklahoma City Thunder

Memphis Grizzlies

25,175

Sacramento Kings

0.22%
0.22%
0.20%
0.18%
0.17%

Miami Heat

0.14%

Source: U.S. Census

Source: U.S. Census

On average, MSAs in the NBA have nearly 115,200 firms. The Seattle
MSA is just below the average with 97,180.

On average, nearly one-quarter of one percent the firms in MSAs with
an NBA team (and Seattle) have more than 500 employees.

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Cities
On the following pages, similar data was analyzed at the city level for markets with NBA teams.
Figure 8: 2013 City Population by NBA Team
Brooklyn Nets & NY Knicks
LA Clippers and LA Lakers
Chicago Bulls
Toronto Raptors
Houston Rockets
Philadelphia 76ers
Phoenix Suns
San Antonio Spurs
NBA City Average
Dallas Mavericks
Indiana Pacers
Charlotte Bobcats
Detroit Pistons
Memphis Grizzlies
Boston Celtics
Seattle
Denver Nuggets
Washington Wizards
Oklahoma City Thunder
Portland Trail Blazers
Milwaukee Bucks
Sacramento Kings
Atlanta Hawks
Miami Heat
Golden State Warriors
Minnesota Timberwolves
Cleveland Cavaliers
New Orleans Pelicans
Orlando Magic
Utaz Jazz

Figure 9: 2013-18 Population Growth in NBA Cities (US)
8,305,061

3,843,507
2,732,022
2,615,060
2,167,287
1,544,321
1,485,522
1,370,227
1,256,809
1,225,901
826,998
758,280
679,309
646,194
631,445
631,253
628,858
621,686
604,005
600,538
592,966
473,436
432,643
411,809
398,260
388,700
387,986
377,599
247,962
193,077

New Orleans Pelicans
2.0%

Charlotte Bobcats

1.6%

Atlanta Hawks

1.6%

Washington Wizards

1.6%

Orlando Magic

1.5%

Oklahoma City Thunder

1.4%

San Antonio Spurs

1.4%

Seattle

1.4%

Houston Rockets

1.4%

Utaz Jazz

1.3%

Miami Heat

1.3%

Phoenix Suns

1.2%

Dallas Mavericks

1.2%

Portland Trail Blazers

1.2%

Boston Celtics

1.0%

Golden State Warriors

1.0%

NBA City Average

0.8%

Minnesota Timberwolves

0.8%

Sacramento Kings

0.8%

Brooklyn Nets & NY Knicks

0.7%

Indiana Pacers

0.6%

LA Clippers and LA Lakers

0.5%

Philadelphia 76ers

0.5%

Chicago Bulls

0.4%

Memphis Grizzlies

0.3%

Milwaukee Bucks
Cleveland Cavaliers
Detroit Pistons

Source: ESRI

The population of the City of Seattle is well below the league average

2.8%

Denver Nuggets

0.2%
-0.4%
-0.9%

Source: ESRI

of nearly 1.3 million. However, this average is skewed by New York

The city’s population is projected to grow nearly twice the rate of the

City; not including the Knicks and Nets, the average NBA market has

league average of 0.8 percent per year from 2013 through 2018.

less than one million residents.

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Figure 10: 2013 Median Age in NBA Cities

Toronto Raptors
Miami Heat
Seattle
Portland Trail Blazers
Golden State Warriors
Cleveland Cavaliers
Brooklyn Nets & NY Knicks
Detroit Pistons
New Orleans Pelicans
Oklahoma City Thunder
LA Clippers and LA Lakers
Washington Wizards
NBA City Average
Indiana Pacers
Denver Nuggets
Philadelphia 76ers
Orlando Magic
Memphis Grizzlies
Charlotte Bobcats
Atlanta Hawks
Sacramento Kings
Chicago Bulls
San Antonio Spurs
Houston Rockets
Phoenix Suns
Dallas Mavericks
Minnesota Timberwolves
Utaz Jazz
Boston Celtics
Milwaukee Bucks

Figure 11: 2013 Median Household Income in NBA Cities (US)

39.2
39.2
36.8
36.7
36.7
36.0
35.9
35.3
35.1
34.5
34.4
34.3
34.2
34.2
34.2
34.0
33.9
33.7
33.7
33.6
33.5
33.5
33.1
32.7
32.6
32.4
32.2
31.6
31.6
30.8

Source: ESRI

Washington Wizards

$63,340

Seattle

$57,510

Charlotte Bobcats

$50,770

Sacramento Kings

$49,860

Boston Celtics

$49,820

Brooklyn Nets & NY Knicks

$49,220

LA Clippers and LA Lakers

$46,820

Phoenix Suns

$46,530

Golden State Warriors

$45,850

Portland Trail Blazers

$45,080

Oklahoma City Thunder

$44,290

Chicago Bulls

$43,850

Minnesota Timberwolves

$43,840

Denver Nuggets

$43,380

Atlanta Hawks

$42,810

San Antonio Spurs

$42,780

Houston Rockets

$42,150

NBA City Average

$42,040

Orlando Magic

$40,870

Indiana Pacers

$40,700

Utaz Jazz

$40,060

Dallas Mavericks

$39,920

New Orleans Pelicans

$36,560

Milwaukee Bucks

$35,460

Philadelphia 76ers

$35,250

Memphis Grizzlies

$35,010

Miami Heat

$28,320

Detroit Pistons

$26,890

Cleveland Cavaliers

$25,720

Source: ESRI

The median age of the Seattle population is 36.8, compared to the

The median household income in Seattle would be the second

league average of 34.2. Only Toronto and Miami have older

highest in the NBA, at $57,510; only Washington D.C. is higher. The

populations than Seattle.

median for the league was considerably lower at $42,040.

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NATIONAL HOCKEY LEAGUE
Upon the collapse of the National Hockey Association, the National Hockey
League (NHL) formed in 1917. By 1924 the NHL expanded into the United States
with the inauguration of the Boston Bruins, and by 1947 the Stanley Cup trustees
granted the NHL with exclusive rights to compete for the Stanley Cup.
During World War II, the NHL contracted to six teams (known today as the
“Original Six”). In 1967 and 1974 the NHL added six new expansion teams
(totaling 18). The NHL thwarted an upstart professional hockey league, the World Hockey Association
(1972-1979), in the 1970s, and absorbed WHA teams as a result. Since 1991, the league has expanded
from 21 teams to 30 teams.
Gary Bettman became commissioner of the NHL in 1993 and oversaw the NHL’s expansion into nontraditional, American markets – specifically in the Sun Belt and the Southwest. In addition to expansion,
several franchises relocated during the 1990s. These franchises (Minnesota, Quebec, Winnipeg, and
Hartford) relocated from traditional, Northern markets to more unconventional and untested markets for
hockey. Since the relocation, two of these markets that lost teams have since regained franchises
(Minnesota and Winnipeg).
Despite three labor stoppages since 1994 and controversy surrounding the expansion and relocation of
several teams, the NHL is currently in a relatively stable financial position and is experiencing growing
popularity and increasing franchise values. This appreciation is attributed to increasing revenue from a
newly-structured television deal with NBC (a 10-year deal worth $2 billion), the advent of the NHL Winter
Classic, and an increase in demand for sponsorships and merchandise.
The following map shows the location of the NHL’s franchises.

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Figure 12: NHL Team Map

CURRENT NHL ARENAS
This section reviews current NHL facilities with regard to capacity, tenants, attendance, funding,
construction cost, and premium seating. (The New York Islanders will move from Nassau Coliseum to the
Barclays Center in 2015, but this section only considers their current arena.)
NHL Arenas’ Tenants, Age, Attendance and Capacity


Tenants – Fifteen NHL franchises share an arena with another professional franchise, nine of
which are NBA franchises. Most of the other tenants are WNBA, minor league hockey, and Arena
Football League teams.



Attendance – For the 2013-14 NHL season, an average of 17,600 fans attended each game.
Average attendance for each franchise ranged between 13,800 and 22,600 fans.



Capacity – The capacity of NHL venues ranges between 15,000 and more than 21,200. The
average capacity of NHL arenas is 18,400.



Utilization – NHL utilization rates (attendance as a percent of capacity) for the 2013-14 season
ranged between 73 percent and 115 percent. The average utilization rate for the season was 95
percent.

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Table 18: NHL Arena Characteristics

Team

Other Tenants

Anaheim Mighty Ducks
Arizona Coyotes
Boston Bruins
Buffalo Sabres
Calgary Flames
Carolina Hurricanes
Chicago Blackhawks
Colorado Avalanche
Columbus Blue Jackets
Dallas Stars
Detroit Red Wings
Edmonton Oilers
Florida Panthers
Los Angeles Kings
Minnesota Wild
Montreal Canadiens
Nashville Predators
New Jersey Devils
New York Islanders
New York Rangers
Ottawa Senators
Philadelphia Flyers
Pittsburgh Penguins
San Jose Sharks
St. Louis Blues
Tampa Bay Lightning
Toronto Maple Leafs
Vancouver Canucks
Washington Capitals
Winnipeg Jets

--NBA
-WHL
-NBA
NBA
-NBA, AFL
-WHL
-NBA (2), WNBA
-----NBA, WNBA
-NBA
AFL
AFL
-AFL
NBA
-NBA, WNBA
WHL

AVERAGE

Venue

City

Honda Center
Anaheim
Gila River Arena
Glendale
TD Garden
Boston
HSBC Arena
Buffalo
Scotiabank Saddledome
Calgary
RBC Center
Raleigh
United Center
Chicago
Pepsi Center
Denver
Nationwide Arena
Columbus
American Airlines Center
Dallas
Joe Louis Arena
Detroit
Rexall Place
Edmonton
BankAtlantic Center
Sunrise
Staples Center
Los Angeles
Xcel Energy Arena
St. Paul
Bell Centre
Montreal
Bridgestone Arena
Nashville
Prudential Center
Newark
Nassau Coliseum
Uniondale
Madison Square Garden
New York
Canadian Tire Centre
Ottawa
Wells Fargo Center
Philadelphia
Consol Enegy Center
Pittsburgh
SAP Center at San Jose
San Jose
Scottrade Center
St. Louis
Tampa Bay Times Forum
Tampa
Air Canada Centre
Toronto
Rogers Arena
Vancouver
Verizon Center
Washington DC
MTS Centre
Winnipeg

Avg.
Perm.
Year Built Atten. '12- Hockey Utilization
13
Capacity
1993
2003
1995
1996
1983
1999
1994
1999
2000
2001
1979
1974
1998
1999
2000
1996
1996
2007
1972
1968
1996
1996
2010
1993
1994
1996
1999
1995
1997
2004

16,469
13,775
17,565
18,579
19,302
15,483
22,623
16,295
14,698
14,658
22,149
16,828
14,177
19,017
18,505
21,273
16,600
15,257
14,740
18,006
18,108
19,839
18,618
17,133
17,025
18,612
19,446
19,770
18,054
15,004

17,174
19,000
17,565
19,070
19,289
18,680
19,717
18,007
18,144
18,532
20,066
16,389
19,250
18,997
17,954
21,273
17,113
17,625
16,170
18,006
19,153
19,537
18,387
17,562
19,150
19,204
18,819
19,700
18,506
15,004

96%
73%
100%
97%
100%
83%
115%
90%
81%
79%
110%
103%
74%
100%
103%
100%
97%
87%
91%
100%
95%
102%
101%
98%
89%
97%
103%
100%
98%
100%

1994

17,587

18,435

95%

Source: AECOM research

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NHL Arena Funding
Table 19: NHL Arena Funding
Project Cost
Venue

Team

City

Year Built

Funding

Nominal
($M)

Real,
$2014
($M)

% Public

% Private

Honda Center
Anaheim
Anaheim Mighty Ducks
Glendale
Arizona Coyotes
Gila River Arena
Boston
TD Garden
Boston Bruins
HSBC Arena
Buffalo
Buffalo Sabres
Calgary Flames
Scotiabank Saddledome
Calgary
Raleigh
RBC Center
Carolina Hurricanes
United Center
Chicago
Chicago Blackhawks
Pepsi Center
Denver
Colorado Avalanche
Columbus
Columbus Blue Jackets
Nationwide Arena
Dallas
Dallas Stars
American Airlines Center
Detroit
Detroit Red Wings
Joe Louis Arena
Edmonton
Edmonton Oilers
Rexall Place
Florida Panthers
BankAtlantic Center
Sunrise
Los Angeles
LA Kings
Staples Center
St. Paul
Minnesota Wild
Xcel Energy Arena
Montreal Canadiens
Bell Centre
Montreal
Nashville
Nashville Predators
Bridgestone Arena
Prudential Center
Newark
New Jersey Devils
New York Islanders
Nassau Coliseum
Uniondale
New York
New York Rangers
Madison Square Garden
Canadian Tire Centre
Ottawa
Ottawa Senators
Philadelphia Flyers
Wells Fargo Center
Philadelphia
Pittsburgh Penguins
Consol Enegy Center
Pittsburgh
San Jose Sharks
SAP Center at San Jose
San Jose
St. Louis Blues
Scottrade Center
St. Louis
Tampa Bay Lightning
Tampa Bay Times Forum
Tampa
Toronto Maple Leafs
Air Canada Centre
Toronto
Vancouver Canucks
Rogers Arena
Vancouver
Washington Capitals
Verizon Center
Washington DC
MTS Centre
Winnipeg
Winnipeg Jets

1993
2003
1995
1996
1983
1999
1994
1999
2000
2001
1979
1974
1998
1999
2000
1996
1996
2007
1972
1968
1996
1996
2010
1993
1994
1996
1999
1995
1997
2004

$123
$220
$160
$128
$166
$158
$175
$160
$150
$420
$57
$64
$212
$375
$130
$199
$144
$375
$31
$123
$125
$210
$321
$163
$135
$139
$250
$145
$260
$180

$201
$283
$248
$192
$394
$224
$279
$227
$206
$560
$186
$308
$307
$532
$178
$299
$217
$427
$177
$835
$188
$316
$348
$266
$215
$209
$355
$224
$383
$225

100%
82%
0%
44%
100%
84%
9%
0%
0%
30%
100%
100%
87%
0%
74%
0%
100%
56%
100%
100%
0%
11%
32%
82%
46%
62%
0%
0%
23%
70%

0%
18%
100%
56%
0%
16%
91%
100%
100%
70%
0%
0%
13%
100%
26%
100%
0%
44%
0%
0%
100%
89%
68%
18%
54%
38%
100%
100%
77%
30%

AVERAGE

1994

$183

$292

50%

50%

Source: AECOM research



Total Project Cost – In real dollars, reported costs for NHL venues range from $177 million to
$835 million (although cost comparisons are often difficult to make due to local cost levels and
other factors). In real dollars, the average project cost is $292 million. The two newest NHL
arenas, in Newark and Pittsburgh, cost $375 million and $321 million, respectively.



Funding Sources – The public sector, on average, has paid 50 percent of the arena cost and the
private sector has paid 50 percent of the total arena cost.

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NHL Arena Ownership and Management
Table 20: NHL Arena Ownership and Management
Manager
Team

Anaheim Mighty Ducks
Arizona Coyotes
Boston Bruins
Buffalo Sabres
Calgary Flames
Carolina Hurricanes
Chicago Blackhawks
Colorado Avalanche
Columbus Blue Jackets*
Dallas Stars
Detroit Red Wings
Edmonton Oilers
Florida Panthers
LA Kings
Minnesota Wild
Montreal Canadiens
Nashville Predators
New Jersey Devils
New York Islanders
New York Rangers
Ottawa Senators
Philadelphia Flyers
Pittsburgh Penguins
San Jose Sharks
St. Louis Blues
Tampa Bay Lightning
Toronto Maple Leafs
Vancouver Canucks
Washington Capitals
Winnipeg Jets

Venue

Owner

Honda Center
Gila River Arena
TD Garden
HSBC Arena
Scotiabank Saddledome
RBC Center
United Center
Pepsi Center
Nationwide Arena
American Airlines Center
Joe Louis Arena
Rexall Place
BankAtlantic Center
Staples Center
Xcel Energy Arena
Bell Centre
Bridgestone Arena
Prudential Center
Nassau Coliseum
Madison Square Garden
Canadian Tire Centre
Wells Fargo Center
Consol Enegy Center
SAP Center at San Jose
Scottrade Center
Tampa Bay Times Forum
Air Canada Centre
Rogers Arena
Verizon Center
MTS Centre

Public
Public
Private
Public
Public
Public
Private
Private
Public
Public
Public
Public
Public
Private
Public
Private
Public
Public
Public
Private
Private
Private
Public
Public
Public
Public
Private
Private
Private
Private

Public Owner

Private
Team-Related
Manager for
Entity
Public Owner
x
x

x

x

x
x
x
x
x
x
x
x
x

x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x

*Nationwide Arena is operated by a combination of public and private groups (including the Blue Jackets).
Source: AECOM research



Of the 30 NHL arenas, 18 are publicly owned and 12 are owned by team-related and other
private entities.



Of the publicly-owned arenas, seven are managed by the public agency or a private management
company that was hired by the public sector and is not affiliated with an arena tenant. The
remaining 23 facilities are operated directly by the team. This does not include Nationwide Arena,
which is managed by a combination of the Blue Jackets, the Franklin County Convention
Facilities Authority, Ohio State University, and the Nationwide Mutual Insurance Company.

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POTENTIAL EXPANSION AND RELOCATION
Potential NHL Expansion
The NHL’s expansion into non-traditional markets throughout the last 25 years has achieved varying
levels of success on and off the ice. Franchises such as San Jose and Anaheim draw well and
consistently make the playoffs. On the other hand, the Atlanta Thrashers, after just 12 seasons in Atlanta,
have already relocated (to Winnipeg) while others continue to struggle financially (e.g. Arizona, Tampa
Bay, Nashville, and Columbus).
Similar to the NBA, due to factors such as the struggle of many teams in subpar markets and a fear of
further dilution, expansion has not been considered to be a realistic possibility. Commissioner Bettman
recently acknowledged interest from groups in cities such as Las Vegas, Seattle and its suburbs, Kansas
City, and Quebec City. However, he said that expansion is not a serious consideration. Other observers
have noted that the league’s new alignment, which has two fewer teams in the Western Conference than
the East, provides for the addition of two new western markets, which can be provided from relocation of
existing franchises.
Potential NHL Relocation
In the NHL, there are currently no franchises that are imminent threats to relocate. In the last couple of
years, both the New York Islanders and Arizona Coyotes were legitimate candidates for relocation, but
the Islanders agreed to move from Long Island to Brooklyn’s new Barclays Center, and in 2013, the
Coyotes committed to its Jobing.com Arena in Glendale for 15 years. (However, had the Glendale City
Council not approved the team’s new lease, it reportedly would have moved to Seattle and played at
KeyArena until the new SoDo arena was built.)
Potential Destinations
Several locations continue to surface as potential destinations for a new or relocated NHL franchise.
These destinations most prominently include the Seattle area, Kansas City, and Las Vegas in the US,
and Quebec City in Canada.
Seattle, Kansas City, and Las Vegas are also potential NBA destinations (although AEG, which owns
Kansas City’s Sprint Center, says it is not a candidate for a team), and both are described in the NBA
analysis. However, in Las Vegas, a prospective NHL ownership group has begun taking refundable
deposits on season tickets. In the case of Seattle, the City and King County have offered to contribute
significantly more towards construction should the arena attract an NHL team in addition to an NBA team.

