September 23, 2007
Sonics file to break lease; new arena plans afoot?
Seattle Sonics owner Clay Bennett, last heard from when he said he didn't want his move threats to upstage the start of his NBA team's season, is back to playing hardball again: On Friday, Bennett filed for arbitration to get out of his KeyArena lease, and again threatened to ask the NBA for approval to relocate after October 31.
In his arbitration filing (see the PDF here), Bennett repeatedly calls the KeyArena, which was completely rebuilt in 1994, "economically obsolete," which is sports-owner code for "we can't make enough money there." (Indeed, the team's main complaint about the arena is that much of the luxury-seat and naming-rights revenue goes to the city, to pay off the bonds from the last renovation.) The filing states that the team will "make whole" the city by continuing to pay rent through 2010, but should not be bound to play there after this season.
Seattle Mayor Greg Nickels, who has promised to hold the Sonics to their lease, fired back with a statement of his own: "There have always been sensible options available to Mr. Bennett if he wanted to keep the Sonics and Storm at KeyArena. Today's actions make it clear that has never been his intention. My door has been open, is open and remains open to Mr. Bennett, but he has refused to meet. Typically, people acting in good faith engage in a conversation before seeking arbitration."
The Seattle city council previously voted unanimously to refuse any lease buyout offer, believing that a "specific performance" clause in the lease forces the Sonics to remain until 2010. Bennett's arbitration filing insists otherwise, but this is why they pay the arbitrators the big bucks.
And speaking of big bucks, there's a new plan to build a new arena for the Sonics, with an unlikely champion: Chris Van Dyk, the Citizens for More Important Things founder who's been the primary opponent of a new publicly subsidized arena, has joined with Brian Robinson of Save Our Sonics for a new scheme that, they say, can meet the Sonics' demands without slamming taxpayers. As the Seattle Post-Intelligencer describes the plan:
The odd couple's grand plan is built around construction of a huge underground parking facility at the site of outmoded Memorial Stadium. The Seattle School District stadium would then be rebuilt on top of that structure, its outer wall consisting of nicely architectured offices or apartment units that could be leased to help pay off bonds on the entire project.
Parking revenues and a regional transit center, tied into an improved monorail, also would foot part of the bill. By Van Dyk's estimate, such a massive Seattle Center remodel could be accomplished for something in the $1 billion range. He figures the Legislature would kick in the $250 million in tax extensions the Sonics were pursuing for a Renton arena, since that money now would be earmarked for wider use.
He'd like Sonics ownership, whether Clay Bennett or a local buyer, to chip in another $150 million. And if the bond money from office and apartment leases adds up right, voila, the region has solved both its Seattle Center problem and Sonics' conundrum in one fell swoop.
If this sounds suspiciously free-lunchy to you, you're not alone. First off, $250 million in state tax money is still a public subsidy, even if it's a more palatable one when it's for a multi-use project instead of just a Sonics arena. And even if the revenues from apartment and office rentals are enough to pay off the balance of the arena costs - Seattle Deputy Mayor Tim Ceis called the plan's revenue assumptions "pretty unrealistic" - they would still represent a public subsidy, since that's money that the city could otherwise be using on, well, more important things instead of giving it to the Sonics.
In an e-mail to Field of Schemes, Van Dyk doesn't deny that taxpayers will be on the hook for part of the arena, but says the public benefits of the deal would make it worth it. He also notes that, though the P-I didn't mention it, in addition to the Sonics paying $150 million up front he'd have naming rights fees and half of luxury suite revenues go toward paying off the public's share of the new arena - something that's not likely to make Bennett happy, since those moneys are the main reason he wants a new building in the first place.
"It's like making stew, and asking who paid for the carrots, and who paid for the turnips," writes Van Dyk. "At least this way, we diminish what we pay for turnips (I don't like turnips), and get much more out of it. One could argue, we are only paying for the public portions of the entire project - and we are leveraging the Sonics contribution for the rest." Or, one could argue, Van Dyk is agreeing to endorse a (diminished) public subsidy of the Sonics arena, in exchange for getting a share of the boodle to jump-start redevelopment at Seattle Center. For him, it's enough to give the stew a balanced taste. Whether it will appeal to the palates of either Bennett or the city -or, if they get a chance to chime in, Seattle residents - remains to be seen.
—Neil deMause
The question is 'Why do turnips keep appearing on the menu?' when restaurant patrons have shown again and again that they don't want to pay for turnips, period. Adding turnips to a blueplate special of meat and potatoes doesn't reduce the price of turnips, it increases the cost of the desirable meat and potatos by subsidizing turnip sales, again against the wishes of the restaurant patrons.
Posted by joejoejoe on September 24, 2007 08:30 PM