Seattle PI: A new NBA team here?

"The reality for the city, Hunter, Chris Gregoire, Rossi, Seattle Mayor Greg Nickels, and Brian Robinson, is that the first NBA season without the Sonics in Seattle is Tuesday, October 28th, one full week before election day. This is in time to be right in front of the majority citizens that vote by mail.

The first NBA preseason game is October 5th (I had to look it up). The sports columnists, reporters, journalists, bloggers, sports radio, will have nothing much to cover in the two weeks leading up to that because the Seattle Seahawks have a bye week the prior Sunday. That is two weeks without meaningful local NFL coverage. The Seattle Mariners season officially ends September 28th. The NBA, and the missing team story, will fill the hole in the sports section at some point during that period. What else are they going to write about?"

"A new plan to divert a portion of hotel-tax money from the state convention center to a remodel of KeyArena could help Seattle begin pursuing a replacement NBA team as soon as 2010."

"NBA Commissioner David Stern said Thursday "positive" talks have gone on between the league and a potential ownership group headed by Microsoft Chief Executive Steve Ballmer, who led an ill-fated plan to save the Sonics earlier this year."

"Deputy Mayor Tim Ceis confirmed the talks, and said he was optimistic that this time around the city's request for state authorization will meet little resistance when the Legislature convenes in January.

"It should be noncontroversial, because it's a city-only tax that already exists and will not be an increase," Ceis said of the latest attempt to find a long-sought public portion of a proposed $300 million renovation for a building currently deemed financially obsolete by the National Basketball Association.

"If we can get our funding package together this session, we can start to work with the Ballmer group on identifying a team for Seattle, but probably not until 2010."

Stern, speaking to reporters on his annual season-tipoff conference call, made his first public comments on Seattle since the Sonics left.

"I don't want to mislead, so I will say that we have had some contact and we're aware of what's going on," he said. "I'd rather not deal with the specifics of it at this time, but we have had some positive contact."

While no city official has talked to Stern, Ceis said standard procedure always has been for Stern to go through the owner, or potential owner. He confirmed that Stern and Ballmer have talked, and Ballmer conveyed the new funding plan for the public portion of the remodel."

"The tax under consideration is different from the so-called stadium taxes from King County that the Sonics, as well as the University of Washington, pursued in recent sessions to fund their sports building projects.

A 7 percent tax on all hotel bills within the city long has been dedicated to convention center operations. The city, which is still negotiating with the hotel industry and center officials on the proposal, seeks to divert one-tenth of the revenue to Seattle Center and the KeyArena project.

Ceis said that growth in hotel-room rentals over the past 10 years is generating enough revenue for the diversion to produce over a 15-year period the $75 million necessary to finance construction debt without compromising convention center operations."

"The settlement, which paid off the $34 million in construction bond debt remaining from a remodel completed in 1995, included a provision for another $30 million to the city by 2013 if an NBA team had not moved to Seattle. But the city had to have an NBA-ready arena, or the funding committed for one, by Dec. 31, 2009.

For practical purposes, that means the pending session in Olympia will be last chance for any funding requiring state authorization.

Asked why the city didn't come up with this idea while the Sonics were still in town, Ceis said the focus was on finding revenue that didn't require state approval. Even though this revenue still requires a legislative OK, the source is strictly city taxes, not county, and provides an upgrade for a city-owned building that helps draw tourists to city hotels.

"It's the path of least resistance, and there's no competition for the funds," he said.

At the time of the settlement, which was widely criticized as insufficient for the loss of a 41-year civic institution, the city defended itself in part by saying it was necessary to repair the damaged relationship with the NBA in order to have a shot at another team. The $30 million penalty gave the NBA and Bennett a financial incentive to help fill the void.

Ceis said that if the $300 million funding were in hand, the city would firm up the remodel plans that would allow Ballmer to pursue a team. He stressed that the city would not go forward with the remodel until an ownership group secured a team."

"Since the NBA has no current plans to expand domestically, the only option would be to relocate a team from another city.

As many as half the teams in the NBA may have had operating losses last season, and some of the smaller-market teams have been in financial trouble for a while, including Memphis, New Orleans and Milwaukee. The Sacramento Kings also have been stymied in securing public funding for a replacement building for Arco Arena.

Unless a team is at the end of its lease, the Ballmer group would be in the same position Bennett was in Seattle -- an out-of-town owner attempting to pull away a team under contract with its city.

Ceis said that if a team is secured, the city has provisions to do the remodel before arrival, or to work around a six-month NBA regular season.

Matt Griffin, a Seattle real estate developer and Ballmer friend who served as his spokesman in the earlier attempt to save the Sonics, confirmed by phone Thursday night the group's awareness of and interest in the city's new initiative, but said little about the potential pursuit of a team.

"The first thing has to be the funding," he said. "We told the mayor in April that we were interested in keeping KeyArena from becoming a white elephant that drags down Seattle Center and lower Queen Anne.

"We can't take step two before we take step one. Once the funding happens, we can roll up our sleeves and take a look at what needs to be done."

A new NBA team here?
Tax diversion plan could give city the money for KeyArena
By ART THIEL AND GARY WASHBURN
P-I REPORTERS
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