Suburban Seattle
Two Seattle suburbs – Bellevue and Tukwila – have been the focus of other local efforts to bring an NHL
franchise to the area. According to reports, potential sites and team ownership groups in both cities have
been identified, although it is thought that a new arena at either location would primarily have to rely on
private funding due to an inability of either city to significantly contribute to this type and scale of

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development. In addition, should a Seattle franchise be an expansion team, ownership would also have to
pay an expansion fee (of approximately $400 to $500 million, according to reports) to the NHL.
Most recently, a potential developer/team owner has identified its interest in a specific site in Tukwila (at
West Valley Highway and I-405) for a privately-funded facility that could be operational as soon as the fall
of 2017.

Quebec City
Quebec is a former NHL market (the Nordiques became the Phoenix Coyotes in 1995) that is preparing to
regain a franchise. Two years ago, Quebec City’s mayor announced that construction of a new $400million arena (Quebecor Arena) and ground was broken that September; the facility is currently under
construction. The facility is planned to be completed in 2015. The 18,500-seat arena will be located near
downtown and would be managed by media company Quebecor, which also plans to own the facility’s
hockey tenant. Quebecor is also paying $63.5 million for arena naming rights ($33 million if a team isn’t
secured).
The city’s current arena, Colisée Pepsi, is the former home of the Nordiques but is not considered to be
NHL-ready, although the city recently approved $7 million in renovations.

Potential/Upcoming Arena Plans
This section highlights some of the potential and upcoming new NHL arena projects and renovation
projects. This will further define expectations for a state-of-the-art facility in the NHL.

Detroit Red Wings
Since 1979, the Red Wings have played in Detroit’s Joe Louis Arena, which is one of the NHL’s oldest
facilities. In March, the Detroit City Council approved a final lease with the team for Joe Louis Arena,
which cleared the way for a new arena.
The new arena will anchor a downtown entertainment district. Development of the $450-million, 18,000seat arena will include retail and office space. According to current plans, the project will receive $285
million in public funding, with the remaining $365 million being provided by Olympia Entertainment, which
is a division of the company that owns the Red Wings.

Edmonton – Rogers Place
In late 2011, Edmonton’s city council approved development of a new downtown arena to replace the
Oilers’ Rexall Place, which, aside from Madison Square Garden (which just completed a $1-billion
renovation), is the oldest arena in the NHL. The 18,641-seat arena will be known as Rogers Place,
following the purchase of naming rights by Rogers Communications. The development will also include a
community ice rink, a winter garden, and public transit improvements.

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Funding for the nearly $600-million development is being provided by the following sources: $279 million
from incremental taxes generated on-site, $125 million from a ticket surcharge, $128 million from lease
payments from the team, $24 million from the team, and an additional $25 million from other public
sources.
Construction for the new arena began in March 2014, and the Oilers plan to begin playing in Rogers
Place for the 2016-17 season.

NHL TEAM OPERATIONS
The following section examines operating revenues and expenditures for NHL franchises, according to
Forbes. The table below illustrates franchises valuations, revenues, and operating income for the 20132014 season. These valuations only take the teams into account and do not analyze them as a piece of a
larger entertainment and/or real estate entity, as some are.
Table 21: NHL Franchise Financial Metrics

Rank

1

Team

2
3
4
5
6
7
8
9
10
11

Toronto Maple Leafs
New York Rangers
Montreal Canadiens
Chicago Blackhawks
Vancouver Canucks
Boston Bruins
Philadelphia Flyers
Los Angeles Kings
Detroit Red Wings
Pittsburgh Penguins
Washington Capitals

12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30

League Average
Edmonton Oilers
Calgary Flames
San Jose Sharks
Dallas Stars
Ottawa Senators
Minnesota Wild
Anaheim Ducks
Colorado Avalanche
Winnipeg Jets
New Jersey Devils
New York Islanders
Buffalo Sabres
Nashville Predators
St Louis Blues
Tampa Bay Lightning
Arizona Coyotes
Carolina Hurricanes
Columbus Blue Jackets
Florida Panthers

Current
Value
($mil)

1-Yr Value
Operating
Revenue
Change
Income
($mil)
($mil)
(%)

$1,300

13%

$190

$71

$1,100
$1,000
$825
$800
$750
$625
$580
$570
$565
$500
$490

29%
29%
32%
14%
25%
25%
29%
21%
18%
21%
19%

$217
$187
$172
$154
$164
$136
$146
$134
$141
$117
$123

$84
$60
$50
$47
$35
$11
$21
$15
$22
$13
$15

$475
$451
$425
$420
$400
$370
$365
$360
$358
$330
$300
$288
$250
$235
$230
$225
$220
$200
$190

19%
7%
5%
26%
5%
12%
22%
7%
5%
3%
54%
15%
22%
27%
28%
12%
18%
14%
-21%

$119
$122
$117
$113
$117
$111
$107
$104
$102
$111
$83
$103
$98
$98
$97
$80
$91
$86
$83

$25
$22
$6
$4
$23
($5)
($4)
$8
$3
($2)
($3)
$4
$2
($7)
($12)
($5)
($14)
($6)
($16)

Source: Forbes

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

Team Valuation – The average NHL team’s value is $490 million. The Toronto Maple Leafs led
the NHL at $1.3 billion, while the Florida Panthers rank last ($190 million). Similar to the NBA but
to a lesser extent, franchise values have increased significantly in recent years due to factors
such as increasing media revenues, growing league popularity, and current labor peace; just
three seasons earlier, the average NHL franchise was valued at $241 million.



Total Revenue – Total revenue for NHL franchises ranged between $80 million (Arizona
Coyotes) and $217 million (New York Rangers) during the 2013-2014 season. On average, NHL
teams generated roughly $123 million during the last fully-completed season.



Operating Income – Operating incomes in the NHL ranged between a net loss of $16 million
(Florida) to a net gain of $84 million (New York Rangers). On average, NHL teams recorded a
$15 million net gain for the 2013-2014 season, according to Forbes. However, based on these
figures, ten teams (one-third of the league) was not profitable.

Compared to the NBA, NHL franchises are generally less profitable. In the NBA, only one team reportedly
lost money last season, and the average team earned a $23-million profit; in the NHL, 10 teams lost
money, with an average profit of $15 million. In general, despite the NHL’s more recent financial stability,
disparity in wealth is evident at the franchise level. Many teams located in major American markets and
Canadian cities thrive, while many of the remaining franchises suffer mightily. Many of these less
financially stable franchises often require public subsidies in order to stay solvent.

NHL MARKET ANALYSIS
Similar to the NBA, we compared various demographic characteristics of Seattle to those of the 27 NHL
markets that host 30 teams. The following charts compare Seattle with the current NHL markets.

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Metro Areas
Figure 14: 2013-18 Population Growth in NHL MSAs (US)

Figure 13: 2013 MSA Population by NHL Team
New York Islanders

19,764,907

Anaheim Ducks & LA Kings

Carolina Hurricanes

12,984,125

Chicago Blackhawks

Dallas Stars

Dallas Stars

6,691,748

Colorado Avalanche

6,019,190

Nashville Predators

Washington Capitals

5,800,253

Washington Capitals

Florida Panthers

5,657,903

Toronto Maple Leafs

5,583,064

Boston Bruins

4,607,475

NHL MSA Average

4,357,841

Phoenix Coyotes

4,333,245

Detroit Red Wings
Seattle
Minnesota Wild

4,254,995
3,824,221
3,548,097

1.2%

Florida Panthers

1.1%
1.1%

Tampa Bay Lightning

0.8%

Columbus Blue Jackets

0.8%

3,403,898
2,842,211
2,805,252

NHL MSA Average

Colorado Avalanche

2,633,643

Pittsburgh Penguins

2,359,358
2,313,328
1,938,472

San Jose Sharks

1,881,685

Nashville Predators

1,736,380

Boston Bruins

1,236,324
1,214,839

St. Louis Blues

Carolina Hurricanes

1,196,126

Edmonton Oilers

1,159,869

Source: ESRI

0.4%
0.3%
0.2%

Pittsburgh Penguins

0.1%

Buffalo Sabres

-0.1%

Detroit Red Wings

-0.1%

1,132,853
730,018

0.5%

Philadelphia Flyers

Calgary Flames

0.7%

0.6%

New York Islanders

Ottawa Senators

0.7%

0.6%

Anaheim Ducks & LA Kings

Chicago Blackhawks

Winnipeg Jets

1.3%
1.2%

San Jose Sharks

St. Louis Blues

Buffalo Sabres

1.4%

Seattle

Tampa Bay Lightning

Vancouver Canucks

1.4%

Phoenix Coyotes

Minnesota Wild

Columbus Blue Jackets

1.6%

9,556,315

Philadelphia Flyers

Montreal Canadiens

2.0%

Source: ESRI

The average population for MSAs with NHL teams was 4.3 million in

Population in NHL MSAs US is expected to increase by 0.7 percent

2013. However, this average is skewed by New York and Los

through 2018, but 1.2 percent per year in the Seattle MSA. Similar

Angeles; the median market population is just 2.8 million. The

data is not available for Canadian cities.

population in the Seattle MSA was 3.5 million.
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Figure 15: 2013 Median Age in NHL MSAs

Figure 16: 2013 Median Household Income in NHL MSAs (US)

Pittsburgh Penguins

43.3

Tampa Bay Lightning

42.0

Buffalo Sabres

41.2

Florida Panthers

Washington Capitals

40.2

Detroit Red Wings

39.8

Montreal Canadiens

39.7

$83,780

Boston Bruins

40.5

Vancouver Canucks

$87,700

San Jose Sharks

$68,380

Seattle

$64,910

Minnesota Wild

$63,560
$62,660

Winnipeg Jets

39.2

New York Islanders

Ottawa Senators

39.1

Philadelphia Flyers

$59,200

Boston Bruins

38.9

Colorado Avalanche

Toronto Maple Leafs

$58,540

38.6

St. Louis Blues

38.6

Carolina Hurricanes

$57,910

Philadelphia Flyers

38.5

NHL MSA Average

$57,720

New York Islanders

38.1

Chicago Blackhawks

$57,700

NHL MSA Average

38.0

Seattle

Anaheim Ducks & LA Kings

$57,300

36.7

Dallas Stars

$56,590

36.6

Phoenix Coyotes

$52,010

St. Louis Blues

$51,910

37.3

San Jose Sharks
Washington Capitals
Minnesota Wild

36.6

Edmonton Oilers

36.5

Nashville Predators

36.5

Columbus Blue Jackets

$51,460

Calgary Flames

36.4

Nashville Predators

$51,060

Colorado Avalanche

36.2

Chicago Blackhawks

36.2

Detroit Red Wings

Columbus Blue Jackets

35.8

Buffalo Sabres

Carolina Hurricanes

35.4

Pittsburgh Penguins

Anaheim Ducks & LA Kings

35.3

Phoenix Coyotes

35.0

Dallas Stars

34.0

Source: ESRI

$50,590
$47,550
$47,360

Florida Panthers

$45,240

Tampa Bay Lightning

$43,950

Source: ESRI

The median age of MSAs with NHL teams is 38, which is slightly older

In 2013, the median household income for US-based NHL markets

than the median age in the Seattle MSA (37.3).

was approximately $57,700. Seattle would have the league’s fourthhighest income, behind only Washington, San Jose, and Boston.

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Figure 17: 2012 Number of Firms in NHL MSAs (US)

New York Islanders

556,888

Anaheim Ducks & LA Kings

338,007

Chicago Blackhawks

238,037

Florida Panthers

176,882

Dallas Stars

145,968

Philadelphia Flyers

143,951

Washington Capitals

143,490

NHL MSA Average

130,053

Boston Bruins

123,575

Seattle

97,180

Detroit Red Wings

97,060

Minnesota Wild

92,049

Phoenix Coyotes

87,871

Colorado Avalanche

74,954

Tampa Bay Lightning

70,910

St. Louis Blues
Pittsburgh Penguins

69,587
59,227

San Jose Sharks

46,543

Columbus Blue Jackets

40,151

Nashville Predators

39,360

Carolina Hurricanes
Buffalo Sabres

Figure 18: 2012 Share of Firms with More than 500 Jobs (US)

29,507
27,049

San Jose Sharks

0.38%

Columbus Blue Jackets

0.36%

Dallas Stars

0.34%

Boston Bruins

0.34%

Minnesota Wild

0.33%

Pittsburgh Penguins

0.31%

Buffalo Sabres

0.30%

Chicago Blackhawks

0.29%

Phoenix Coyotes

0.29%

Philadelphia Flyers

0.29%

Nashville Predators

0.28%

Seattle

0.28%

NHL MSA Average

0.28%

Washington Capitals

0.28%

Detroit Red Wings

0.26%

St. Louis Blues

0.25%

New York Islanders

0.24%

Tampa Bay Lightning

0.23%

Colorado Avalanche

0.23%

Anaheim Ducks & LA Kings

0.22%

Carolina Hurricanes

0.20%

Florida Panthers

0.14%

Source: U.S. Census
Source: U.S. Census

With 97,180 firms in the Seattle MSA, its corporate market is smaller
than the league average of 130,000 (for US markets only). However,

The share of firms with more than 500 employees in the Seattle MSA

not including New York, the league average decreases to 108,000,

was equal to the average for all NHL MSA markets. The largest share

and the league median is just 90,000.

was in the San Jose MSA.

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Cities
On the following pages, similar data was analyzed at the city level for markets with NHL teams.
Figure 19: 2013 City Population by NHL Team
NY Islanders and NY Rangers
Anaheim Ducks & LA Kings
Chicago Blackhawks
Toronto Maple Leafs
Montreal Canadiens
Philadelphia Flyers
Phoenix Coyotes
NHL City Average
Dallas Stars
Calgary Flames
San Jose Sharks
Ottawa Senators
Edmonton Oilers
Columbus Blue Jackets
Detroit Red Wings
Winnipeg Jets
Boston Bruins
Seattle
Colorado Avalanche
Washington Capitals
Nashville Predators
Vancouver Canucks
Carolina Hurricanes
Minnesota Wild
Tampa Bay Lightning
St. Louis Blues
Pittsburgh Penguins
New Jersey Devils
Buffalo Sabres
Florida Panthers

Figure 20: 2013-18 Population Growth in NHL Cities (US)
8,305,061

3,843,507
2,732,022
2,615,060
1,649,519
1,544,321
1,485,522
1,246,340
1,225,901
1,096,833
967,085
883,391
812,201
802,441
679,309
663,617
631,445
631,253
628,858
621,686
621,021
603,502
424,641
388,700
346,322
319,351
305,110
276,242
258,553
166,295

Source: ESRI

Carolina Hurricanes

2.0%

Colorado Avalanche

2.0%

Washington Capitals

1.6%

Seattle

1.4%

Nashville Predators

1.3%

Phoenix Coyotes

1.2%

Dallas Stars

1.2%

Tampa Bay Lightning

1.2%

San Jose Sharks

1.0%

Florida Panthers

1.0%

Boston Bruins

1.0%

Columbus Blue Jackets

0.9%

Minnesota Wild

0.8%

NHL City Average

0.7%

NY Islanders and NY Rangers

0.7%

Anaheim Ducks & LA Kings

0.5%

Philadelphia Flyers

0.5%

Chicago Blackhawks

0.4%

New Jersey Devils

0.2%

Pittsburgh Penguins

0.0%

St. Louis Blues

0.0%

Buffalo Sabres
Detroit Red Wings

-0.2%
-0.9%

Source: ESRI

The population in Seattle is approximately half of the NHL average of

The city population is projected to experience strong growth through

1.2 million. However, the league median is 671,000, which is just six

2018 (1.4 percent annually). The league average for US-based teams

percent larger than Seattle.

is expected to be 0.7 percent per year over the same period.

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Figure 21: 2013 Median Age in NHL Cities

Florida Panthers
Vancouver Canucks
Toronto Maple Leafs
Ottawa Senators
Winnipeg Jets
Montreal Canadiens
Seattle
Calgary Flames
Edmonton Oilers
NY Islanders and NY Rangers
San Jose Sharks
Detroit Red Wings
NHL City Average
Tampa Bay Lightning
St. Louis Blues
Nashville Predators
Anaheim Ducks & LA Kings
Washington Capitals
Colorado Avalanche
Philadelphia Flyers
Pittsburgh Penguins
Buffalo Sabres
Chicago Blackhawks
Carolina Hurricanes
New Jersey Devils
Phoenix Coyotes
Dallas Stars
Minnesota Wild
Columbus Blue Jackets
Boston Bruins

Figure 22: 2013 Median Household Income in NHL Cities (US)

43.0
39.7
39.2
39.2
39.0
38.6
36.8
36.4
36.0
35.9
35.7
35.3
35.2
35.0
34.6
34.4
34.4
34.3
34.2
34.0
33.8
33.8
33.5
32.8
32.8
32.6
32.4
32.2
32.1
31.6

Source: ESRI

San Jose Sharks

$77,270

Washington Capitals

$63,340

Seattle

$57,510

Carolina Hurricanes

$51,660

Boston Bruins

$49,820

NY Islanders and NY Rangers

$49,220

Anaheim Ducks & LA Kings

$46,820

Phoenix Coyotes

$46,530

Florida Panthers

$46,180

NHL City Average

$43,860

Chicago Blackhawks

$43,850

Minnesota Wild

$43,840

Nashville Predators

$43,430

Colorado Avalanche

$43,380

Tampa Bay Lightning

$41,110

Columbus Blue Jackets

$40,340

Dallas Stars

$39,920

Philadelphia Flyers

$35,250

New Jersey Devils

$35,090

Pittsburgh Penguins

$34,130

St. Louis Blues

$32,000

Buffalo Sabres

$31,040

Detroit Red Wings

$26,890

Source: ESRI

The City of Seattle had a median age of 36.8 in 2013, which was

Only two current NHL markets (San Jose and Washington) had higher

more than a year older than the average NHL city, which had a

median household income than Seattle in 2013. The leaguewide

median age of 35.2.

average for US-based teams was approximately $43,900.

