OVG Baltimore Arena deal ‘bid’-by-‘bid’



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Baltimore Arena re-development OVG Image: Oak View Group (LinkedIn)

New operators of the Baltimore Arena (US) – the Oak View Group (OVG) – have wasted no time starting on a $150 million renovation of the building – and the general public is invited to watch their progress.

The ‘Baltimore Fishbowl’ stated that shortly after the Central Intercollegiate Athletic Association (CIAA) Men’s and Women’s Basketball Tournaments ended at the arena in late February, the Oak View Group (OVG) and its partners began working to transform the 60-year-old building at 201 W. Baltimore St. in Baltimore, Maryland, US.

The Royal Farms Arena (Baltimore Arena) is an arena located in Baltimore, US. The Arena is located about a block away from the Baltimore Convention Center on the corner of Baltimore Street and Hopkins Place. It is also only a short distance from the Inner Harbor. It seats 11,100 and can be expanded up to 14,000, depending upon the event.

Los Angeles (US)-based Oak View Group (OVG) is a global sports and entertainment company that was founded in 2015 by Tim Leiweke and Irving Azoff, each with more than 30 years of experience in the sports and entertainment business.

Leiweke served as President and head honcho of AEG, one of the world’s largest venue management and entertainment companies, and was responsible for more than 100 facilities. Azoff has had a distinguished music career and served as President and Chief Executive Officer (CEO) of Ticketmaster.

The Central Intercollegiate Athletic Association (CIAA) is a collegiate athletic conference, mostly consisting of historically Black colleges and universities. CIAA institutions affiliate at the Division II level of the National Collegiate Athletic Association (NCAA).

The ‘Baltimore Fishbowl’ further stated that the work includes adding seats and suites, refurbishing concourses, upgrading concessions areas, and changing the building’s appearance – all part of a plan to book “top tier” events and draw more people downtown to see them.

Signs of activity are visible outside the arena, where a construction fence is up and a section of the exterior wall has been removed to help bring materials in and out.

Commented Colin Tarbert, President and CEO of the Baltimore Development Corporation (BDC), which led the search for a development team, “Work has commenced on the project as planned.”

The general contractor, Clark Construction Group, has installed a 24-hour OxBlue construction camera inside the building to let anyone follow its progress. The camera currently shows demolition work on the stage area.

Oak View Group of Los Angeles was selected last year over two other bidders that sought the opportunity to renovate and operate the arena. An equity investor on Oak View’s team is Thirty Five Ventures, founded by Rich Kleiman and Kevin Durant. Durant is an All Star forward with the National Basketball Association (NBA) team Brooklyn Nets who was born in Washington, D.C. and grew up in Prince George’s County.

The Oak View Group has agreed to pay for all capital improvements, without funding assistance from the City. SCI Architects is the lead designer.

The team has a strict deadline to complete its improvements because the CIAA tournaments are scheduled to return to the Arena next February and the Oak View Group has promised it will be ready. Next year’s event is scheduled to begin on February 20th, 2023, giving contractors less than 12 months to finish their work.

The scope of work entails major changes to the interior of the arena, the exterior and the area around it. The architects have suggested a maritime theme for the exterior, with sail-like shapes added to the North and East sides as a reminder that Baltimore is a port City.

The main entrance will remain at the corner of Baltimore Street and Hopkins Place, with two additional entrances on Baltimore Street. The number of seats will increase about 10-15 percent, from about 14,000 for concerts now to about 16,000 when work is complete. The parking lot on the Hopkins Place side of the building will be turned into a pedestrian plaza that can support festivals and other outdoor events.

City officials express optimism that the development team can stay on schedule. Tarbert acknowledged at a real estate conference in December last year that the schedule is tight but said he believes it’s “Realistic. It can be done in one year. It’s super aggressive, but we think we can do it.”

Tarbert said at the real estate conference that he believes Oak View Group and Thirty Five Ventures may end up investing even more than $150 million: “It probably will be closer to $200 million when we’re done.”

And because of the new seating and other amenities the team has proposed, he added, “You won’t realize that you’re in an arena that was built in 1961…That’s a really exciting, catalytic project that we’ve been trying to figure out for over 20 years now.”

Baltimore’s Board of Estimates voted four to one in November 2021 to approve an agreement that allows the Oak View Group to lease, renovate and manage the arena for 30 years. According to the BDC, the Oak View Group and Thirty Five Ventures have committed to achieving 45 percent minority and women-owned business participation during construction and maintaining that participation rate through ongoing operations.

In addition, the BDC said, the Oak View Group has pledged to use “reasonable good faith efforts” to allow the opportunity for at least 25 percent of the equity investment in the project to be made by minority and women investors. Clark, the general contractor, has pledged to prioritize the hiring of Baltimore City residents and provide pre-apprenticeships and apprenticeship programs, the BDC noted.
 

Rewind

 

‘Reimagine, redevelop, reposition’

The BDC issued a Request for Proposals (RFP) from developers interested in renovating the Arena on November 25th, 2020, and set February 25th, 2021 as the deadline for bids.

