April 17, 2007
WA legislature says no to Sonics funds
As expected, the Washington state legislature decided yesterday to drop consideration of a bill to provide the Seattle Sonics with $300 million in funding for a new arena, after a meeting of legislative leaders showed it didn't have enough support to pass. "We are not going to vote on anything this session," announced House Majority Leader Lynn Kessler last night.
The big question now: Does Sonics owner Clayton Bennett come back next year with another arena plan, or does he pack up the team and relocate, likely to his hometown of Oklahoma City? Bennett certainly hinted at the latter, saying in a statement, "Clearly at this time the Sonics and Storm have little hope of remaining in the Puget Sound region." According to Bennett's purchase agreement for the team, he can decide starting November 1 to move the team for the 2008-09 season (a Sonics spokesperson called it a "deadline," but it's not really), but it could cost him a bundle to do so, since his lease runs through 2010. Seattle finance director Dwight Dively told the Seattle Post-Intelligencer that the city would "demand substantial financial damages," including not only lost rent payments for the additional two years, but the loss of tax revenues from fan spending before and after games - bringing up the ironic possibility of the Sonics' own inflated economic impact figures being used against them in lease settlement negotiations.
Add in that the Oklahoma City metro area is only about a third the size of Seattle, and a Sonics move may not be quite as imminent as Bennett would like you to believe. I'll be surprised if there isn't at least one more last-ditch effort to extract arena funds from Washington state - or perhaps King County, a la the Minnesota Twins model - before the moving vans start backing up to KeyArena.
"According to Bennett's purchase agreement for the team, he can decide starting November 1 to move the team for the 2008-09 season..."
I keep reading that. Purchase agreement with whom? With the prior owners or with the NBA? Neither of those two entities has the authority to let him out of the Sonics' current lease, so what does that November 1 date even mean?
Posted by: Matthew on April 18, 2007 05:19 AM
November 1 is one year from when Bennett officially took ownership of the team, so presumably he promised to wait that long before moving when he bought the Sonics. That still doesn't let him out of his lease, though, you're right.
Posted by: Neil on April 18, 2007 10:09 AM
OK. Clearly the threat of relocation is a common tactic of team owners. But as I understand this situation, Bennett and his pals are not the usual team owners. As a former owner of a Texas NBA team and someone who has been trying to secure OKC its own team (especially relevant now that the successful Oklahoma Hornets experiment appears to have concluded), aren't his relocation threats a little different? Like its been his plan all along? Especially considering this tidbit from The Stranger's Josh Feit: http://slog.thestranger.com/2007/04/theres_hope_for_the_sonics_lobbying_101
Posted by: Elliott on April 18, 2007 03:16 PM
It's certainly possible - now Bennett can go to the NBA and say, "See, we tried." I still don't see it making sense to buy a franchise at Seattle prices and then move it to a much smaller market, but if Bennett is more interested in having a team he can drive to home games for, then maybe.
On the other hand, lots of people were saying the Maloofs' half-hearted attempts at a new arena in Sacramento were just a stalking horse for a move to Las Vegas (where they have business interests) or Anaheim, and those haven't happened yet. I think it's easy to forget how much fan capital you risk throwing away when you pick up and move to a new town.
Posted by: Neil on April 18, 2007 06:07 PM
There is also the not so small matter of the some $50 million in debt still left over from the previous KeyArena renovation, done at the behest of the Sonics, and which Seattle will be on the hook for if the Sonics break their lease. The City sold bonds to finance the previous renovation on the assurance from the Sonics that the whole deal would be revenue neutral for the City, but instead the City has already lost millions, as the Sonics' own overly optimistic revenue projections failed to materialize. If the Sonics do break the lease, expect the City to sue them not only for lost rent and other revenues, but for payment of part or all the $50 million in outstanding debt on KeyArena, as well.