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5. Other Potential Entertainment Uses
As part of our assignment, we evaluated the potential for KeyArena to be repurposed for attractions and
entertainment uses other than sports and entertainment, characterized as “Scenario D.” In order to
evaluate the market potential for such uses, we conducted the following tasks:


Assessed the size, growth, demographics, and characteristics of available resident and tourist
markets;



Examined the local competitive market for attractions of all types;



Conducted case studies of other arena repurpose projects; and



Evaluated entertainment and attraction alternatives according to the development criteria for
KeyArena and the mission of Seattle Center.

REVIEW OF AVAILABLE MARKETS
The size and characteristics of the resident and tourist markets from which attractions of all types draw
attendance are important factors in determining potential audience demand. As part of this study,
AECOM analyzed resident and visitor volume estimates in the Seattle region and also collected basic
data on resident demographics and tourism characteristics.
This section summarizes the size and major characteristics of the available markets and is divided into
the following sections:


Overview of the resident market,



Key characteristics of the visitor market, and



Analysis and summary of all available markets.

RESIDENT MARKET
Visitation to attractions of all types has a direct relationship to market proximity. For the purposes of this
study, AECOM has divided the resident market for potential entertainment uses at Seattle Center into two
market segments—primary and secondary. Residents travelling from farther than the secondary market
generally stay overnight and are included as part of the overnight visitor market.
We divided the resident market into two segments based the following drive time metrics:


Primary market – 60 minutes from Seattle Center.

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

Secondary market – Between 60 and 120 minutes from Seattle Center.

Figure 23: Map of Resident Market Segments for Seattle Center

Source: ESRI

Resident Market Size and Growth
The total resident market population is 4.7 million, with the majority, almost 75 percent, living in the
closer-in primary market, with only 25 percent of the population located in the secondary market. As
shown below, the primary market is roughly the size of the Seattle Metropolitan Statistical Area (MSA).
Figure 24: Comparison of Available Resident Market to Seattle MSA and King County Population

Drive Times

1 hour

2 hour

4,700,000

King County
MSA

3,579,892

Seattle City

639,000
0

1000000

2000000

3000000

4000000

5000000

The resident market has undergone rapid growth in the last 20 years, from 2.6 million in 1990 to 3.5
million in 2010, and is expected to grow more modestly in the future.

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Figure 25: Historic Population Growth by County

4,000,000
3,500,000
3,000,000

3,043,900

2,819,200

3,439,800

3,220,000

2,559,100

2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
1990
King County

1995
Pierce County

2000
2005
Snohomish County

2010
Region Total

Resident Market Demographics
Age, income, and education level are all important market considerations in evaluating the potential for
attractions. Generally speaking, major mass-market entertainment uses prefer to be located around large
family populations, while higher income and education demographics favor cultural attractions.

Age
The Seattle resident market generally mirrors trends in the United States with respect to age. The primary
market has a slightly younger population with a relatively higher population between the ages of 25 and
54. The secondary market has a greater population over the age of 65.
Figure 26: Seattle Resident Market Age Profile, 2014

18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
0-4

5-15

15-25

Primary

25-35

35-45

Secondary

45-55

55-65
Washington

65-75

75-85

85+

US

Source: ESRI, AECOM

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Income
As shown below, the Seattle region has high income levels relative to the state of Washington and the
United States. The primary market has the highest income levels, with a median household income of
nearly $67,000 compared to $58,000 for Washington and just over $52,000 for the United States. (The
median citywide income differs from the amount shown in Figures 11 and 22 because of the use of
different years’ data.)
Figure 27: Seattle Resident Market Median Household Income Comparisons, 2014

$66,877

Primary

$55,510

$58,007

Secondary

Washington

$61,409
$52,076

US

Seattle City

Source: ESRI, AECOM

Education
Educational attainment is very high in the Seattle market, with 49 percent of the primary market holding
college and advanced degrees, compared to 43 percent and 38 percent in Washington and the United
States, respectively.
Figure 28: Seattle Resident Market Educational Attainment (age 25+), 2014
64.8%
48.7%
42.8%

39.0%

8.7%

Primary

9.1%

Secondary
No High School degree

37.9%

10.3%

Washington

14.8%
7.2%

US

Seattle City

Asso/Bach/Grad degrees

Source: ESRI, AECOM

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TOURIST MARKET
Tourism has been very strong in Seattle, with overnight leisure visitors, the primary market for attractions,
more than doubling over the past 15 years. The current estimate of overnight visitors is 18.6 million. It
should be noted that Visit Seattle just recently revised its methodology for estimating the number of
visitors to Seattle, which resulted in a higher estimate. The new method is intended to more accurately
count those visiting friends and relatives (the VFR market).
As shown in the figure below, tourism has grown steadily over the years, with a slight decrease in 2009
during the recession. Since then tourism has continued to grow and surpassed levels prior to the
recession.
Figure 29: Total Overnight Visitors to Seattle, 1998-2013
1

18,600

8,050

8,650

8,510

8,730

9,410

9,340

9,300

10,200

10,679

1

15,624
3,784

6,142

6,042

5,936

7,340

6,974

7,440

8,160

8,945

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20132013N

Leisure

Business

Convention

Other

This is our internal estimate of a “normalized” 2013 number using the previous methodology, for comparison purposes only.
Source: Visit Seattle, AECOM

A few important characteristics related to overall tourism and shown in the following figures include:


Leisure visitors account for 84 percent of total visitation, which is a positive factor for attractions.



Approximately 92 percent of visitors were domestic travelers, with a relatively small but growing
number of international tourists.



There is significant peaking during summer months, in part due to weather in the winter and a
largely domestic tourist market.

Figure 30: Total Visitors by Origin, 2013

Domestic
92%
International
8%
Source: Visit Seattle

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Figure 31: Overnight Visitors Season of Trip, 2013

25%

21%

Jan-Mar

Apr-Jun

30%
24%

July-Sept

Oct-Dec

Source: Visit Seattle

Seattle Tourism Visitor Profile
Key characteristics of the Seattle tourist market are as follows:


Overnight visitors stay on average of four nights.



People visiting friends and relatives represent 52 percent of the total, with 33 percent staying in a
friend’s dwelling.



The average party size is 2.6 people, which indicates that Seattle is not a major market for family
visitors.



Overnight visitors to Seattle are primarily adults (78 percent), the majority of whom do not have
children under the age of 18 in their household.



Over 60 percent of Seattle’s overnight tourists have college degrees or more education.



Income levels among visitors are strong, with nearly 25 percent of all visitors with household
incomes greater than $100,000.



After Washington, the greatest source markets for domestic overnight tourism to Seattle are
California (16 percent), Oregon (12 percent), and New York (5 percent).



Shopping, dining, and visiting landmarks and historic sites are the most popular activity.

Figure 32: Overnight Visitors Length of Stay, 2013

31%
25%

Average 4.0 nights

19%
11%

9%
4%

1 night

2 nights

3-4 nights

5-6 nights

7-13 nights

14+ nights

Source: Visit Seattle

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Figure 33: Visitor Composition, 2013

Children
22%

Adults
78%

Source: Visit Seattle

Figure 34: Overnight Visitors Educational Attainment, 2013

42%
25%

19%

Post graduate

College
graduate

14%

Some college

1%

High School or
less

Other

Source: Visit Seattle

Figure 35: Overnight Visitors Household Income, 2013

Under $50k

40%

$50k-74.9k

23%

$50k-99.9k

15%

$100k-149.9k

16%

$150k+

7%

Source: Visit Seattle

Figure 36: Overnight Visitors State of Origin, 2013

32%
16%

Washington

California

12%

Oregon

5%

3%

3%

New York

Idaho

Texas

Source: Visit Seattle

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Figure 37: Activities and Experiences, 2013

Art gallery

9%

Zoo

9%

Theater

9%

Casino

9%

Hiking/Backpacking

9%

Bar/Disco/Nightclub

12%

National/State park

12%

Beach/Waterfront

16%

Museum

16%

Landmark/Historic site

17%

Fine dining

24%

Shopping

39%

Source: Visit Seattle

SUMMARY OF AVAILABLE MARKETS
Size and Growth
Overall, the Seattle resident and tourist markets are large and growing. The resident market has a
population of 4.75 million and is expected to grow to over 5 million by 2020, with most of this population
located in the primary market of up to a one-hour drive time to Seattle Center. The overnight leisure
tourist market is very large at 16 million visitors, and is projected to grow to over 17 million by 2020. In
total, the size of the available market for a potential attraction at Seattle Center is 20.8 million, growing to
22.3 million by 2020.
Table 22: Summary of Available Markets

Summary of Available Markets

2010

2015

2020

Primary Market (0-1 hr)

3,352,000

3,531,000

3,750,000

Secondary Market (1-2 hr)

1,186,000

1,219,000

1,257,000

4,538,000

4,750,000

5,007,000

7,440,000

16,096,000

17,340,000

11,978,000

20,846,000

22,347,000

Resident Market

Total Resident Market
Overnight Leisure Tourists
Total Available Markets

1

Source: Visit Seattle, Longwoods Travel USA, ESRI, AECOM
1

Methodology for counting overnight visitors changed in 2013

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Summary of Key Characteristics and Implications for Attraction Potential
Overall, the resident and tourist markets in Seattle are of very high quality and very favorable for
attraction potential. Specifically:


The resident market is large, with steady growth.



The primary market within a 30-minute drive to Seattle Center includes the majority of the
population, which is positive since they are closer in and generally more likely to attend an
attraction at Settle Center.



The primary market includes a young, professional demographic.



The resident market overall has relatively high income and very high education levels compared
to national averages. Attendance at cultural attractions tends to be correlated with high education
and income levels, and attractions of all types benefit from increased discretionary income.



The tourist market is very large and growing, with a large percentage of leisure visitors.



The length of stay is fairly long, which is favorable as it allows tourists to have time to visit
attractions beyond the “must-see” attractions.



Tourists to Seattle tend to be highly educated with fairly high incomes.



The tourist market exhibits strong peaking in the summer months, which is challenging for
attractions since they often need to build larger visitor experience areas to accommodate
peaking.

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EVALUATION OF SEATTLE ATTRACTIONS MARKET
AECOM reviewed key attendance, financial, and operations metrics for the following attractions in the
Seattle market:
Major Attractions


Space Needle



Woodland Park Zoo



Pacific Science Center



Seattle Aquarium



Wild Waves Theme Park

Mid-Tier Attractions


Chihuly Garden and Glass



EMP



Museum of Flight



Seattle Art Museum



Seattle Great Wheel



Sky View Observatory



UW Botanic Gardens

Specialty Museums


Olympic Sculpture Park



Future of Flight Aviation Center & Boeing Tour



Museum of History and Industry



Seattle Children's Museum



Burke Museum of Natural History and Culture

Key findings related to the Seattle attractions market are as follows:


Overall, Seattle has a very strong existing attractions market with a wide array of product
offerings. The market has multiple view attractions, an aquarium, zoo, garden attractions, many
high quality museums and cultural attractions, specialty industry attractions unique to Seattle and
a combination water and amusement park. In addition, the Pike Place Market, boat cruises, and
other waterfront activities generate high levels of visitation.



The attractions in Seattle exhibit strong attendance, with major attractions reporting over one
million visitors annually.

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

Penetration rates of both resident and tourist markets are very healthy, with resident market
penetration rates averaging around five percent and tourist market penetration rates averaging
two percent and going as high as six percent, which is very strong for a tourist market as large as
Seattle’s.



Pricing is extremely strong for attractions in Seattle, likely due to the large market of tourists who
are less price sensitive, high incomes in the resident market, and high quality attractions.

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Table 23: Seattle Attractions Characteristics and Performance Metrics

2013
Attendance 1

Admission Rates
Adult
Senior
Child

Square Feet
Visitors
Gross
Exhibit per ESF

Visitor Origin
Resident Tourist

Penetration Rate
Resident Tourist

Major Attractions
Space Needle
Woodland Park Zoo
Pacific Science Center
Seattle Aquarium
Wild Waves Theme Park 3

1,193,000
1,139,000
1,000,000
803,000
n/a

$21.00
$18.75
$19.50
$21.95
$34.99

$20.00
$18.75
$17.50
$21.95
$29.99

$14.00
n/a
$11.75 92 acres
$14.50 166,993
$14.95 108,940
$29.99 70 acres

n/a
n/a
66,616
35,101
n/a

n/a
n/a
15.0
22.9
n/a

22%
20%
70%
14%
n/a

78%
80%
30%
86%
n/a

5.6%
4.8%
14.8%
2.4%
n/a

6.0%
5.8%
1.9%
4.4%
n/a

Mid Tier
Chihuly Garden and Glass
EMP
Seattle Great Wheel
Museum of Flight
Seattle Art Museum
SkyView Observatory
UW Botanic Gardens

572,000
559,000
500,000e
458,000
315,000
200,000e
n/a

$21.00
$23.00
$13.00
$19.00
$19.50
$12.50
Free

$19.00
$20.00
$11.00
$19.00
$17.50
$9.00
Free

$14.00
27,000
$17.00 140,000
$8.50
n/a
$11.00
n/a
$12.50
n/a
$9.00
n/a
Free 230 acres

19,000
37,000
n/a
178,000
70,000
n/a
n/a

30.1
15.1
n/a
2.6
4.5
n/a
n/a

25%
55%
n/a
40%
75%
n/a
n/a

75%
45%
n/a
60%
25%
n/a
n/a

3.0%
6.5%
n/a
3.9%
5.0%
n/a
n/a

2.7%
1.6%
n/a
1.8%
0.5%
n/a
n/a

Specialty Museums 2
Olympic Sculpture Park

270,000

Free

Free

Free

9 acres

n/a

n/a

75%

25%

4.3%

0.4%

Future of Flight Aviation Center & Boeing Tour
Museum of History and Industry
Seattle Children's Museum

248,000
215,000
175,000

$10.00
$17.00
$8.25

$10.00
$15.00
$7.25

$10.00
Free
$8.25

73,000
50,000
32,000

28,000
40,000
22,000

8.9
5.4
8.0

45%
44%
58%

65%
56%
42%

2.4%
2.0%
2.2%

1.0%
0.8%
0.5%

Burke Museum of Natural History and Culture

102,000

$10.00

$8.00

$7.50

70,402

18,984

5.4

75%

25%

1.6%

0.2%

Overall Average
Overall Median

542,231
458,000

$17.96
$19.00

$16.26
$17.50

$13.07
$12.13

83,542
71,701

51,470
36,051

11.8
8.4

48%
45%

53%
56%

4.5%
3.9%

2.1%
1.6%

1 / Excludes rental and fundraising attendance.
2 / Excludes specialty museums with attendance less than 100,000.
3 / Winter discounted pricing.
Source: Official Museum Directory, Individual Institutions, AECOM

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AGGREGATE ATTRACTION ATTENDANCE
Aggregate attraction attendance is a metric that AECOM uses to evaluate attractions in different cities
relative to market size. The ratio is useful in assessing the market potential for additional attractions in a
given market and to understand if markets are under or over supplied. As shown in the figure below,
Seattle performs relatively well and appears to be adequately supplied, but may have some limited
capacity for additional attractions as long as they are appropriate for the market.
Figure 38: Aggregate Attraction Attendance per Capita by Market

Ratio of AAA to Total Market Size

0.70

0.60

Chicago

0.50
San Francisco
0.40

Pittsburgh

Seattle

Indianapolis

Atlanta

Kansas City
Portland

0.30

San Diego
0.20

0.10

0.00
0

5,000,000

10,000,000
15,000,000
Total Market Size

20,000,000

25,000,000

Source: AECOM

ARENA REUSE PROJECTS
As part of our analysis, AECOM examined a number of arena and stadium reuse projects, collecting
information on original uses, development costs and reuse developments. We examined the following
former arenas:


Wachovia Spectrum, Philadelphia, Pennsylvania – demolished and replaced with a retail, dining,
and entertainment venue; hotel currently planned.



Civic Arena, Pittsburgh, Pennsylvania – currently vacant; plans to demolish and develop a mixeduse project with affordable and market rate housing, retail, and office space.



Montreal Forum, Montreal, Quebec – reused for AMC Theaters and retail.



Memphis Pyramid, Memphis, Tennessee – reused for a Bass Pro Shop, retail, and hotel.



Maple Leaf Gardens, Toronto, Ontario – redeveloped into a smaller arena with retail and parking.

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

Houston Astrodome, Houston, Texas – currently vacant, will be used for parking.



Arsenal Stadium, London – reused for housing and a public park.



Las Arenas, Barcelona, Spain – reused for a shopping mall.



The Summit, Houston, Texas – reused for a “megachurch.”

CASE STUDIES
Case studies of key arenas examined as part of this study are provided below.
Wachovia Spectrum, Philadelphia, PA
Wachovia Spectrum opened in 1967 with a capacity of over 18,000 seats and was built for a total cost of
$50 million. This former home to both NBA and NHL teams was closed in 2009 due to the building of an
adjacent arena and demolished in 2011. The site has been redeveloped and now includes XFINITY Live!,
a retail, dining and entertainment, and dining center adjacent to the Wells Fargo Center. A 300-room hotel
is also planned for the site.

Civic Arena, Pittsburgh, PA

The Civic Arena in Pittsburgh opened in 1961 and was subsequently renovated twice (1986 and 1993). It
included a total 170,000 square feet and 18,039 seats, built for a total cost of $22 million. Prior to closing
in 2010, the facility was host to the Pittsburgh Penguins (NHL). After demolition in 2012, the site was

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converted into a multi-purpose sports and entertainment area, with planned redevelopment to include
housing, affordable and market rate, as well as retail and office space.
Montreal Forum, Quebec
The Montreal Forum, home to the Quebec Canadiens, was opened in 1924 and renovated twice, in 1949
and 1968. It included 18,575 seats, built at a cost of $1.5 million ($20.5 million in 2014$). In 1997, the
facility was designated as a National Historic Site of Canada. In redevelopment, the interior has been
reconfigured to include AMC Theaters and retail shopping. Center Ice was also recreated in the new
interior as well as a memorial to the original arena.