In its RFP, the BDC said its goals were to: “Reimagine, redevelop and reposition” the Arena in its current location, maximize direct and indirect economic benefits of the Arena to the City, activate street-level façades “to the greatest extent possible”, support the convention center operations and the broader tourism industry, achieve the highest quality of architectural exterior/interior design and best construction practices, maximize the property as a catalyst for investment in the surrounding downtown area, and provide employment and training opportunities for Baltimore City residents. It also wanted the project’s architect to have demonstrated “design excellence”, especially in the field of entertainment venue design.

The RFP stated, “Our goal is to create a major transformation of the existing Arena into a first-class, modern, entertainment, and event venue through either renovation or new construction. Only proposals for the City-owned property bounded by Baltimore, Howard and Lombard streets and Hopkins Plaza will be accepted. Alternative sites for the redevelopment of the Arena will not be reviewed.”
 

Competing bidders

A second bid was submitted by a local team headed by WMC Metropolitan Investors and ASM Global (the world’s leading venue management and services company based in Los Angeles, US).

The ASM Global, headed by Chairman and CEO Bob Newman, has operated the Baltimore Arena for the City since 1999 and the MECU Pavilion on Pier 6, in partnership with the BDC, since 2017.

Metropolitan and ASM Global assembled a Who’s Who team of local companies that have national expertise in sports and entertainment architecture, retail design, landscape architecture, and urban design.

The Metropolitan/ASM Global team also included the Baltimore office of Gensler, one of the country’s largest design firms.

A third bid was submitted by Spectra, a Philadelphia-based management company that specializes in live events and entertainment. In August 2021, Oak View and Spectra announced plans to merge, effectively taking Spectra out of the running as an independent bidder for the Baltimore project.
 

Comparing the bidders

In their responses to the City’s RFP, the two remaining bidders both proposed to renovate the arena without relying on public funds, increase the number of seats and meet a demanding construction schedule. Both also pledged to hire a substantial percentage of minority- and women-owned businesses during the construction period and beyond.

The bid from Metropolitan and ASM Global went into great detail about how team members would improve the exterior of the Arena and revitalize the area around it, while also upgrading the interior by widening concourses, adding seats and making other improvements.

The main concept in assembling a team to redevelop the Arena was to combine “global resources with local expertise”, Metropolitan and ASM Global said in their proposal.

The proposal further read, “As you read through our proposal, please take notice of one overriding theme – WE ARE BALTIMORE. The team that we have assembled to undertake the redevelopment of this iconic venue is proudly and deeply rooted in Baltimore. Our team comprises members who collectively have hundreds of years of experience providing Baltimoreans great live entertainment and sports experiences, places to live, work and play, and public spaces that captivate.”
 

OVG edge

In a news release following the Board of Estimates vote, the BDC listed several reasons for recommending Oak View Group’s bid over the one from Metropolitan and ASM Global, including the partnership with Durant and the team’s commitment to employing minority business enterprises (MBEs) and women business enterprises (WBEs).

The BDC release stated, “The City awarded an Exclusive Negotiating Privilege to OVG in June to negotiate a lease and management agreement for the Baltimore Arena, largely due to its proposal offering a significant investment to redevelop the Baltimore Arena, delivering an aggressive timeline for redevelopment, and demonstrating a substantial commitment to MBE/WBE participation (not only in construction, but also during operations) and local involvement throughout the project and operation of the Baltimore Arena. Importantly, the OVG is also committed to substantial minority participation in the equity ownership of the project, including by National Basketball Association (NBA) superstar and Maryland’s own, Kevin Durant.”

Design was a factor too, the BDC said.

According to its release, “OVG and Thirty Five Ventures’ proposed design will balance the historical significance of the Arena with contemporary interior and exterior features such as glass, brand elements, lighting, and signage -creating a warm and local feel with modern aesthetics. The new exterior will include dramatic façades, improved signage and branding opportunities while activating Hopkins Plaza and connecting to the surrounding neighborhood. The new interior will include contemporary seating, enhanced suites, food and beverage amenities, and a reimagined concourse.”

In the BDC release, Mayor of Baltimore, Brandon Scott, stressed Oak View Group’s commitment to hiring minority- and women-owned businesses – “I am extremely excited to see the transformation of the Baltimore Arena move forward with such an experienced team that is also committed to substantial minority and women business participation. A new state-of-the-art entertainment facility will not only continue to attract top-tier national events and live entertainment, but further catalyze development on the West Side of downtown. The Baltimore Arena is “a major anchor in our efforts to drive further investment and development in the Bromo Arts & Entertainment District. I am glad that our efforts have attracted the caliber and talent of a team like Oak View Group and Thirty Five Ventures to help realize a…long-sought goal.”
 

Leiweke view

Leiweke said in a statement, “The OVG team is committed to bringing to Baltimore a state-of-the-art venue that will help reimagine and develop the proposed arena for the local community. Both OVG and our partners, Thirty Five Ventures, look forward to working with strong minority and women-owned businesses during both construction and through ongoing management to present the very best of live entertainment.”

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