From the Sonics’ departure to the Kraken’s arrival, here’s how KeyArena became Climate Pledge Arena

It turns out the lost battle over keeping the Sonics was the opening salvo in a much longer fight to create a “new” major sports arena for the Kraken and likely home for the NBA team’s revival.

Then-Sonics owner Howard Schultz sold the team in 2006 to a group led by Clay Bennett that eventually moved it to Oklahoma City in 2008 largely because KeyArena badly needed the kind of $1.15 billion overhaul that has become Climate Pledge Arena.

Since then, any Sonics rebirth was predicated upon a serious arena upgrade. Former Microsoft CEO Steve Ballmer offered to buy the Sonics from Bennett in 2008 and pay half of a $300 million KeyArena upgrade, with the city and state covering the remainder.

But state lawmakers largely opposed further such subsidies, and Bennett wasn’t interested in selling.

In subsequent years, Ballmer equated reviving the Sonics to a real-estate challenge — estimating a new arena was needed at a cost between $300 million and $500 million.

“I’m sure we’ll someday wind up with that problem solved and with a basketball team back here in Seattle,” Ballmer told a rotary luncheon in 2011.

It has taken another decade, but that arena solution is finally at hand.

Along the way, Illinois-based Chicago Wolves AHL owner Don Levin was rumored to be considering an arena for Bellevue, but no plan materialized. In 2012, Ballmer emerged as the main investor behind a group fronted by entrepreneur Chris Hansen touting a $490 million arena for the city’s Sodo District.

Local retailers Erik and Peter Nordstrom and former Sonics executive Wally Walker were also in the group. 

Hansen, who’d grown up a die-hard Sonics fan in Seattle before taking his flourishing hedge-fund business to San Francisco, bought up Sodo land in anticipation of building an arena and surrounding entertainment district. Ballmer was to help foot the cost for the arena and NBA tenant. 

There was also talk of a possible NHL tenant team, which whet that league’s appetite. 

The group snagged a five-year memorandum of understanding negotiated by then-Seattle Mayor Mike McGinn and King County executive Dow Constantine that granted Hansen local arena rights and included using KeyArena as a temporary NBA facility.

It also offered Hansen up to $200 million in city and county bond funding if he could secure an NBA team. 

And, as lawyers would later spend untold hours clarifying, it had an exclusivity arrangement that prevented rival arena offers from being considered during the five-year period. At first, that exclusivity seemed irrelevant as Hansen’s group eyed the NBA’s Sacramento Kings, whose owners threatened to move to Seattle unless their own public-funded arena got built.

But the NBA quashed any relocation attempt in May 2013. Hansen, meanwhile, appeared to anger the NBA by secretly funding a group campaigning against keeping the Kings in Sacramento.

Just weeks after the NBA killed the Kings relocation, a Connecticut-based investment banker named Ray Bartoszek showed up in Glendale, Arizona, threatening to buy the NHL’s Phoenix Coyotes and move them to Seattle — playing temporarily at KeyArena until a better venue materialized.

The Coyotes’ owners and the Glendale City Council had been battling over lease terms at a municipally owned arena. The council opposed a team-favorable lease, but then Bartoszek spooked the politicos, and the vote swung to keep the Coyotes.

McGinn later told The Seattle Times: “Most people don’t realize how close we were to actually getting an NHL team.” 

NHL commissioner Gary Bettman next visited new Seattle Mayor Ed Murray in May 2014, bringing with him potential Seattle hockey owner Victor Coleman, head of Hudson Pacific Properties, who’d wondered about jump-starting the Sodo plan or pursuing a KeyArena alternative.

“They wanted to explore the possibility of opening the (deal) so a hockey team would go first,” Murray said at the time.

But Murray let them know Hansen had exclusivity on the Sodo Arena through November 2017 and only an NBA team, not an NHL squad, would trigger the $200 million in public funding to start that project. 

Weeks later, Ballmer left Hansen’s group to purchase the Los Angeles Clippers for a stunning $2 billion. Of abandoning the Seattle effort, Ballmer said: “If you have a team, it’s easier to get an arena. If you have an arena, it’s easier to get a team. That’s an unfortunate fact.’’ 

Ballmer’s pricey Clippers purchase raised eyebrows among Seattle politicians over why Hansen’s group needed a $200 million public handout. Also, they wondered whether Hansen had enough “juice” with the NBA to land a team.

By early 2015, with the frustrated NHL wanting to expand to Seattle and Las Vegas but blocked by Hansen’s deal, two rival suburban arena proposals suddenly appeared, headed by men with longstanding league ties.

One was for Tukwila, headed by former would-be Coyotes owner Bartoszek from two years prior. The other, more secretive, group had proposed a Bellevue arena and was headed by longtime NHL and NBA “power broker” Jac Sperling.

But neither group ended up bidding for an NHL expansion team by a July 2015 deadline — Hansen’s group also declined to bid — and both ceased operations soon after. Whether Bartoszek and Sperling were merely NHL plants trying to pressure the city to resolve the Sodo impasse remains unclear.

The NHL, exasperated with the Sodo situation, awarded just a lone expansion team to Las Vegas in 2015. By the following spring, Murray pressured the city council to vote on awarding Hansen crucial access to a street that ran straight through his arena site.

Without that strip of Occidental Avenue South, the Sodo project was effectively dead.

The council didn’t want to vote, knowing Hansen had no NBA team and commissioner Adam Silver warned that none was coming. They worried approving Hansen’s plan meant waiting years for an arena that wouldn’t get built. But Murray knew there were groups interested in renovating KeyArena and forced the issue.

And in May 2016, the council voted 5-4 against granting Hansen the street. Within months, Murray persuaded Hansen to relinquish his exclusivity.

Almost immediately, Tim Leiweke and his new Oak View Group (OVG) company showed up, offering to overhaul KeyArena first to later attract NHL and NBA teams. 

“Our belief is, you’ve got to have a real building and a real vision, and it has to be coming up and out of the ground and a reality,” Leiweke said.

Coleman, the would-be owner that Bettman had brought to town two years prior, also jumped into the bidding alongside the powerhouse Anschutz Entertainment Group, forming a “Seattle Partners” combo. 

OVG and Seattle Partners squared off in spring 2017 for the city contract to renovate KeyArena into a major NHL and NBA facility. OVG prevailed, and by year’s end the NHL granted Leiweke’s recruited hockey owners, David Bonderman and Jerry Bruckheimer, permission to apply for an expansion team.

Today, OVG has delivered Climate Pledge Arena and the NHL’s Kraken, and it hopes the revived NBA Sonics appear within a few years. 

As for the City of Seattle: It has a new major sports arena, on a grander scale than envisioned, without sacrificing public-funded KeyArena to a rival venue or spending additional local taxpayer dollars to give it a long-needed transformation.