Memphis Pyramid, Tennessee

The Memphis Pyramid was built in 1991 to attract a professional basketball team to the Memphis area. It
was used occasionally by the Memphis Grizzlies (NBA) and college teams until 2004, when it was largely
abandoned as a sports facility. As an arena, the Pyramid included 220,000 square feet and 20,142 seats,
built at a cost of $22 million ($175 million [2014$]). Construction to redevelop the facility began in 2012,
and a Bass Pro Superstore opened in December 2014 in addition to a hotel, restaurants, and parking.

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Maple Leaf Gardens, Toronto

Maple Leaf Gardens opened in 1931 with 16,382 seats built at a total cost of $1.5 million ($22.5 million
[2014$]). It was renovated in 2004 and in 2009. Named a National Historic Site of Canada in 2007, the
rink was redeveloped to include less seating on the main level to be shared between minor teams and
Ryerson University. The lower level was developed into a retail shopping center and underground
parking.
Houston Astrodome, Texas
The Houston Astrodome was opened in 1965 and was the world’s first multi-purpose domed sports
stadium. Renovated in 1988, the Astrodome sits on 9.5 acres and includes nearly 63,000 seats. The total
development cost was $35 million ($262,000,000 [2014$]). Original grass turf at the Astrodome was
replaced by an artificial turf, which was then dubbed “AstroTurf”. In the aftermath of Hurricane Katrina in
2005, the Astrodome was used as a refugee camp and the building was condemned for violation of fire
code in 2008. A referendum to renovate the stadium failed in 2013 and the current facility remains
partially demolished. Once fully removed, the site will be used for parking.

SPORTS FACILITY REUSE PROJECTS KEY FINDINGS
There are several lessons that can be learned from the arena reuse case studies:


Many no-longer functional arenas have been demolished, and those that have been repurposed
are primarily located outside the United States, in Canada and Europe.



Redeveloped uses include mixed-use developments with some entertainment functions.

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

The vast majority of arena redevelopment or reuse projects involve a mix of private real estate
(i.e. residential, retail, office) along with entertainment uses.

There are a number of challenges associated with reuse of arenas, including:


It is generally very costly to bring arenas to a suitable condition where they can be used for
alternatives use. This is typically the result of significant deferred maintenance, older buildings,
and scale and design issues.



Purpose-built facilities such as arenas are challenging and expensive to adapt for other uses.



Arenas are expensive to operate and maintain and require a mix of uses in addition to
entertainment for feasible economics, many of which may not be compatible with Seattle Center’s
mission and the goals for the KeyArena site. Many times, the cost to operate them offsets any
positive revenue that can be generated, which is why they are often torn down to allow for new,
mixed use entertainment projects.

EVALUATION OF ENTERTAINMENT AND ATTRACTION ALTERNATIVES
In order to identify attractions for further investigation, we first conducted a preliminary evaluation of a
large number of attraction types. Key assumptions in developing the list of attractions are as follows:


Redevelopment scenarios do not need to accommodate existing tenants.



Private real estate uses are only possible under certain conditions where they are tied to other
public, related uses, and not preferable.



The KeyArena structure is not on the historic register, but there is a strong preference not to
demolish it.



The KeyArena site footprint is 130,000 square feet, with 353,000 existing square feet (up to
645,000 square feet including total floor plate at each elevation). It is large enough to
accommodate the vast majority of attractions that we evaluated.

We used the following process to develop a short list of attractions for market evaluation. This process
included:


Develop broad list of attraction types.



Review according to high level evaluation criteria to assess consistency with Seattle Center goals
and suitability for the market.



Removed attractions that were determined to meet the evaluation criteria sufficiently but already
exist in the market.



For the remaining attraction types, review key attendance, operating, and market metrics.

The list of attractions developed for the preliminary evaluation and the usable space in KeyArena are
shown is shown in the figures below.

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Figure 39: Potential Attraction Concepts for Evaluation

Figure 40: Estimate of Available SF for KeyArena Reuse

Level
Event Level Subtotal
Lower Concourse
Main Concourse
Suite Level
Upper Concourse
Upper Mezzanine
Seating Bowl
Total Assignable SF
Source: AECOM

Existing SF
64,000
38,000
60,000
70,000
31,000
4,000
86,000
353,000

Usable Floor Plate
at Each Elevation
73,800
99,900
123,200
147,600
109,200
90,900

n/a
644,600

INITIAL SCREENING PROCESS
AECOM evaluated the potential attractiveness of each attraction concept for alignment with Seattle
Center and the City’s goals, using the following five categories and questions:


Consistent with Seattle Center purpose statement: to “[create] exceptional events, experiences
and environments that delight and inspire the human spirit to build stronger communities,”



Contribution to overall vitality of Seattle Center,

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

Appeal to both residents and tourists,



Public access, and



Financial viability.

We developed a scoring matrix for each criteria on a scale from 1 to 5, which 1 being the least compatible
and 5 being the most compatible.
Figure 41: Scoring for Initial Concepts

We then went through and evaluated each of the attraction types by these criteria and ranked them. After
the screening process, there were 11 attraction concepts that sufficiently met most criteria.

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Table 24: Results of Screening Process (1 of 2)
Consistent with
SC Purpose
Statement

Financial
Viability

Contribution to
Overall Vitality
of SC

Appeal to
Residents &
Tourists

Public Access

Initial Screening:
Combined Score

Use Type
Key Arena

Sub-Type

4

3

4

2

4

17

Adventure/Sports Park

Large Outdoor

5

4

5

5

4

23

Adventure/Sports Park

Indoor / Outdoor Complex

5

3

5

5

4

22

Amusement Park

Regional Theme Park

3

5

4

3

3

18

Amusement Park

Small/Medium

3

3

3

1

4

14

Aquarium/ Marine Life

Large Nonprofit
Small / Medium
Commerical
Marine Life Outdoor
Large

5

1

5

5

4

20

4

3

3

2

3

15

4
4

4
3

4
5

4
3

3
3

19
18

Small/Medium

3

2

4

3

3

15

Large Museums

5

1

5

5

4

20

Specialty Museums
/Cultural Centers

4

1

4

4

4

17

Performing Arts

5

1

4

2

4

16

Indoor Performance
/Circus Attractions

n/a

4

4

4

5

4

21

Driving Experience

Performance Cars

2

4

3

4

2

15

Driving Experience

Racing Go-karts

2

3

2

1

3

11

Family Entertainment
Center

Indoor/Outdoor

2

3

2

1

3

11

Garden Entertainment
Attraction

Indoor/Outdoor

5

2

5

5

4

21

Consistent with
SC Purpose
Statement

Financial
Viability

Contribution to
Overall Vitality
of SC

Appeal to
Residents &
Tourists

Public Access

Initial Screening:
Combined Score

Aquarium/ Marine Life
Aquarium/ Marine Life
Corporate Attractions
Corporate Attractions
Museums/ Cultural
Centers
Museums/ Cultural
Centers
Museums/ Cultural
Centers

Table 25: Results of Screening Process (2 of 2)

Use Type
Key Arena
Retail, Dining &
Entertainment (RDE)
Specialty Attractions
Specialty Attractions

Sub-Type

4

3

4

2

4

17

n/a

4

5

5

4

5

23

5
3

4
5

5
4

5
5

4
3

23
20

1

3

2

1

3

10

Tower/Wheel

Edutainment
IP-Based Attractions
Tourist-Oriented Indoor
Entertainment
Large

4

5

5

3

4

21

Waterpark

Outdoor

3

4

4

2

4

17

Waterpark

Indoor/Resort

3

4

5

4

4

20

Nonprofit Zoo

5

1

5

4

4

19

Large Commerical

3

5

4

5

2

19

Small/Medium

2

3

2

2

3

12

Large

5

3

5

5

5

23

n/a
n/a

5
4

3
2

3
4

3
2

3
5

17
17

n/a

1

2

1

1

1

6

Specialty Attractions

Zoo/Live Animal
Attractions
Zoo/Live Animal
Attractions
Zoo/Live Animal
Attractions
Eatertainment
Attraction/Destination
STEM / Maker Center
Education Use
Film Studio/ Sound
Stages

Of those, there were several that already exist in the local market or that would not fit within the KeyArena
facility and were removed. The uses that were left for market evaluation are shown in the figure below.

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Figure 42: Evaluation of Potential Attraction Concepts

High Scoring Attraction
Concepts

Removed for Local Market
Crossover or Scale

Attraction Concepts
Remaining for Market
Evaluation

Indoor Adventure or Sports Park

Large Outdoor Adventure Park

Indoor Adventure or Sports Park

Dinner Theater / Performance
Attraction

Large Aquarium

Dinner Theater / Performance
Attraction

Retail, Dining, & Entertainment
Specialty Indoor AttractionEdutainment
Specialty Indoor Attraction- IP
Based

Large Museum
Garden Entertainment Attraction

Retail, Dining, & Entertainment
Specialty Indoor AttractionEdutainment

Tower/Wheel
Indoor Waterpark

Specialty Indoor Attraction- IP
Based

Indoor Waterpark

STEM

STEM
Large Outdoor Adventure Park
Large Aquarium
Large Museum
Garden Entertainment Attraction
Tower/Wheel

PROFILES OF POTENTIAL USES
For the remaining attraction concepts remaining, AECOM developed attraction profiles, highlighting the
following information typical for each attraction type:


Attendance and pricing,



Resident-tourist mix,



Size and scale requirements,



Typical investment,



Surrounding uses,



Business model / financial characteristics, and



Examples in the United States and/or internationally.

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Indooor Adventure Sports Park
Definition


Relatively new attraction type
combining a number of concepts



Includes: surf, white water racing
course, rock-climbing, ice-climbing,
trampoline park, jet boat racing,
indoor ski attractions, zip lines,
Velodrome, recreational ice rink

Examples


National:, Kelly Slater Surf Experience
(pending), Vans Skate Park in
Huntington Beach, CA; Ray’s MTB
(Cleveland), LA Velodrome, Boulder
Indoor Cycling Center



International: Costa Rica Zip Line and
Canopy Tours (Various), Ski Dubai
(indoor)



General: Rock climbing, trampoline,
gyms, combination

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Indoor Dinner Performance Attraction
Definition


Themed dinner performance
facilities

Examples


Teatro ZinZanni (Seattle / San
Francisco))



Australian Outback Spectacular (Gold
Coast)



Pirate’s Dinner Adventure (FL and CA)



Cirque du Soleil



Immersive theater experiences

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Retail, Dining & Entertainment
Definition


Retail, dining & entertainment
centers have co-located shops,
restaurants, and other leisure
activities

Examples


Local/Regional: Pike’s Place Market



National: Gilley's Dallas, Pier 39, Navy
Pier, Seaport Village, Third Street
Promenade, Eataly, Ferry Building

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Edutainment Attraction
Definition


A themed indoor education focused
attraction



Examples include FlyOver Canada,
Sega Orbi, and National
Geographic /Smithsonian,
WonderWorks



Gates Foundation math experience



A unifying theme or idea creates a
unique environment in contrast to a
typical mall



Wide variety of scale & quality,
customer bases and nearby
activities

Examples: BBC / Sega Orbi
Overview / Definition


A Sega-BBC Earth joint venture that features BBC’s library of content to deliver technologically advanced,
nature related experiences



High tech experiences including 4D theatre, RFID tags, and experiential audio-visual presentations

Key Metrics


Developed by Sega using licensed BBC Earth content



Located in Yokohama, Japan



Opened in 2013



51,000 SF



Target audience is all ages



Estimated attendance is 1 million based on opening month
attendance

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Examples: FlyOver Canada
Overview / Definition


30-minute virtual flight ride experience (divided into three equal segments- ride is 10 minutes)
with film of Canada.



Off-season themed content potential



Based on Disney experience “Soarin’ Over California”.



Located at Canada Place pier in former Imax theater.

Key Metrics


Opened in June



Attendance unknown, likely under 500,000



Capacity constrained during peak time by film length and theater seats (currently 60 seats).



Visitors are evenly split between residents and tourists, but are expected to include more
tourists during stable year



Year round operation



Admission is $20



Requires approximately 10,000 square feet



Investment of $16 million in Vancouver



Prefer to be in entertainment zone, co-located with other entertainment destinations or
attraction

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IP-Based Attraction
Definition


An Intellectual Property (IP)-based
attraction or exhibit which
incorporates elements of existing
branded characters or concepts



Leveraging a known brand can be
advantageous



Risks include high initial expense
and potential expiration of rights

Examples


Angry Birds



Legoland Discovery Centers



Disney Quest

Legoland Discovery Center

Overview / Definition


Developed by Merlin Entertainments (UK)
with Lego intellectual property



Features interactive exhibits and rides in
indoor experience

Key Metrics


Locations in Atlanta, Boston, Chicago,
Dallas, Kansas City, Westchester (UK),
Toronto, berlin, Oberhausen (Germany),
Tokyo, Yokohama (Japan)



Development cost from $10-$20 million



30,000-45,000 SF



Target age group from 2 to 12 years



Attendance of approximately 400,000



Adult admission from $11 to $23



Revenues of $6 to $11 million



Typically located as a mall anchor

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STEM / Maker Center
Examples


Maker Marts/ Facilities/ Support Organizations



SFMADE, a non-profit organization and
public/private partnership to support San
Francisco’s manufacturing



Makers Market- online shopping destination for
emerging makers



Pop-up stores/fairs nationwide



Torpedo Factory, (VA)- residency programs,
retail, classes, and facilities



Incubators for Technology and Local
Manufacturing



Y Combinator (San Francisco)



National Robotics Training Center (South
Carolina)



Local examples:



Makerhaus-10,000 square feet of studio/shop
space featuring classes and membership
access



Makers’ Mercantile- craft retail, meeting space,
classrooms, and bakery



TechStars (four national locations including
Seattle)

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Potential Development Combinations
It may be possible to combine some of these attraction concepts with private real estate in order to
maximize financial viability. Examples generally include an entertainment anchor plus a supporting
commercial use and could include:


A nature or environment themed edutainment attraction plus specialty retail and themed dining;



Indoor adventure park plus a sports retailer, sports bar, and dining; and



A STEM /Maker center with technology oriented office space, dining, and specialty retail.

SUMMARY OF MARKET ANALYSIS FOR SCENARIO D
Major findings from AECOM’s market analysis for Scenario D include the following:


Available Markets – Seattle resident and tourist markets are large and high quality. The majority
of the resident market population is within a one-hour drive (i.e. the primary market), which is
favorable. Income and education levels for residents and tourists are very strong, and tourism has
experienced steady growth. The tourist market is comprised of primarily leisure tourists, including
a large number of people visiting friends and relatives. There is significant peaking of tourists in
the summer, which may result in larger than typical visitor areas for attractions to accommodate
seasonality patterns.



Existing Seattle Attractions – Seattle has a large number of visitor attractions, ranging from
major “must-see” attractions such as the Space Needle that draw over one million visitors
annually to many specialty museums that attract under 100,000 visitors per year. Overall,
attractions in Seattle perform very well, with strong attendance, resident, and tourist market
penetration rates. The pricing at Seattle attractions is particularly strong, with pricing at even midtier and specialty attractions relatively higher than other similar markets. Seattle has a broad
range of attractions as well, with most major product types represented. A review of aggregate
attractions attendance compared to market size compared to other cities indicates that Seattle is
generally well-supplied with respect to attractions. In order for a new attraction to perform well, it
would need to have a strong concept suitable for the market and be well-located.



Arena Reuse – We examined a number of arenas that are no longer used for sports or
entertainment. Most that are no longer used have been torn down and replaced with mixed-use
entertainment or commercial projects. A few facilities have been re-purposed with a mix of private
real estate uses and entertainment, but there are no examples of repurposed arena facilities that
have been repurposed without some type of market-rate real estate development. Generally
speaking, purpose-built facilities such as arenas do not work well for attractions, as the cost to
maintain and operate the facilities often cannot be supported by an attraction. While there is no
shortage of entertainment concepts, entertainment uses and attractions typically serve as
anchors for attracting visitors and their spending, and the value is capture through surrounding

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real estate uses. It is our understanding that such uses may be incompatible with current goals
for Seattle Center and the KeyArena facility. Furthermore, the cost to develop other uses within
arenas is often prohibitive due to deferred maintenance issue and building suitability challenges.


Potential Entertainment Concepts – There are a number of entertainment concepts that may
be suitable for the KeyArena site from a mission and high-level market perspective. We evaluated
a large number of attraction concepts for compatibility with the Seattle Center purpose, ability to
attraction residents and visitors and contribute to the overall vitality of Seattle Center, public
access, and financial viability. We eliminated attractions which are well-represented in the Seattle
market or would not fit in the KeyArena facility. Concepts which met these criteria included: an
indoor sports adventure park, a high tech edutainment attraction, an IP-based attraction, a STEM
or “maker” center, and a dinner theater attraction.



Summary – As described previously, the Seattle market is well supplied with attractions and
entertainment venues. While there could be potential for well-located attractions that are suitable
to the market, the challenge in locating within the existing KeyArena facility is likely to be financial
viability, which is explored further in upcoming sections.

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6. Physical Analysis
SCENARIO A – MAINTAIN KEYARENA
Scenario A assumes that KeyArena remains as a suitable entertainment venue for sporting events and
concerts, but that it would maintain the status quo of not having an NBA or NHL franchise as a primary
tenant. The two scenarios described earlier are as follows:

SCENARIO A1 – SODO ARENA IS BUILT
“In a configuration that is suitable for its current basketball tenants and comparable sporting events as
well as for concerts, family shows, and other events suited to the “full bowl” layout. This scenario
assumes that the SoDo arena is built and that KeyArena would serve as a “secondary” arena in the
market.”
In this scenario we would recommend that an interior renovation is undertaken to upgrade the amenities
and finishes within KeyArena but that no major reconfigurations of spaces or seating bowl modifications
are made to the arena. Given that it would remain as the “secondary” large indoor venue in the city, the
finishes and amenities in the facility should be of a high quality but with note taken that they are being
installed in a venue that is not the primary indoor entertainment venue in the city.

