Oklahoma's Sonics offer gets sweeter all the time
A day after Washington legislators refused — for the fourth straight year — to authorize taxes for a Sonics arena upgrade, Oklahoma...
Seattle Times staff reporter
What Washington is not offering
The Washington Legislature this week took no action on a proposal by Microsoft CEO Steve Ballmer and a group of investors to pay half of a $300 million expansion of KeyArena if taxpayers would cover the rest.
Last year, the Legislature rejected a proposal by Sonics owner Clay Bennett for a $500 million Renton arena. Bennett had offered to put up $100 million.
What Oklahoma is offeringThe Oklahoma Legislature is working on unspecified tax breaks, perhaps under a state law that gives rebates to companies that create jobs.
A 15-year arena lease with favorable terms, including an option to leave after six years if ticket sales don't measure up.
An already-approved $121 million in sales taxes to renovate the Ford Center and build a new NBA practice facility.
A day after Washington legislators refused — for the fourth straight year — to authorize taxes for a Sonics arena upgrade, Oklahoma politicians said they're working on tax breaks and an arena lease in anticipation of the team's arrival.
Oklahoma City Manager Jim Couch held a news conference Friday to outline terms of a proposed 15-year lease for the Sonics to play at the city's Ford Center arena. And state legislative leaders said they'll offer a bill to provide tax incentives for the Sonics if they relocate.
Those announcements were aimed at the NBA Board of Governors, which meets next month to vote on Sonics owner Clay Bennett's request to move the team to Oklahoma City, his hometown.
The Sonics still have a lease at KeyArena through September 2010 and the team is locked in a federal lawsuit with Seattle over whether it can leave before then. Trial is set for June.
Oklahoma City officials said their proposed Sonics lease would start as early as July 1 of this year or as late as 2010 — depending on the outcome of the Seattle case.
As Oklahoma officials move forward, aides to Seattle Mayor Greg Nickels are scrambling to find a "Plan B" to fund a $300 million KeyArena expansion they hope could persuade the NBA to stay.
Bennett has repeatedly said the Sonics are not for sale. But private investors led by Microsoft CEO Steve Ballmer recently said they'd like to buy the Sonics or another team, and offered $150 million toward the KeyArena project if taxpayers would cover the rest.
Nickels has said Seattle would pledge $75 million through admissions taxes and lease payments at KeyArena. The remaining $75 million was supposed to come from King County taxes on restaurants and car rentals currently paying the debt on Safeco Field. But the Washington Legislature adjourned Thursday without authorizing King County to use those taxes.
Seattle Deputy Mayor Tim Ceis called the latest actions by Oklahoma politicians "rather presumptuous," but acknowledged the inaction by lawmakers here may leave Seattle without a decent counteroffer to bring to the NBA.
Ceis said local hoteliers and convention center representatives have contacted the city, offering ideas to make up the $75 million funding gap, but he would not go into details.
"I can't guarantee a result. I don't even know if the odds are very good, but we're going to give it our best shot," Ceis said.
Ballmer's group has said its offer will expire by April 10. The NBA Board of Governors meets April 17-18.
Gov. Christine Gregoire and state legislators have suggested Seattle could temporarily tap its own budget for KeyArena while the state appoints a task force to consider funding next year. But Ceis argued additional city funding for the arena isn't an option because money is needed for services such as police and libraries.
Gregoire said the Ballmer proposal had helped the cause of keeping the NBA in Washington state even though lawmakers did not act on it.
"I actually don't believe nothing came of it. I really believe that when that group came forward, it put a completely different perspective on it," said Gregoire. "So I actually think progress was made toward retaining an NBA team in Washington state."
Gregoire and some other political leaders have said they're unsure if that team will be the Sonics. Some suggest the most likely outcome is that Bennett takes the current roster to Oklahoma City while Seattle tries to cut a deal with the NBA to retain the team's name and history in the hopes of landing another franchise.
King County Executive Ron Sims said recently the Sonics are "gone" and local leaders should adopt the "Cleveland Browns" strategy to keep the name of the team here.
Metropolitan King County Councilmember Pete von Reichbauer agreed, and suggested Friday that Seattle officials and fans should lay off the criticism of Bennett and the NBA.
"Piling on the current ownership, the current commissioner and the current Board of Governors is not going to be helpful to our long-term best interests," von Reichbauer said.
Meanwhile, in Oklahoma City, political leaders have proved decisive in their recent actions to lure the Sonics.
Oklahoma State Senate Co-President Pro Tem Glenn Coffee, R-Oklahoma City, said he'll sponsor a bill offering tax breaks if the team moves.
"I don't have the language yet, but we're working on it," Coffee said. "In general, there are some costs to relocating the Sonics to Oklahoma City."
Coffee said the incentive would likely resemble the state's Quality Jobs Act, which gives rebates to companies for creating jobs, and the cost would be recovered when the Sonics and their opponents pay income taxes for games played in Oklahoma.
Democratic Senate leader Mike Morgan of Stillwater and House Speaker Chris Benge, R-Tulsa, have also been involved in discussions with Coffee. The lawmakers said the Sonics approached them about enacting the tax breaks.
Oklahoma City voters last month approved a temporary 1 cent sales tax to raise $121 million for upgrades to the Ford Center and construction of an NBA practice facility.
Bennett's ownership group has not been asked to contribute any money toward that project. The team would receive most of the cash generated by the renovated arena under lease terms spelled out by Bennett in a 16-page letter of intent to Oklahoma City Mayor Mick Cornett. The city would pay the arena's operating expenses.
The Sonics would pay annual rent of $1.6 million for the arena, and $100,000 for the practice facility, increasing the payment with inflation. The city also would receive more than $400,000 a year for arena naming rights, with the team getting any cash above that when an expected new naming-rights deal is struck.
The Sonics could break the agreement after six years if ticket sales fall below certain benchmarks.
The Sonics' current KeyArena lease with the city of Seattle, which began in 1995, requires the team to pay about $1 million a year in rent and to split other NBA game revenues from suites and concessions with the city. In all, the Sonics pay the city roughly $7 million to $9 million a year — a sore point for successive team owners who have complained that the lease compares unfavorably with those of most other NBA teams.
Bennett, who wanted a $500 million arena in Renton to keep the Sonics in Washington state, issued a statement praising the proposed lease deal in Oklahoma City as "a fair arrangement for all involved" that would be "viewed favorably by the NBA as another key part of the relocation process."
The lease would begin as early as July 1, 2008, or as late as July 1, 2010, depending on the outcome of a federal lawsuit between Seattle and the Sonics over the team's KeyArena lease. The lawsuit, filed by Seattle officials, seeks to enforce the KeyArena lease through 2010. Bennett is seeking to leave as early as this fall in exchange for a cash settlement. Couch said Oklahoma City expects to break even or make a small profit on the lease.
"We think this is a very solid deal for the citizens of Oklahoma City," he said.
Material from The Associated Press and Seattle Times Staff Reporter Ralph Thomas was included in this report.
Jim Brunner: 206-515-5628 or email@example.com
Copyright © 2008 The Seattle Times Company
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