SCENARIO A2 – SODO ARENA IS NOT BUILT
“Similar to scenario A1, but assume that the SoDo arena is not built in the next decade and that
KeyArena remains as the city’s “primary” large arena venue. This also assumes that any improvements to
KeyArena will not bring it up to NBA or NHL standards.”
In this scenario, we would recommend similarly to A1 that an interior renovation is undertaken to upgrade
the amenities and finishes within KeyArena to a level that is indicative of the “primary” large arena venue
in the city. Additionally, the modifications – while not structural or bowl-modifying – would need to include
fan experience and revenue-generating spaces such as an integrated restaurant, sports bar, and
potentially retail space. These are all expectations of the future arena, and are non-existent currently.

SCENARIO B – WITH MAJOR PROFESSIONAL TENANT; NO NEW ARENA IN SEATTLE
“Scenario B assumes that no new arena is built in the city for a major professional sports tenant(s) in the
next decade, and that KeyArena is renovated in such a way that it would be able to host a major
professional sports tenant(s).”

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The underlying assumption, at least initially, was that this may not be feasible. Upon further investigation,
and a new generation of NBA/NHL facilities that are being designed and constructed currently, the special
requirements and seating capacities necessary to sustain these franchises have come down in size. Until
recent years, and as outlined in the previous study of KeyArena for the NBA, the assumed square footage
necessary for an NBA-style arena was well into the 800,000-square foot range. This would have required
major additions and modifications to KeyArena, under which the costs outweighed the benefits, and a
new arena made sense financially. Recent NBA/NHL venues such as the one in Sacramento, currently
under design, have gotten the square footage for arena-based activities into the high 600,000-square foot
range. This is a much more attainable solution for KeyArena with minor additions to the facility. The one
caveat to this is that while KeyArena’s current seating bowl is acceptable to NBA standards with minor
modifications and premium amenity alterations, the current seating bowl has never been NHL-ready.
Based on the assumption that an NHL franchise is more likely to be relocated or acquired to play in
Seattle in the next decade than an NBA team, we outlined the parameters for the facility redesign based
upon an acceptable NHL configuration, which could be modified into an NBA arena fairly easily. The
diagrams that follow outline two new possible seating bowl reconfigurations that occur within the existing
footprint and roof structure of KeyArena. We have outlined the available square footage on each level
based upon the bowl reconfiguration and based upon the available square footage on each floor plate of
the arena. Modifications to the annex building on the south side will be necessary to accommodate nongameday functions of the arena such as storage, operations, maintenance, and food service prep and
storage. Through a reconfiguration of this annex, connections can be made at all levels to the arena.

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SCENARIO B – OPTION 1: EVENT LEVEL
Seating Bowl - 33,349 sf (includes ice/floor)
Remaining GSF on Event Level - 41,100
Includes: Press, Home Team, Visiting Team, Aux
Locker Rooms, Officials, Relative's Lounge, event
level club (courtside club) and Owner's Lounge
Auxiliary Building (40,000 sq ft on two levels) would
house: Event Personnel & Staff, Maintenance Shops
& Janitor Facilities, Storage, Main Kitchen, and
Commissary
Building to be connected to the building at Event and
Mezzanine Levels and will also include replacement
of the 2 existing floors at Premium Levels and Upper
concourse.

SCENARIO B – OPTION 1: MEZZANINE LEVEL
Seating Bowl is 52,542 sq ft of space (some
duplicated from below retractable seats and includes
ice/floor area
Remaining usable square footage is 45,638 sq ft
The elements that will be located on this level
include: Concourse, Public Restrooms, VIP Entrance
Lobby, Employee Check-in, Security Check-in,
Police, Fire Command, Retail, Mechanical, Electrical,
and concessions.
Additionally there will be a mezzanine level club at
this level as well to service seats located within the
lower bowl who have food & beverage options.

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SCENARIO B – OPTION 1: MAIN CONCOURSE
The seating bowl and ice/floor account for 70,511
square feet of floor plate
There is 53,307 square feet left to allocate to the
main concourse services. These will be comprised of
concourses, public restrooms, main team store, and
auxiliary team store, guest services, day of event
future sales, first aid, 2 restaurants (accessible from
outside and inside the arena), a stand-alone bar (only
accessible on event days), and concessions for the
general patrons.
There will need to be a portion of the restaurants that
extend outside of the perimeter of the arena's edges
currently. Approximately 12,000 square feet of new
space will be needed for an extension of the
concourses and the inclusion of these restaurants.

SCENARIO B – OPTION 1: PREMIUM LEVEL
The usable footprint of this level is 59,096 square
feet.
12,519 square feet of this is used for the premium
loge box seating or the writing press (if necessary)
20,150 square feet of this is necessary for the suites
and entertainment area associated with them.

The remaining space is utilized for circulation and
potential openings to the lower levels of mechanical
spaces to service the upper concourse level.

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SCENARIO B – OPTION 1: UPPER CONCOURSE
The upper concourse usable floor plate is 70,868
square feet
The seating bowl takes up approximately 14,496
square feet of this, leaving the remaining 56,372
square feet to be comprised of loge box
entertainment spaces, general concourses,
restrooms, concessions, first aid, lost & found/guest
services, and retail. Additional space for mechanical
distribution rooms has been allocated on the floor as
well.

SCENARIO B – OPTION 1: UPPER BOWL

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SCENARIO B – OPTION 1: SEATING DIAGRAM - HOCKEY
The seat counts for this option are as follows:
9,025 19" lower bowl seats (some of which may be
allocated to club seats served from the mezzanine
level club
114 lower bowl ADA & companion positions
560 suite seats (20 per suite @ 28 suites)
552 loge box seats (configured in groups of 4 or 6)
6600 19" upper bowl seats
88 upper bowl ADA & companion positions
Total Seating Capacity for Hockey of 16,939 seats

SCENARIO B – OPTION 1: SEATING DIAGRAM - BASKETBALL
The seat counts for this option are as follows:
10,413 19" lower bowl seats (some of which may be
allocated to club seats served from the mezzanine
level club
126 lower bowl ADA & companion positions
560 suite seats (20 per suite @ 28 suites)
552 loge box seats (configured in groups of 4 or 6)
6600 19" upper bowl seats
88 upper bowl ADA & companion positions
Total Seating Capacity for Basketball of 18,339 seats

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SCENARIO B – OPTION 1: LONGITUDINAL SECTION

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SCENARIO B – OPTION 1: TRANVERSAL SECTION

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SCENARIO B – OPTION 2: EVENT LEVEL
Seating Bowl - 33,349 sf (includes ice/floor)
Remaining GSF on Event Level - 41,100
Includes: Press, Home Team, Visiting Team, Aux
Locker Rooms, Officials, Relative's Lounge, event
level club (courtside club) and Owner's Lounge
Auxiliary Building (40,000 sq ft on two levels) would
house: Event Personnel & Staff, maintenance Shops
& Janitor Facilities, Storage, Main Kitchen, and
Commisary
Building to be connected to the building at Event and
Mezzanine Levels and will also include replacement
of the 2 existing floors at Premium Levels and Upper
concourse.

SCENARIO B – OPTION 2: MEZZANINE LEVEL
Seating Bowl is 52,542 sq ft of space (some
duplicated from below retractable seats and includes
ice/floor area
Remaining usable square footage is 45,638 sq ft
The elements that will be located on this level
include: Concourse, Public Restrooms, VIP Entrance
Lobby, Employee Check-in, Security Check-in,
Police, Fire Command, Retail, Mechanical, Electrical,
and concessions. Additionally there will be a
mezzanine level club at this level as well to service
seats located within the lower bowl who have food &
beverage options.

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SCENARIO B – OPTION 2: MAIN CONCOURSE
The seating bowl and ice/floor account for 70,511
square feet of floor plate
There is 53,307 square feet left to allocate to the
main concourse services.
These will be comprised of:concourses, public
restrooms, main team store, and auxiliary team store,
guest services, day of event future sales, first aid, 2
restaurants (accessible from outside and inside the
arena), a stand-alone bar (only accessible on event
days), and concessions for the general patrons.
There will need to be a portion of the restaurants that
extend outside of the perimeter of the arena's edges
currently. Approximately 12,000 square feet of new
space will be needed for an extension of the
concourses and the inclusion of these restaurants.

SCENARIO B – OPTION 2: PREMIUM LEVEL
The usable footprint of this level is 59,096 square
feet.
15,327 square feet of this is used for the premium
loge box seating or the writing press (if necessary)
25,090 square feet of this is necessary for the suites
and entertainment area associated with them.
The remaining space is utilized for circulation and
potential openings to the lower levels of mechanical
spaces to service the upper concourse level.
There is the potential that some expansion to the
arena occurs at this level on the north and south of
the building behind the club seats. There exists a
need for entertainment space for the loge lounge
seats on the upper concourse level in this location as
well. The potential space is approximately 3,500
square feet on either side for a total of 7,000 square
feet on this level and an additional 3-4,000 square
feet above on the upper concourse level. This would
additionally provide covered entrances to the arena
for both of these entrances.

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SCENARIO B – OPTION 2: UPPER CONCOURSE
The upper concourse usable floor plate is 70,868
square feet
the seating bowl takes up approximately 14,496
square feet of this, leaving the remaining 56,372
square feet to be comprised of loge box
entertainment spaces, general concourses,
restrooms, concessions, first aid, lost & found/guest
services, and retail. Additional space for mechanical
distribution rooms has been allocated on the floor as
well.
There is the potential that some expansion to the
arena occurs at this level on the north and south of
the building behind the club seats. There exists a
need for entertainment space for the loge lounge
seats on the upper concourse level in this location.
The potential space is approximately 3,500 square
feet on either side for a total of 7,000 square feet on
the level below and an additional 3-4,000 square feet
above on this level. This would additionally provide
covered entrances to the arena for both of these
entrances.

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SCENARIO B – OPTION 2: UPPER BOWL

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SCENARIO B – OPTION 2: SEATING DIAGRAM HOCKEY
The seat counts for this option are as follows:
9,207 19" lower bowl seats (some of which may be
allocated to club seats served from the mezzanine
level club
116 lower bowl ADA & companion positions
720 suite seats (20 per suite @ 28 suites)
160 loge box seats (configured in groups of 4 or 6)
696 24" club seats
5010 19" upper bowl seats inclusive of 36 upper bowl
ADA & companion positions
Total Seating Capacity for Hockey of 15,909 seats

SCENARIO B – OPTION 2: SEATING DIAGRAM BASKETBALL
The seat counts for this option are as follows:
10,413 19" lower bowl seats (some of which may be
allocated to club seats served from the mezzanine
level club
128 lower bowl ADA & companion positions
720 suite seats (20 per suite @ 28 suites)
160 loge box seats (configured in groups of 4 or 6)
696 24" club seats
5010 19" upper bowl seats inclusive of 36 upper bowl
ADA & companion positions
Total Seating Capacity for Basketball of 17,127 seats

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SCENARIO B – OPTION 2: LONGITUDINAL SECTION

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SCENARIO B – OPTION 2: TRANSVERSAL SECTION

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SCENARIO C – REPURPOSE AS AN ENTERTAINMENT VENUE
“Scenario C would repurpose KeyArena in a manner that maintains the facility as an entertainment venue
but not one that would necessarily serve the WNBA, college basketball, or other current tenants requiring
a ‘full bowl’ configuration.”
The concept developed here entails utilizing the current seating bowl and premium offerings as much as
possible, but in the simplistic description “splitting” the arena into two venues. This would offer the
opportunity for numerous additional events than the facility currently handles, but also as two new venue
sizes. The diagrams depicted on the following pages reflect venues of approximately 12,000 seats and
3,000 seats. Both venues would be comprised of permanent seats, premium suite offerings and standing
room or floor seats. While the intent of this scenario is to downsize the “arena” portion of the facility, this
configuration still allows for use by smaller sports and entertainment events that require a typical arena
floor size and associated amenities.
The modifications to the facility would entail creating a dividing wall/backstage system that would
acoustically separate the two venues so that simultaneous events could occur. As depicted in the section,
we envision the smaller venue’s stage actually occurring at the elevation of the existing Main Concourse
level with a service/load-in/load-out space being located underneath accessible via the current truck
ramp. This space would service the large venue at the same elevation, but the smaller venue via service
elevators to the event floor elevation at the Main Concourse.
The modifications to the seating bowl are absolutely feasible, but require a surgical demolition in order to
maintain the sections that we envision remaining. There will be a premium to these modifications, as well
as a secondary mechanical system isolated from the larger venue to control the smaller venue. While
there are these costs in addition to the acoustical wall, and the new floor slab, the remainder of the facility
in essence remains as is, or is renovated along the lines of either A1 or A2 from a finishes standpoint.

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SCENARIO C – SPLIT VENUE: MAIN CONCOURSE / LOWER BOWL

SCENARIO C – SPLIT VENUE: PREMIUM LEVEL

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SCENARIO C – SPLIT VENUE: UPPER BOWL

Seating Capacities:
Larger Venue - 60' x 30' stage 5' off of the floor
(event level)
35 Suites - 700 seats
978 standing room floor seats
Bowl Seats - 10,200
Total Venue = 11,878 seats
Smaller Venue - 25' x 60' stage 5' off of the floor
(main concourse level)
13 Suites - 260 seats
1,032 standing Room Floor Seats
Upper Bowl Seats - 19” Chairs 1,613
Total Venue = 2,905 seats

SCENARIO C – SPLIT VENUE: LONGITUDINAL SECTION

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SCENARIO D – OTHER USER GROUPS
“Scenario D does not accommodate any of the existing tenants of KeyArena, but instead evaluates the
other options for the reuse of KeyArena. This scenario explores other approaches to repurposing the
KeyArena site that would be financially feasible for the City, draw visitors to the Seattle Center, and offer
consistency with Seattle Center’s purpose statement, which is to ‘create exceptional events, experiences,
and environments that delight and inspire the human spirit to build stronger communities.’ The options
described in the report vary greatly in size and spatial/technical requirements and thus an exercise in
special availability was undertaken rather than specific designs for each opportunity.”
The facility is 360’ x 360’ in a perfect square and the floor plates are rather well-defined. If we were to
vacate the seating bowl in the facility and fill in the floor plates for usable space we are left with the
following available space on each level:
•

Event Level – 74,000 square feet

•

Mezzanine Level – 98,000 square feet

•

Main Concourse – 123,000 square feet

•

Premium Level – 123,000 square feet

•

Upper Concourse – minimal built square footage as we would expect this level to be primary
mechanical, electrical and service, although if the right tenant needed it space could be
accommodated at this level.

The following page shows various configurations of the site’s footprint for various potential uses, including
as a parking garage and multiple ways to subdivide the footprint for multiple users.

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SCENARIO D – OTHER USER GROUPS: PARKING GARAGE

SCENARIO D – OTHER USER GROUPS: FLOOR PLAN LAYOUT OPTIONS

ESTIMATED COSTS
The following table summarizes estimated costs for each scenario. We also estimate demolition costs for
the existing facility. These estimates consider local cost factors.

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Table 26: Estimated Project Costs ($000s)
Scenario A1 Scenario A2
Recommended Construction Budget

$

Soft Costs - 25%
Recommended Project Budget

80,398

$

20,099
$

100,497

120,006

Scenario
B1/B2
$

30,001
$

150,007

228,006

Scenario C

Scenario D

Demolition

$

$

$

57,002
$

285,008

119,817
29,954

$

149,771

80,945
20,236

$

101,181

5,393
1,348

$

6,742

Source: AECOM

As the table shows, estimated costs for the Scenario A options are approximately $100 million to $150
million, and Scenario B costs are $285 million. Costs for Scenario C and D are approximately $150 million
and $101 million, respectively. In addition, for any scenarios that could require a demolition of the arena,
associated costs are estimated to be $6.7 million.

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7. Financial Analysis
In this section, we present the results of our forecasts of facility operations under the various scenarios.
This includes projections of annual usage and all relevant operating revenues and expenses, based on
the facility assumptions summarized in the previous section.
As previously described, the scenarios are:
•

Scenario A1: a new SoDo area is built and Key becomes the secondary large arena
in Seattle, and is improved from current conditions.

•

Scenario A2: Key remains as Seattle’s primary large arena (a new SoDo arena is
not built), but any improvements will not allow it to host NBA or NHL tenants.

•

Scenario B1: Key is renovated in such a way that it can accommodate NBA or NHL

Sports/

tenants, and remains as Seattle’s primary large arena. In Scenario B1, we assume

entertainment

that the arena’s only major professional tenant is an NHL franchise.
•

Scenario B2: is similar to B1, with the addition of an NBA tenant.

•

Scenario C: Key is renovated in such a way that it remains as an entertainment
venue but not one that would serve its “full-bowl” tenants. This assumes that the
SoDo arena is built.

•

Repurposed

Scenario D: Key is repurposed as a non-sports/entertainment venue but continues to

scenario

fulfill Seattle Center’s purpose statement.
Because Scenarios A through C generally involve KeyArena remaining as some sort of sports and
entertainment venue, projections for these scenarios are shown together. Following these projections, we
show the results of our Scenario D projections.

SCENARIOS A THROUGH C – SPORTS/ENTERTAINMENT OPTIONS
The following subsection shows side-by-side the results of our forecasts for the four sports/ entertainment
renovation scenarios for KeyArena and their underlying assumptions, and highlights major differences
between the scenarios. (All scenarios further assume that no other large arena for professional sports is
built in the Seattle market.)

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Events and Attendance, and Differences between Scenarios
The following tables summarize the forecasted event and attendance demand for KeyArena under the
four sports/entertainment scenarios. Regarding Key’s current and potential future tenants, we make the
following assumptions:
•

Major Professional Sports: we assume that an NHL team would be the only major professional
tenant in Scenario B1; in Scenario B2, we assume both NHL and NBA tenants.

•

Storm: would remain a tenant in Scenarios A2 and B only. In Scenario A1 – with a new NBA
arena in Seattle – we assume that the Storm would play in the new facility, primarily to maximize
connections with the NBA franchise. It is physically possible for the Storm to play in the arena
under Scenario C; however, we assume they do not.

•

Rollergirls: would remain a tenant in Scenarios A1 and A2 only. Should Key be reconfigured into
an NHL-quality arena, we assume that the Rollergirls would likely relocate to a smaller, less
expensive venue.

•

Seattle University: would remain a tenant in Scenarios A2, B, and C. If a new NBA arena is built
in SoDo, we assume that the university would prefer to play there rather than the city’s secondary
arena, as it would provide a strong recruiting advantage. (However, the university has plans to
build an on-campus arena in the future and could potentially vacate Key within the ten-year
projection period.) Similar to the Storm, SU could potentially play

In general, under Scenario A1, the arena would likely lose many events that it currently hosts to the new
NBA arena. Scenario A2 is most similar to Key’s current position as Seattle’s primary large indoor arena,
but improvements would allow it to host slightly more events than it has in recent years. In Scenarios B1
and B2, the addition of an NHL and NBA franchises and their schedule would increase overall usage of
Key, but would likely hurt event demand in other categories due to the decreased availability of prime
dates throughout much of the year, including the indoor concert season. In Scenario C, we assume that
the two venues within the arena would host a range of events that are generally smaller than full-arena
events.
Major differences in event levels are primarily due to the assumed presence of the SoDo arena in
Scenarios A1 and C (which would decrease Key’s usage) and the presence of an NHL team in Scenario
B (which would increase Key’s overall usage).

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Table 27: Projected Annual Events, Scenarios A-C

NBA
NHL
Storm
Rollergirls
Seattle University
Concerts
Family Shows
Other Entertainment
Other Sports
Graduations
Other - Private
Other - Major/Public
Total

Scenario
A1

Scenario
A2

Scenario
B1

Scenario
B2

Scenario C

0
0
0
8
0
8
2
6
6
6
4
4

0
0
18
8
16
22
4
10
10
8
4
8

0
45
18
0
16
18
4
8
10
6
4
6

45
45
18
0
16
15
2
4
6
2
2
2

0
0
0
0
16
20
4
10
8
8
10
4

44

108

135

157

80

Source: AECOM

Table 28: Projected Average Paid Attendance, Scenarios A-C

NBA
NHL
Storm
Rollergirls
Seattle University
Concerts
Family Shows
Other Entertainment
Other Sports
Graduations
Other - Private
Other - Major/Public

Scenario
A1

Scenario
A2

Scenario
B1

Scenario
B2

Scenario C

0
0
0
2,800
0
5,000
3,000
3,000
4,000
4,500
300
6,000

0
0
4,000
2,800
1,500
11,000
3,500
4,750
6,000
4,500
300
6,000

0
15,000
4,000
0
1,500
11,000
3,500
4,750
6,000
8,000
300
6,000

16,000
15,000
4,000
0
1,500
11,000
3,500
4,750
6,000
12,000
300
6,000

0
0
0
0
1,500
3,000
2,500
3,000
5,000
8,000
1,000
6,000

Source: AECOM

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Table 29: Projected Total Paid Attendance, Scenarios A-C
Scenario
A1

Scenario
A2

Scenario
B1

Scenario
B2

Scenario C

NBA
NHL
Storm
Rollergirls
Seattle University
Concerts
Family Shows
Other Entertainment
Other Sports
Graduations
Other - Private
Other - Major/Public

0
0
0
22,400
0
40,000
6,000
18,000
24,000
27,000
1,200
24,000

0
0
72,000
22,400
24,000
242,000
14,000
47,500
60,000
36,000
1,200
48,000

0
675,000
72,000
0
24,000
198,000
14,000
38,000
60,000
48,000
1,200
36,000

720,000
675,000
72,000
0
24,000
165,000
7,000
19,000
36,000
24,000
600
12,000

0
0
0
0
24,000
60,000
10,000
30,000
40,000
64,000
10,000
24,000

Total

162,600

567,100

1,166,200

1,754,600

262,000

Source: AECOM

The attendance figures above show paid attendance, and actual (turnstile) attendance will potentially
differ; turnstile attendee will generate in-arena revenues such as concessions. The table below shows the
assumed ratio of turnstile to paid attendance, based on the characteristics of past KeyArena events and
events at other similar facilities. These assumptions apply to all scenarios.
Table 30: Turnstile to Paid Attendance, Scenarios A-C

NBA
NHL
Storm
Rollergirls
Seattle University
Concerts
Family Shows
Other Entertainment
Other Sports
Graduations
Other - Private
Other - Major/Public

GA

Premium

95.0%
95.0%
100.0%
110.0%
100.0%
105.0%
105.0%
110.0%
110.0%
100.0%
100.0%
100.0%

75.0%
75.0%
75.0%
75.0%
75.0%
90.0%
90.0%
90.0%
90.0%

Source: AECOM

Financial Projections and Associated Assumptions
The following text describes the individual line items that relate to KeyArena’s operations and other
assumptions regarding the future scenarios. We then show financial proforma statements for each
scenario, based on the assumptions shown in this section.

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Revenue and Expense Line Items
Operating Revenues
Rent

Arena rent revenues are generated in various ways. For its current tenants and non-ticketed events, a
fixed amount is generally charged per event. For ticketed non-tenant events, rent is typically generated
from a facility usage fee ($2 per ticket for tickets less than $25; $4 per ticket for other tickets) and other
charges. Rent can also be affected by other terms with event promoters, such as rebates that are paid by
the facility, and these vary on an event-by-event basis and can potentially cause net rent paid to the
arena to be negative.
In addition to the actual rental fees and the facility usage fee, the rent revenue recognized by the arena is
also reduced by a revenue-sharing arrangement with AEG. In general, AEG receives 40 percent of net
arena revenues (not including Storm or SU games) above a benchmark, which is currently approximately
$2.1 million.
The three tables below show our assumptions for average general admission ticket prices (premium ticket
sales are considered separately), rental rates and types, and facility surcharges by event type. Per-ticket
facility surcharges are shown in gross amounts, and the arena retains net revenue after paying
associated sales taxes.
Table 31: Average General Admission Ticket Prices, Scenarios A-C
Avg. Ticket Price
Scenario
A1
NBA
NHL
Storm
Rollergirls
Seattle University
Concerts
Family Shows
Other Entertainment
Other Sports
Graduations
Other - Private
Other - Major/Public

$20.00
$15.75
$15.75
$40.00
$25.00
$20.00
$45.00

Scenario
A2

Scenario
B1

Scenario
B2

Scenario
C

$20.00
$15.75
$15.75
$70.00
$25.00
$25.00
$65.00

$60.00
$20.00
$15.75
$15.75
$70.00
$25.00
$25.00
$65.00

$55.00
$60.00
$20.00
$15.75
$15.75
$70.00
$25.00
$25.00
$65.00

$15.75
$50.00
$25.00
$25.00
$25.00

Source: AECOM

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Table 32: Assumed Rents, Scenarios A-C

Scenario A1
% of
Flat Rate
Ticket
Sales
NBA*
NHL*
Storm
Rollergirls
Seattle University
Concerts
Family Shows
Other Entertainment
Other Sports
Graduations
Other - Private
Other - Major/Public

$6,000
$8,500
$19,500
----$8,500
$25,000
$25,000

----3%
5%
5%
5%
----

Scenario A2
% of
Flat Rate
Ticket
Sales

$6,000
$8,500
$19,500
----$8,500
$25,000
$25,000

----3%
5%
5%
5%
----

Rent
Scenario B1
% of
Flat Rate
Ticket
Sales
$3,000,000
$7,500
$9,000
$21,000
----$8,500
$25,000
$25,000

-----3%
5%
5%
5%
----

Scenario B2
% of
Flat Rate
Ticket
Sales
$4,000,000
$3,000,000
$7,500
$9,000
$21,000
----$8,500
$25,000
$25,000

------3%
5%
5%
5%
----

Scenario C
% of
Flat Rate
Ticket
Sales

$15,000
----$7,000
$22,500
$22,500

--3%
5%
5%
5%
----

*Rent is per year, not per event.
Source: AECOM

Table 33: Facility Surcharge, Scenarios A-C

Scenario A1
Gross
Fee/
Ticket
NBA
NHL
Storm
Rollergirls
Seattle University
Concerts
Family Shows
Other Entertainment
Other Sports
Graduations
Other - Private
Other - Major/Public

$0.00
$2.00
$2.00
$4.00
$2.00
$2.00
$4.00

% to
Arena

0.0%
90.5%
90.5%
90.5%
90.5%
90.5%
90.5%

Scenario A2
Gross
Fee/
Ticket

$0.00
$2.00
$2.00
$4.00
$2.00
$2.00
$4.00

Facility Surcharge
Scenario B1

Scenario B2

% to
Arena

Gross Fee/
Ticket

% to
Arena

Gross Fee/
Ticket

% to
Arena

0.0%
90.5%
90.5%
90.5%
90.5%
90.5%
90.5%

$4.00
$0.00
$2.00
$2.00
$4.00
$2.00
$2.00
$4.00

45.3%
0.0%
90.5%
90.5%
90.5%
90.5%
90.5%
90.5%

$4.00
$4.00
$0.00
$2.00
$2.00
$4.00
$2.00
$2.00
$4.00

45.3%
45.3%
0.0%
90.5%
90.5%
90.5%
90.5%
90.5%
90.5%

Scenario C
Gross
Fee/
Ticket

% to
Arena

$2.00
$4.00
$2.00
$2.00
$4.00

90.5%
90.5%
90.5%
90.5%
90.5%

Source: AECOM

Reimbursements

Many of the arena’s expenses associated with an event are passed along to promoters and reimbursed to
the arena. Reimbursement of arena expenses from events has consistently averaged 63 percent of total
event expenses in recent years. In the future, we assume reimbursement revenue to continue to be 63
percent of event expenses.
Ticketing

KeyArena shares revenue with Ticketmaster from various charges associated with different types of ticket
orders. The level of charges is affected by ticket prices, and the arena receives charges over a certain
benchmark. The arena’s future assumed share of revenues are shown below as a percent of ticket sales,
and are based largely on historical revenues collected by Key. (Because the Storm and SU oversee their

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own ticketing, the arena does not share in revenues associated with their ticket sales. In addition, we
assume that any future NHL or NBA tenant would also retain all revenues from ticketing fees from their
events.)
Table 34: Ticketing Fees, Scenario A-C

Scenario
A1
NBA
NHL
Storm
Rollergirls
Seattle University
Concerts
Family Shows
Other Entertainment
Other Sports
Graduations
Other - Private
Other - Major/Public

Scenario
A2

Scenario
B1

Scenario
Scenario C
B2

0%

0%
0%

5%

5%

5%

5%

5%

11%
11%
11%
8%

11%
11%
11%
8%

11%
11%
11%
8%

11%
11%
11%
8%

11%
11%
11%
8%

Source: AECOM

Concessions

The arena currently receives a commission on gross sales from its food and beverage (F&B) contractor;
this sharing, and a relationship with a third-party concessionaire, is assumed in the future. The arena
typically retains its net share of F&B revenues. However, the Storm keeps the F&B revenues from its
games, and we assume an NHL and NBA franchise would also retain the revenues from its F&B sales.
The arena is assumed to retain the F&B revenues from other tenant events, as it currently does.
The two following tables show our assumptions of per-capita attendee spending for both concessions and
catering (concessions sales are generated by attendees at concession stands; catering sales are
generated by suite attendees only).

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Table 35: Per-Capita Concessions Spending, Scenarios A-C
Concessions
Scenario A1
Gross Per
Cap
NBA
NHL
Storm
Rollergirls
Seattle University
Concerts
Family Shows
Other Entertainment
Other Sports
Graduations
Other - Private
Other - Major/Public

$6.50
$11.00
$5.50
$10.00
$3.00
$6.00
$11.00
$0.50
$5.00
$2.50

% to
Arena

0.0%
30.0%
30.0%
30.0%
30.0%
30.0%
30.0%
30.0%
30.0%
30.0%

Scenario B1

Scenario A2
Gross Per
Cap

$6.50
$11.00
$5.50
$10.00
$3.00
$6.00
$11.00
$0.50
$5.00
$10.00

Scenario B2

Scenario C

% to
Arena

Gross Per
Cap

% to
Arena

Gross Per
Cap

% to
Arena

Gross Per
Cap

% to
Arena

0.0%
30.0%
30.0%
30.0%
30.0%
30.0%
30.0%
30.0%
30.0%
30.0%

$12.00
$6.50
$11.00
$5.50
$10.00
$3.00
$6.00
$11.00
$0.50
$5.00
$10.00

0.0%
0.0%
30.0%
30.0%
30.0%
30.0%
30.0%
30.0%
30.0%
30.0%
30.0%

$12.00
$12.00
$6.50
$11.00
$5.50
$10.00
$3.00
$6.00
$11.00
$0.50
$5.00
$10.00

0.0%
0.0%
0.0%
30.0%
30.0%
30.0%
30.0%
30.0%
30.0%
30.0%
30.0%
30.0%

$10.00
$3.00
$6.00
$11.00
$0.50
$5.00
$10.00

30.0%
30.0%
30.0%
30.0%
30.0%
30.0%
30.0%

Source: AECOM

Table 36: Per-Capita Catering Spending, Scenarios A-C
Catering
Scenario A1
Gross Per
Cap
NBA
NHL
Storm
Rollergirls
Seattle University
Concerts
Family Shows
Other Entertainment
Other Sports
Graduations
Other - Private
Other - Major/Public

$12.00
$15.00
$12.00
$20.00
$10.00
$0.00
$20.00

% to
Arena

0.0%
30.0%
30.0%
30.0%
30.0%
30.0%
30.0%

Scenario A2
Gross Per
Cap

$12.00
$15.00
$12.00
$20.00
$10.00
$0.00
$20.00

Scenario B1

Scenario B2

Scenario C

% to
Arena

Gross Per
Cap

% to
Arena

Gross Per
Cap

% to
Arena

Gross Per
Cap

% to
Arena

0.0%
30.0%
30.0%
30.0%
30.0%
30.0%
30.0%

$30.00
$12.00
$15.00
$12.00
$20.00
$10.00
$0.00
$20.00

0.0%
0.0%
30.0%
30.0%
30.0%
30.0%
30.0%
30.0%

$30.00
$30.00
$12.00
$15.00
$12.00
$20.00
$10.00
$0.00
$20.00

0.0%
0.0%
0.0%
30.0%
30.0%
30.0%
30.0%
30.0%
30.0%

$20.00
$10.00
$0.00
$20.00

30.0%
30.0%
30.0%
30.0%

Source: AECOM

Programs and Novelties

From some events, the arena will share in sales of merchandise and novelties. However, as is currently
the case, all current and future sports tenants will retain all revenue from their merchandise sales, with
the exception of the Rollergirls, who “buy out” their merchandise sales by paying the arena $500 per bout.
While some other events currently buy out their merchandise in return for all revenues, most share
revenues with the arena; this is a standard arrangement and is assumed to continue in the future
scenarios. Key typically receives 20 percent of gross merchandise sales and ten percent of sales of
media (such as CDs and DVDs, which comprise a very small share of overall merchandise sales), and
then evenly splits this share with its concessionaire. As a result, we assume that the arena retains nine
percent of gross sales from non-tenant sports and entertainment events.
Per-attendee sales and sharing percentages are shown below.

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Table 37: Per-Capita Program/Novelty Spending, Scenarios A-C
Merchandise
Scenario A1
Gross Per
Cap
NBA
NHL
Storm
Rollergirls
Seattle University
Concerts
Family Shows
Other Entertainment
Other Sports
Graduations
Other - Private
Other - Major/Public

% to
Arena

$1.50
0.0%
$500/bout
$1.50
0.0%
$8.00
9.0%
$1.00
9.0%
$6.00
9.0%
$5.00
9.0%

Scenario A2
Gross Per
Cap

% to
Arena

$1.50
0.0%
$500/bout
$1.50
0.0%
$8.00
9.0%
$1.00
9.0%
$6.00
9.0%
$5.00
9.0%

Scenario B1
Gross Per
Cap

% to
Arena

$4.00
0.0%
$1.50
0.0%
$500/bout
$1.50
0.0%
$8.00
9.0%
$1.00
9.0%
$6.00
9.0%
$5.00
9.0%

Scenario B2
Gross Per
Cap

% to
Arena

$4.00
0.0%
$4.00
0.0%
$1.50
0.0%
$500/bout
$1.50
0.0%
$8.00
9.0%
$1.00
9.0%
$6.00
9.0%
$5.00
9.0%

Scenario C
Gross Per
Cap

% to
Arena

$1.50
$8.00
$1.00
$6.00
$5.00

0.0%
9.0%
9.0%
9.0%
9.0%

Source: AECOM

Naming Rights

While the arena’s naming-rights contract with KeyBank expired at the end of 2010, the facility continues
to be known as KeyArena. Prior to the Sonics’ leaving in 2008, KeyBank paid $1.3 million per year, and
then $300,000 per year through 2010.
In the future, we assume a new naming-rights contract for the arena. According to interviews with facility
and industry stakeholders, renewing the contract since 2010 has been difficult because of the uncertainly
surrounding the future of the arena and other potential arena development in Seattle. However, we
assume that under each future scenario, the certainly of the assumed changes will allow the city to
secure a naming-rights partner for the arena that is consistent with contracts for other similar facilities.
For the four future scenarios, we make the following assumptions regarding naming rights:
•

Scenario A1: should the facility become a secondary large arena in Seattle without major
professional tenants, we assume that gross annual naming rights revenue will be $200,000 per
year. As previously described in this report, there are few such arenas in the country in this
category, and they typically appear in the largest markets.
Allstate Arena in Rosemont, Illinois (near Chicago) receives $1.5 million per year; however, the
arena currently has three professional and collegiate tenants and is in the country’s third-largest
market. The Izod Center (which is planned to close in the coming years and is located
immediately outside of New York City) receives $750,000 per year, which is decreased from the
$1.4 million per year when the NBA’s New Jersey Nets played at the arena.

•

Scenario A2: assuming that KeyArena remains the primary large arena in Seattle and is
improved, but is not a venue for major professional sports, we estimate gross annual naming
rights to be $1.2 million. In 2010, a consulting study valued the arena’s naming rights at $1 million
in this scenario.

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Other similar arenas’ naming rights deals include the Sprint Center in Kansas City ($2.5 million),
the BOK Center in Tulsa ($550,000), CenturyLink Center in Omaha ($930,000), the Denny
Sanford PREMIER Center in Sioux Falls ($750,000), and the Wells Fargo Arena in Des Moines
($575,000).
•

Scenario B1: assuming that the arena hosts a major professional sports tenant and is the only
such arena in Seattle, we assume that gross annual naming rights are $3 million.
Existing deals across the country in this range include the FedEx Forum in Memphis ($4.5
million), the Amway Center in Orlando ($4 million), and the CONSOL Energy Center in Pittsburgh
($4 million). However, we assume that the NHL tenant will retain 100 percent of naming rights
revenue in this scenario.

•

Scenario B2: with both an NHL and NBA tenant (as well as the other tenants), we assume that
gross annual naming rights will be $5 million. For comparison, NHL/NBA arena naming rights
contracts in Dallas, Toronto, Philadelphia, Boston, Washington DC, Denver, and Los Angeles
range from approximately $1.5 million to $6.5 million per year. Similar to Scenario B1, we assume
that the major professional sports tenants will retain all naming rights revenues.

•

Scenario C: this could consist of one or multiple naming rights partnerships, but in this scenario
we assume a gross total of $250,000 per year. In this scenario, the facility is assumed to have
one tenant (SU). Across the country, a number of small and mid-sized arenas have naming rights
contracts that generate $100,000 to $300,000 or more per year (most of which have at least one
minor-league and/or collegiate tenant).

Seattle Center owns the rights to sell the arena’s naming rights. In each scenario, we assume that annual
costs associated with selling naming rights are 10 percent (this could be in the form of Seattle Center’s
own selling costs or a commission to a third-party marketer), and that the value of a suite is included in
the deal and deducted from the naming-rights contract. As a result, net annual revenues to the arena
range from zero to $1.2 million in the first year of the projections (to be inflated in later years).
Premium Seating

Key currently has multiple premium seating options (suites and club seats) that can be purchased on a
long-term or event basis. Because of the lack of major concerts or tenants, few suites are currently
occupied on a long-term basis. However, the combination of annual and event-based premium seat sales
has generated approximately $1.3 million to $1.4 million in gross revenues in recent years, and the arena
typically retains slightly less than half of the gross revenues, after expenses of AEG (which manages the
premium sales).
In general, we assume decreased levels of premium seating but more variety of offerings. In Scenarios
A1 and A2, we assume a total of 36 suites and approximately 700 club seats. In Scenario B (with major

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professional tenants), we assume 36 suites, approximately 700 club seats, and 160 loge seats. In
Scenario C, we assume that the large venue inside the arena would have 35 premium suites, and the
small venue would have 13.
We also assume that a portion of available suites will be leased on a per-event basis. Consistent with
current lease terms with arena tenants, the arena would retain net premium seating revenues, with the
exception of an NHL or NBA franchise, as the team(s) would control all revenues from premium seating in
Scenario B. As a result, the arena’s annual share of premium seating revenue ranges from zero to
approximately $1 million in the first year of operations (to be inflated in later years).
Sponsorship

Similar to naming rights, the ability of the arena to sell sponsorships has been hurt recently by uncertainly
surrounding the future of KeyArena and other potential arena development in Seattle, as potential
partners are generally unwilling to make long-term commitments to major partnerships without knowing
what will happen with the city’s arenas. And the value of these assets will be significantly impacted by
Key’s uses and the presence or lack of other competing facilities in Seattle.
In the last five years, annual sponsorship revenue has had wide fluctuations, from as little as $15,000 to
more than $330,000 last year. (Similar to premium seating, sales are managed by AEG and the arena
retains a share of gross revenues.) For the four future scenarios, we make the following assumptions,
based on past amounts at KeyArena and amounts achieved at other similar facilities across the country.
•

Scenario A1: gross annual revenues of $350,000 in 2020.

•

Scenario A2: gross annual revenues of $575,000 in 2020.

•

Scenario B1: gross annual revenues of $6 million in 2020. In this scenario, we assume that the
NHL franchise would have the right to sell most advertising within the arena (which could also
involve AEG). We assume that the arena will have the right to sell some advertising and
sponsorships outside of the team’s inventory, and that it would retain 10 percent of gross
revenues.

•

Scenario B2: rather than $6 million in gross annual revenues, we assume that the amount
increases to $8 million with the addition of an NBA tenant. All other assumptions from Scenario
B1 remain constant.

•

Scenario C: gross annual revenues of $350,000 in 2020.

Other Revenues

In recent years, “other” revenues have averaged approximately two percent of all other revenues, and this
amount is assumed in all future scenarios. These revenues are typically pass-through revenues that are
collected by the arena and paid out to promoters, most often for event advertising.

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Operating Expenses
Event Expenses

These expenses represent the direct cost of staging events at the arena, including supplies, labor,
technical support, security, and others (and as described above, many of these expenses are reimbursed
to the facility). For the future scenarios, per-event expenses are based on past expenses of events at
KeyArena, the expected impact of each renovation scenario on event expenses, and the actual expenses
of similar events at other arenas. Assumed per-event expenses are summarized below.
Table 38: Per-Event Arena Expenses, Scenarios A-C
Scenario
A1
NBA
NHL
Storm
Rollergirls
Seattle University
Concerts
Family Shows
Other Entertainment
Other Sports
Graduations
Other - Private
Other - Major/Public

$25,000
$60,000
$20,000
$75,000
$40,000
$15,000
$7,500
$75,000

Scenario
A2

$25,000
$25,000
$22,500
$70,000
$22,500
$85,000
$50,000
$15,000
$7,500
$75,000

Scenario
Scenario C
B1
$50,000
$50,000
$25,000
$22,500
$70,000
$22,500
$85,000
$50,000
$15,000
$7,500
$75,000

$20,000
$45,000
$17,500
$65,000
$40,000
$12,500
$5,000
$50,000

Source: AECOM

Non-Event Expenses

These expenses represent expenses that are not directly associated with events, such as cleaning,
maintenance, repairs, and management. While these expenses are not identified with individual events
per se, they do correlate with the activity in, and usage of, the arena; for example, increased usage would
lead to greater cleaning and maintenance expenses. In the last five years, non-event expenses have
consistently ranged from approximately 40 percent to 50 percent of total event expenses.
For future scenarios A2, B, and C, we assume that this ratio will be 45 percent. However, for Scenario A1,
while non-event expenses are expected to decrease, we assume that they will not necessarily decrease
to the extent that event expenses will decrease, as there is a fixed component to these costs. In Scenario
A1, we assume that non-event expenses will be 60 percent of event expenses.
Utilities

The arena’s utilities expenses are incurred for its gas, water, electricity, and garbage service. Future
utilities expenses for the four scenarios are generally based on past expenses at KeyArena, anticipated
usage of the arena, and the actual expenses of similar facilities. For the four scenarios, estimated utilities
expense in 2020 ranges from approximately $450,000 to $3.4 million.

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Major Maintenance

The arena has a Major Maintenance Fund that can be used to pay for larger maintenance and
improvement projects. In recent years, this expense has ranged from approximately $70,000 to $135,000
per year. For the projection period, we assume these expenses will increase incrementally over time, as
the renovated facility ages, and vary based on the individual scenarios
Taxes

This category primarily consists of payments of business and occupation (B&O) taxes on the arena’s
revenues, in addition to smaller amounts of sales tax paid on arena revenues from equipment rentals. In
the past, tax expense has consistently been two to three percent of Key’s total revenues, and in the
future, we assume 2.5 percent per year, which is the recent average.

Financial Proforma Statements
Based on the assumptions described above, projections of all revenues and expenses are shown below
for the four scenarios.

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Scenario A1

Table 39: Financial Proforma, Scenario A1 ($000s)
2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

Operating Revenues (Net)
Rent
Reimbursements
Ticketing
Concessions
Programs & Novelties
Naming Rights
Premium Seating
Sponsorship
Other

$699
1,304
367
410
65
179
360
238
72

$709
1,337
377
420
66
183
369
223
74

$719
1,370
386
430
68
188
378
229
75

$730
1,405
396
441
70
192
387
235
77

$740
1,440
406
452
71
197
397
240
79

$751
1,476
416
464
73
202
407
246
81

$762
1,513
426
475
75
207
417
253
83

$774
1,551
437
487
77
212
428
259
84

$785
1,589
448
499
79
218
438
265
86

$797
1,629
459
512
81
223
449
272
88

$3,695

$3,758

$3,844

$3,932

$4,023

$4,116

$4,211

$4,308

$4,408

$4,511

$2,070
1,242
453
57
92

$2,122
1,273
464
58
94

$2,175
1,305
475
89
96

$2,230
1,338
487
91
98

$2,285
1,371
500
125
101

$2,343
1,406
512
128
103

$2,401
1,441
525
164
105

$2,461
1,477
538
168
108

$2,523
1,514
551
207
110

$2,586
1,551
565
212
113

Total Operating Expenses

$3,914

$4,011

$4,141

$4,245

$4,382

$4,491

$4,636

$4,752

$4,905

$5,027

Net Operating Income

($219)

($254)

($297)

($312)

($359)

($375)

($425)

($443)

($496)

($516)

Total Operating Revenues
Operating Expenses
Event Expenses
Non-Event Expenses
Utilities
Major Maintenance
Taxes

Source: AECOM

In this scenario, we assume that the arena would operate at a deficit, primarily due to the loss of many
events (and in particular, higher-rated events and tenants) to the new SoDo arena. And because of the
decreased usage of the arena, other assets such as sponsorships and premium seating offerings would
become less valuable.
Compared to historical levels, we expect annual arena revenues and expenses to decrease. However,
revenues are forecasted to decrease more than expenses, which would lead to the operating deficit
(beginning at approximately $220,000 in 2020 and increasing to $515,000 in 2029).

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Scenario A2

Table 40: Financial Proforma, Scenario A2 ($000s)
2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

Operating Revenues (Net)
Rent
Reimbursements
Ticketing
Concessions
Programs & Novelties
Naming Rights
Premium Seating
Sponsorship
Other
Total Operating Revenues

$583
3,379
2,612
1,554
278
1,177
992
358
219

$578
3,463
2,677
1,593
284
1,206
1,017
367
224

$573
3,550
2,744
1,633
292
1,237
1,042
376
229

$568
3,638
2,813
1,673
299
1,267
1,068
385
234

$563
3,729
2,883
1,715
306
1,299
1,095
395
240

$558
3,823
2,955
1,758
314
1,332
1,123
405
245

$553
3,918
3,029
1,802
322
1,365
1,151
415
251

$547
4,016
3,105
1,847
330
1,399
1,179
425
257

$541
4,117
3,182
1,893
338
1,434
1,209
436
263

$536
4,219
3,262
1,941
347
1,470
1,239
447
269

$11,150

$11,409

$11,675

$11,947

$12,226

$12,512

$12,805

$13,106

$13,414

$13,729

$5,363
2,413
594
57
279

$5,497
2,474
609
58
285

$5,634
2,535
624
89
292

$5,775
2,599
640
91
299

$5,920
2,664
656
125
306

$6,068
2,730
672
128
313

$6,219
2,799
689
164
320

$6,375
2,869
706
168
328

$6,534
2,940
724
207
335

$6,697
3,014
742
212
343

$8,705

$8,923

$9,175

$9,404

$9,670

$9,911

$10,191

$10,445

$10,740

$11,008

$2,614

$2,660

$2,673

$2,721

Operating Expenses
Event Expenses
Non-Event Expenses
Utilities
Major Maintenance
Taxes
Total Operating Expenses
Net Operating Income

$2,445

$2,487

$2,500

$2,543

$2,556

$2,601

Source: AECOM

Scenario A2 is the one that is most similar to the current KeyArena, although we assume a wide range of
improvements to the facility in the future. In this scenario, forecasted arena usage is similar to recent
historical levels, but its revenue-generating features would increase (as would its costs to operate). In a
first renovated year of operation, we estimate net operating income of approximately $2.4 million,
compared to a range of approximately $580,000 to $1.2 million in Key’s last three years.

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Scenario B1

Table 41: Financial Proforma, Scenario B1 ($000s)
2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

Operating Revenues (Net)
Rent
Reimbursements
Ticketing
Concessions
Programs & Novelties
Naming Rights
Premium Seating
Sponsorship
Other
Total Operating Revenues

$4,112
4,391
2,076
1,278
227
0
0
679
255

$4,180
4,501
2,128
1,310
233
0
0
696
261

$4,249
4,613
2,181
1,343
239
0
0
713
267

$4,321
4,728
2,235
1,376
245
0
0
731
273

$4,394
4,847
2,291
1,411
251
0
0
749
279

$4,469
4,968
2,349
1,446
257
0
0
768
285

$4,546
5,092
2,407
1,482
264
0
0
787
292

$4,625
5,219
2,467
1,519
270
0
0
807
298

$4,706
5,350
2,529
1,557
277
0
0
827
305

$4,788
5,483
2,592
1,596
284
0
0
848
312

$13,018

$13,308

$13,605

$13,909

$14,221

$14,542

$14,870

$15,206

$15,550

$15,904

$6,969
3,136
2,263
57
325

$7,144
3,215
2,319
58
333

$7,322
3,295
2,377
89
340

$7,505
3,377
2,437
91
348

$7,693
3,462
2,498
125
356

$7,885
3,548
2,560
128
364

$8,082
3,637
2,624
164
372

$8,285
3,728
2,690
168
380

$8,492
3,821
2,757
207
389

$8,704
3,917
2,826
212
398

$12,751

$13,068

$13,424

$13,759

$14,133

$14,485

$14,879

$15,251

$15,665

$16,056

($10)

($45)

($115)

($153)

Operating Expenses
Event Expenses
Non-Event Expenses
Utilities
Major Maintenance
Taxes
Total Operating Expenses
Net Operating Income

$267

$239

$181

$151

$89

$56

Source: AECOM

As previously described, the primary difference between Scenario B and Scenario A2 is the addition of an
NHL tenant (and the required physical modifications in order to accommodate major professional sports).
In many cases, the arena would generate additional revenues from NHL games; however, we also
assume that the NHL team would retain most revenues from its events. In this scenario, the arena’s
operating expenses would also increase significantly from current levels.
As shown above, we forecast a modest operating profit or deficit each year, ranging from a deficit of
approximately $150,000 to a $265,000 profit. However, this result would be significantly affected by any
contributions towards the renovation project from the NHL franchise; relatively lower capital investment
could lead to a greater share of revenues to be retained by Key, and vice versa. It is also possible that the
franchise could pay for all renovation costs, take responsibility for overall arena operations, and/or
assume all operating risk, in return for guaranteed rent payments to the city. However, in this scenario,
we have assumed that the team is a tenant of the arena.

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Scenario B2

Table 42: Financial Proforma, Scenario B2 ($000s)
2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

Operating Revenues (Net)
Rent
Reimbursements
Ticketing
Concessions
Programs & Novelties
Naming Rights
Premium Seating
Sponsorship
Other

$7,753
5,161
1,610
918
173
0
0
905
330

$7,896
5,290
1,651
941
177
0
0
928
338

$8,043
5,422
1,692
965
182
0
0
951
345

$8,193
5,557
1,734
989
186
0
0
975
353

$8,347
5,696
1,778
1,014
191
0
0
999
360

$8,505
5,839
1,822
1,039
196
0
0
1,024
368

$8,667
5,985
1,868
1,065
201
0
0
1,050
377

$8,834
6,134
1,914
1,091
206
0
0
1,076
385

$9,004
6,288
1,962
1,119
211
0
0
1,103
394

$9,178
6,445
2,011
1,147
216
0
0
1,130
403

$16,850

$17,220

$17,599

$17,987

$18,385

$18,793

$19,212

$19,640

$20,080

$20,530

$8,191
3,686
3,394
85
421

$8,396
3,778
3,479
87
430

$8,606
3,873
3,566
119
440

$8,821
3,970
3,655
122
450

$9,042
4,069
3,747
156
460

$9,268
4,171
3,840
160
470

$9,500
4,275
3,936
197
480

$9,737
4,382
4,035
202
491

$9,980
4,491
4,136
241
502

$10,230
4,603
4,239
247
513

Total Operating Expenses

$15,778

$16,171

$16,604

$17,018

$17,473

$17,908

$18,388

$18,846

$19,350

$19,833

Net Operating Income

$1,072

$1,049

Total Operating Revenues
Operating Expenses
Event Expenses
Non-Event Expenses
Utilities
Major Maintenance
Taxes

$995

$970

$912

$885

$824

$794

$729

$697

Source: AECOM

The major difference between Scenario B2 and B1 is the addition of an NBA tenant. While this would add
another approximately 45 major events per year, this would also likely cause the arena’s number of other
sports and entertainment events to decrease, due to the loss of available event days. Similar to an NHL
franchise, we assume that an NBA franchise would also generally retain its event-related revenues.
As shown above, we estimate that both revenues and expenses would increase relative to Scenario B1,
and the NBA team’s rent would more than offset the loss of arena revenues from other events. As a
result, the facility’s net operating income would increase from Scenario B1, to approximately $1.1 million
in 2020, under the assumptions described in this report.

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Scenario C

Table 43: Financial Proforma, Scenario C ($000s)
2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

Operating Revenues (Net)
Rent
Reimbursements
Ticketing
Concessions
Programs & Novelties
Naming Rights
Premium Seating
Sponsorship
Other
Total Operating Revenues

$910
1,860
531
581
94
235
586
218
100

$921
1,907
544
596
96
240
600
223
103

$932
1,955
558
611
98
246
615
229
105

$943
2,003
572
626
101
253
631
235
107

$955
2,054
586
642
103
259
646
240
110

$967
2,105
601
658
106
265
662
246
112

$979
2,157
616
674
108
272
679
253
115

$991
2,211
631
691
111
279
696
259
117

$1,004
2,267
647
708
114
286
713
265
120

$1,017
2,323
663
726
117
293
731
272
123

$5,114

$5,230

$5,349

$5,470

$5,595

$5,722

$5,853

$5,988

$6,125

$6,266

$2,953
1,329
566
57
128

$3,027
1,362
580
58
131

$3,102
1,396
594
89
134

$3,180
1,431
609
91
137

$3,260
1,467
624
125
140

$3,341
1,503
640
128
143

$3,425
1,541
656
164
146

$3,510
1,580
672
168
150

$3,598
1,619
689
207
153

$3,688
1,660
706
212
157

$5,032

$5,157

$5,316

$5,448

$5,616

$5,756

$5,932

$6,080

$6,266

$6,422

($21)

($33)

($79)

($92)

($141)

($157)

Operating Expenses
Event Expenses
Non-Event Expenses
Utilities
Major Maintenance
Taxes
Total Operating Expenses
Net Operating Income

$82

$73

$33

$22

Source: AECOM

In this scenario, we assume that the venue would experience a small operating profit or loss on an annual
basis. In the first five years, the projected net operating income is never more than $82,000, and the
deficit then increases to approximately $160,000 in the tenth year.

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SCENARIO D – REPURPOSING OPTION
The market analysis for Scenario D concluded with a number of potential attraction concepts which were
consistent with the Seattle Center mission statement, could physically fit within KeyArena, had the
potential to appeal to both residents and visitors and promote vitality at Seattle Center, and have the
potential to generate net positive revenue. All of the concepts were also screened for compatibility with
basic market criteria and the existing array of attractions already in the market.
The list of attraction types that suitably met these criteria includes:


An indoor sports adventure park,



A high technology edutainment attraction,



An IP-based attraction,



A STEM or “maker” center, and



A dinner theater attraction.

As noted in the market analysis, there is no shortage of attraction ideas or concepts that could potentially
meet the criteria for locating at Seattle Center in KeyArena, and if a request for development concepts
were issued, a large number of creative concepts would likely be generated.
However, the goal of Seattle Center is for the use in KeyArena to be able to generate enough positive
revenue that their contribution to Seattle Center would be similar to the current KeyArena contribution. As
such, rather than model a very specific attraction concept, we decided to conduct high level financial
analysis on a number of entertainment and attraction concepts to understand the range of possible
revenues that may be generated for the City.
Assumptions
There are three very important assumptions in our analysis:


We assume that the City is not actively managing the attractions, but rather managing a ground
lease or more traditional real estate lease with the operator or tenant that, depending on use, is
based on rent per square foot or a percentage of revenue. This is different than the current use of
KeyArena where the City is actively involved in the management of the entertainment function.



We have included some commercial uses that are thematically related to each concept. For
example, we have included some type of specialty sports retail space along with the adventure
park. A velodrome, for example, could include bike repair and sales shops.



As noted above, the financial analysis shown below has been provided for a wide range of
attractions in order to demonstrate the economic implications of reusing KeyArena for an
alternative entertainment use.

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Results
We examined five potential attraction concepts, combined with some modest commercial retail, restaurant
or office use, to understand the range of possible financial outcomes for very different types of attractions.
It should be noted that our analysis assumes typical, industry standard business models and does not
assume any unique public-private partnerships that may be developed.
Key inputs and results are shown in the table below. As indicated, despite a wide range of inputs,
assumptions, sources of revenue, per capita spending estimates, attendance levels, mix of residents and
tourists, and other factors, the results are all generally within a similar range. Most of the attractions can
generate between $500,000 and $1 million in revenue to the City on their own, assuming typical operating
costs. However, the cost of maintaining and operating the KeyArena facility in excess of usual operating
costs for most attractions offsets most of the income.

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Table 44: Preliminary Financial Analysis for Hypothetical Attraction Concepts
Category

Alternative D1

Alternative D2

Alternative D3

Alternative D4

Alternative D5

Attraction Description

Edutainment Attraction

Dinner Theater

Sports Adventure Park

STEM / Incubator Center

Indoor Boutique Theme
Park

Description / Examples

Sega Orbi, National Geographic
or Smithsonian attraction,
FlyOver Experience

Australian Outback
Spectacular, Pirate’s Dinner
Adventure, Cirque du Soleil

Possible mix of: velodrome, rock
climbing, ice climbing, surf park, Incubator space, "maker"
skate park, ropes courses,
space
trampoline, etc.

Indoor theme park: Lego
Discovery Center with
rides added

Size

60,000 - 70,000 SF

30,000 - 40,000 SF

50,000-75,000 SF indoor
20,000 - 30,000 SF outdoor

25,000 SF

200,000 SF

Annual Attendance

400,000 - 600,000

100,000

400,000-450,000

n/a - not visitor destination

600,000-700,000

Per Capita

$23 (admission, retail & F&B)

$80

$20

n/a

$30

Attraction Component

Gross Revenue

$12.5 million

$8 million

$8.5 million

n/a

$18 -$19 million

Operating Margin

20%

20%

25%

n/a

30%

Operating Costs

$10 million

$6.4 million

$6.4 million

n/a

$13 million

NOI - Attraction

$2.5 million

$1.6 million

$2 million

n/a

$5 -$6 million

Potential Revenue to City

5% of gross
$500,0000-$650,000

7% of gross
$500,000 - $600,000

7% of gross
$600,000

$100,000

6% of gross
$1.1 million

Retail

Destination specialty retail

n/a

Sports retailer, bikes shops, etc. n/a

Included in park operation

F&B

Destination themed restaurant/
event space

n/a

Sports themed restaurants,
sports bars, etc.

Cafes, restaurants

Included in park operation

Office

Educational technology,
science companies

n/a

n/a

Related "market rate" office
space

Included in park operation

Total Size (SF)

30,000 SF

n/a

20,000 SF

25,000

n/a

Average Rent

$540,000 annually

n/a

$360,000

$300,000 - $400,000

n/a

Total Size (SF)

Approximately 100,000 SF

Up to 40,000 SF

75,000-100,000 SF indoor +
20,000 - 30,000 SF outdoor

50,00 SF

200,000 SF

Total Potential Revenue to
City

$1 million

$500,000 - $600,00

$900,000

$400,000 - $500,000

$0

Cost to Maintain Key Arena

$800,000 - $1 million

$800,000 - $1 million

$800,000 - $1 million

$800,000 - $1 million

$800,000 - $1 million

Potentially negative

Break even

Negative Net Revenue

Up to $300,000

Additional Components

Total Project

Potential Net Revenue to City Up to $200,000

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Implications


Attractions are often profitable, but do not typically generate revenues that private real estate or
commercial development can. Instead, they tend to act as anchors that enhance and create value
in surrounding properties. If the City as landowner does not create real estate opportunities that
allow this value to be captured,



There is market potential for a range of attractions and entertainment venues, but most of them
will not maintain the current KeyArena net contribution to Seattle Center.



We reviewed a wide range of attraction types, from dinner theaters to STEM incubator and
educational centers to sports adventure parks and high technology cultural attractions. While the
inputs and business models are very different for all of these, with very different attendance
estimates, pricing models, and operating margins, the “bottom line” was very consistent. All of the
attractions generated between $500,000 and $1.2 million of revenue for the City annually, before
considering the additional cost of maintaining the KeyArena facility.



After the cost of operating KeyArena is considered, the net revenue for the City was either
negative or very modest, due primarily to the cost of maintaining the arena facility for uses that
underutilize the facility. While it may be possible to combine some of these concepts to generate
more revenue or develop a strategic partnership with one entity (i.e. the Bass Pro Shops in the
Memphis Pyramid), it is our opinion that if sports or concert uses are not viable, these are not
likely to fulfill the stated goals and the City may want to consider a broader approach to assessing
site opportunities that do not necessarily involve keeping the existing structure.

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8. Housing Potential
As part of this assignment, we reviewed several case studies for arenas that were demolished and/or
repurposed for mixed use development, including housing. During the course of our stakeholder
interviews, several individuals raised questions about the potential for either market rate or workforce
housing on the site, should the opportunity arise.
In order to provide context to address the issue of housing potential, we conducted a high-level
assessment of market indicators for the housing market in Seattle and in the Seattle Center submarket. It
is important to note that this is not a residential demand or feasibility study and is only intended to provide
a broad context of housing market performance and issues in Seattle to inform possible options for the
KeyArena site.
In this section, we review drivers of demand, supply metrics, and key characteristics of the for-rent and
for-sale markets. Next, we discuss other considerations, including the possibility of workforce housing.

DRIVERS OF DEMAND
The largest driver of residential demand is household growth. Since 2010, Seattle has added nearly
15,000 households and is expected to add an additional 23,000 through 2019.
Figure 43: Households in Seattle

350,000
321,500
298,300

300,000
283,500

250,000
2010

2014

2019

Source: ESRI

Seattle’s growth rates for households, owner households, and median household income are all set to
rise faster than rates for the state and the nation. These indicators suggest that Seattle can support
growth in the residential market.

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Figure 44: Growth Rates, 2014-2019

5%

4.4%

4%
3%

Seattle

2%

1.5%

Washington
1.3%

US

1%
0%
Households

Owner Households

Median Household
Income

Source: ESRI

SUPPLY METRICS
Over the past 15 years, residential permits in the Seattle have fluctuated, particularly during the recession
starting in 2009. The long-term average is over 4,000 units per year. Permits obtained in 2012 and 2013
outpace the long-term average, likely in reaction to the depressed levels of permits between 2009 and
2011.
Figure 45: Residential Permits in Seattle, 1998-2013

8,000

7,297
6,677

6,000

4,000

2,000

Total
Permits
Long-term
Average:
4,323

0

Source: U.S. Bureau of the Census

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Of the residential permits pulled, the vast majority were for multi-family units, as displayed in Figure 46.
Figure 46: Residential Permits by Type in Seattle, 1998-2013

Multi-Family,
87%

Single Family,
13%

Source: US Bureau of the Census

SUPPLY IN THE STUDY AREA
Supply in downtown Seattle has been very active, especially in 2014. The map in Figure 47 shows the
location of development projects in Seattle. Sites in green and blue are residential developments. Out of
all developments in downtown, 65 percent of projects include residential units.
Figure 47: Map of Developments in Seattle

Source: https://www.google.com/maps/d/viewer?mid=z_Uf08eywQjk.k-13ENVDTX1g

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TYPE OF RESIDENTIAL UNITS
In downtown in the past 4 years, all of the residential deliveries have been in apartment buildings. Forrent will continue to be favored in the near term, although two condominium projects are slated for
completion within the next two years. By the end of last year, there were 5,253 apartment units in 32
projects under construction and 876 condominium units in two projects. Deliveries in 2017 are likely to be
higher than displayed as more construction permits are approved.
Figure 48: Historic and Projected Residential Deliveries in Downtown Seattle

Source: Metropolitan Improvement District and Downtown Seattle Association. “Development Guide, December 2014 Update”

UPTOWN NEIGHBORHOOD
The Uptown neighborhood differs from Seattle in several key ways, including the preponderance of
renters, as seen in Figure 49, and the relatively more affordable units, as seen in Figure 50.
Figure 49: Renters vs. Owners, Seattle and Uptown

Uptown, 77%
Uptown, 23%
Seattle, 53%
Seattle, 47%

Renters
Owners

Source: City of Seattle Office of Housing

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Figure 50: Renter’s Share of Income for Rent

Uptown, 40%

Uptown, 32%
Seattle, 26%
Less than 20% of HH
income

Seattle, 47%

20 to 29% of HH income
30% or more of HH
income
Seattle, 27%
Uptown, 28%

Source: City of Seattle Office of Housing

FOR-RENT MULTI-FAMILY MARKET
The submarket for for-rent multi-family is displayed in Figure 51 below.
Figure 51: Multi-Family Submarket

Source: REIS

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The submarket contains nearly 32,000 apartment units, or 15 percent of the supply of the Seattle metro
area, as displayed the figure below.
Figure 52: Multi-family Submarket Inventory

Remainder
Metro Area
85%

Submarket
15%

Source: REIS

The submarket has a greater number of markedly smaller units than the greater metro area, particularly
studios. Per conversations with developers familiar with the Uptown area, Uptown is known as more of a
transient neighborhood – where young professionals rent an apartment upon arriving in Seattle and then
settle in a different neighborhood.
Figure 53: Multifamily Unit Mix in Submarket and Seattle Metro

100%

1%

7%

27%
75%
50%

44%

2BR

49%

1BR
41%

25%

3BR+

Studio

24%
8%

0%
Submarket

Seattle Metro

Source: REIS

Over the past six years, vacancy rates in the Seattle metro have been on an overall decline. Vacancy
rates in the submarket have spiked in recent years; however, that can be attributed to the volume of new
supply in the area, which is still absorbing the new units.

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Figure 54: Vacancy Rates

Source: REIS

Rents in the area are approximately 30% higher than the greater metro area and have been increasing at
a faster pace as well. The compound annual growth rate for the submarket over the past six years is 7.4
percent, compared to 5.2 percent for the metro area.
Figure 55: Average Rent

$1,800

$1,732

$1,600
Submarket

$1,400

Seattle Metro
$1,210

$1,200
$1,000
$800
2009

2010

2011

2012

2013

2014

Source: REIS

Although vacancy rates in the submarket are currently high, the high and increasing rents indicate that
this is a desirable area for housing. Per conversations with brokers, this area was identified as desirable
for residential use.

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FOR-SALE MULTI-FAMILY MARKET
There has been limited supply within the past few years; however, two condominium buildings are
currently under construction in downtown Seattle: Luma condominiums and Insignia.
Luma condominiums are located at the border of the First Hill and Pike/Pine neighborhoods, and the
project consists of 168 units in 24 stories. Pricing details are located below in Figure 56. Sales began in
April 2015.
Figure 56: Pricing at Luma Condominium Project
Unit Type
Open 1BR, 1BA

Site (SF)

Price Range

602-620

$350,000-$400,000

1BR, 1BA

648-1,012

$400,000-$800,000

1BR+Den, 1BA

847-1,356

$450,000-$600,000

2BR, 2BA

1,322-1,529

$700,000-$1,000,000

2BR+Den, 2 BA

1,322-1,529

$800,000-$1,000,000+

Penthouses

1,586-1,721

$1,000,000+

Source: Seattlecondosandlofts.com

Insignia is the second condominium project in downtown Seattle, with a total of 707 units. As of June
2015, 361 condos, or 51 percent, had been sold. The units were listed in September 2013. The average
price per square foot is $700 with prices starting in the $400,000s. Overall, the price of the condos has
increased by approximately 11 percent during the year ending March 2015.

DEVELOPMENT CONDITIONS
We spoke with many developers currently active in the area. General trends based on these
conversations are as follows:

MACRO TRENDS


Technology jobs have fueled recent job growth, including Amazon and Facebook.



Job growth and resulting migration has pushed rents up. Only within the past few years has
Seattle’s residential pricing outpaced its income growth.



Multi-family investors are entering the market, particularly Chinese nationals and domestic
institutional investors.



Permanent financing loan-to-value ratio is approximately 65-75 percent.



Cap rates are approximately five percent.

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SEATTLE TRENDS


Construction costs vary from $130 to $190 per square foot, and for high-rise development are
between $400,000 and $500,000 per unit.



Land values for residential development are highly contingent upon zoning, and can range from
$55,000 to $75,000 per unit for low-rise developments and $40,000 to $50,000 per unit for highrise development. Per square foot land costs can range from $250 to $400.

•

Parking requirements are lower than 1.0 per unit.

•

Overall trends are towards smaller residential units.

UPTOWN TRENDS
•

Residents are able to walk to employment downtown.

•

Approximately 70% of tenants are from out-of-state.

•

Turnover is high, as this is a transitional neighborhood for the apartment units.

•

Part of the neighborhood is single-family homes.

•

Uptown is currently going through a community visioning process.

WORKFORCE HOUSING
We also had conversations with developers and the City of Seattle about the possibility of workforce
housing in Seattle. The following are the highlights of those conversations.

DEMAND IN UPTOWN
•

Due to its central location, the Uptown area is a highly desirable area for workforce housing.
Positive attributes include transit access, nearby jobs, and amenities.

•

Given the recent rental increases, there can be considered unlimited demand for affordable
housing.

FINANCING
•

Most financing sources for affordable housing target households under 60 percent AMI or 80 to
85 percent AMI. The multifamily tax exempt (MFTE) program provides financing for
developments with at least 20 percent of residents at 80 or 85 percent (depending on the unit
type) AMI or less. Exemptions last for 12 years and AMI requirement varies by unit type.
Incentive zoning offers another financing mechanism, but is not currently available in the Uptown
area.

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•

Due to current financing tools for affordable housing, there has been a challenge in meeting the
housing needs of households that are between 60 and 85 percent AMI, which is generally
considered one segment of workforce housing.

•

Given that the City owns the land that that KeyArena is located, it has the ability to subsidize any
housing developments that may occur through reduced or free land cost. This would likely
provide an opportunity to create workforce housing, although the feasibility would depend on
specific economic factors, land area, number of units, targeted income levels, and other
development and policy issues.

CAPACITY ANALYSIS
In order to assess the possible number of units that could be developed on the KeyArena site, AECOM
conducted a high level physical capacity analysis based upon similar developments nearby. There are
several new apartment buildings near KeyArena, including one that just opened directly opposite the
entrance to KeyArena. This development, the Astro apartments, was developed on half a block, with
approximately 19 percent studio units between 465 and 525 square feet), 67 percent one-bedroom units
of two types, between 480 to 785 square feet), and 14 percent two-bedroom units between 950 and 1,055
square feet. Other apartment buildings near KeyArena include the Elliott Bayview Apartments (luxury
apartment homes), Axis apartments (116 units – studio to 3 bedrooms), and EXPO apartments (studio to
2 bedroom).
Using similar height restrictions (although the KeyArena site may allow for an additional story), and
assuming that KeyArena encompasses roughly a full block, six-story structures could include the
following:


Approximately 20,000 to 25,000 square feet on the ground floor;



Five stories of residential apartment units, with between 400 and 500 residential apartment units;



Parking for approximately 400 to 500 vehicles (less parking is likely possible).



An extra floor would increase the number of apartment units by between 40 and 50.

It is important to note that these estimates are highly preliminary and not the result of any detailed
planning or architectural work, and are not based on any financial feasibility analysis. The purpose of the
exercise was to determine a range in number of units that may be possible from a physical perspective.

CONCLUSION
The Seattle housing market has been strong in recent years, and the Seattle Center submarket would
generally have potential for market rate housing, particularly for rental products. Seattle has experienced
levels of development above the long-term average within the past few years, and that trend is set to
continue. The majority of residential products currently under development and planned are rental

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apartments, although for-sale products are re-entering the market after a period of dormancy. Increasing
rental rates have driven apartment deliveries and vacancies are currently higher than in previous years as
new inventory comes into the market.
Housing affordability has declined in Seattle, with 40 percent of Uptown residents spending more than 30
percent of their household income on rent. Housing policies and financing mechanisms available in
Seattle have supported development of units for those with approximately 80 to 85 percent AMI, as well
as those at under 60 percent AMI. There is currently limited financing available to meet the housing
needs of households between 60 and 80 to 85 percent AMI, which is typically considered a segment of
workforce housing.
The KeyArena site is centrally located and would be a strong affordable or workforce housing site, and
would also have potential for market rate apartments. As the City owns the land, there would be
opportunities to serve a range of income levels, depending on a number of development, economic, and
policy factors. Housing use on this site would need to be integrated with community preferences and the
visioning process of the Uptown area. From a physical capacity perspective, it would be possible to
develop between 400 and 500 units, depending on a number of variables related to site, planning,
market, and economic factors.

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