February 22, 2006

Hoop Screams
Sonics tell city: remodel KeyArena or we’ll move

By CYDNEY GILLIS
Staff Writer

The Seattle SuperSonics have a lot of hungry basketball players to feed. That’s why the team’s owners want to sell more hotdogs, t-shirts, and parking spots at KeyArena.

That way, the team can meet its players’ $53 million annual payroll — and stop losing money, as it has for the past six years.

That’s the idea behind the Sonics’ pitch for a $220-million tax subsidy, which would be used to double the size of the 368,000-square-foot facility at Seattle Center. Though some 500 premium seats would be added, the money would primarily add more parking, club, concession, and retail space, with profits going to the Sonics.

The Legislature turned down a similar request made last year by Mayor Nickels and the team’s owners. But, with the Sonics’ lease at KeyArena set to expire in 2010 — and newly released studies showing a team departure would be a calamity for Seattle Center — the Sonics say time is running out while the Seattle City Council dithers over studying the issue.

In October, the City Council passed a resolution denying the Sonics and the mayor the right to lobby the legislature until the council agrees to a specific plan at KeyArena. As a result, says Terry McLaughlin, vice president of administration for the Sonics and Storm, the franchise isn’t going to make it to the legislature again this year.

In December, Seattle Center staff presented the council with four lower-cost remodel options of $20 million to $140 million. But McLaughlin says that doesn’t matter: If the Sonics don’t get the full $220 million remodel, they’ll have to leave Seattle.

“ We don’t have any choice but to look at other options,” he says.

Two Dec. 19 reports prepared for the mayor’s Seattle Center task force, which began its work in September, show a Sonics departure that would be a disaster for the city, which guaranteed and would have to finish paying a $74-million bond on the KeyArena’s last remodel in 1994.

The city already pays part of the $6.2-million annual debt service because sales of the suites and club seats that were earmarked to pay for KeyArena’s last remodel have been short. In 2004, KeyArena was $1.5 million in the hole. After pulling in $97 million in revenue, the Sonics lost $9.5 million.

In the Dec. 19 reports, consulting firm Convention, Sports & Leisure came up with three business models for operating KeyArena without the Sonics and Storm — a specific request made in the City Council’s October resolution, which was sponsored by Councilmembers Nick Licata and David Della.

If the Sonics go, the consultant notes KeyArena’s event dates would drop from 143 a year to 116 at best. Even in the best of the scenarios, the building’s annual loss of $1.5 million would more than double, to $3.6 million.

Brian Curry, owner of Ten Mercer, a lower Queen Anne restaurant backed by partners who own nearby establishments Floyd’s Place and T.S. McHugh’s, says the three businesses would have a combined loss of $250,000 a year if the Sonics left — not to mention the dozens of jobs that would be lost throughout the neighborhood.

“ In any city that’s lost their sports franchise, it [the arena] does not succeed as a facility,” Curry says.

According to the consultant’s report, that’s not always true: Of 26 arenas the study cites as being abandoned by major-league basketball or hockey teams, 11 were demolished and 10 still operate as arenas, with five of those losing money. (Of the facilities converted to other uses, the report shows the Great Western Forum, where the Los Angeles Lakers once played, is now a church.)

But the three non-Sonics scenarios the report presents for KeyArena — which include keeping the Thunderbirds hockey team as a tenant and adding concerts and events, keeping the T-birds and finding an indoor summer football tenant with more concerts and events, and booking only concerts and events — all rely on minor-league sports and events without considering new options, such as moving Seattle Center’s Fun Forest indoors.

“ I’m not surprised,” Councilmember Nick Licata says of the findings. “What’s missing is that keeping the Sonics adds more debt. To reconfigure KeyArena as an entertainment center would cost less. That’s my impression, and that’s what we need to look at as a solid option.”

With the Sonics able to leave in 2010 and the city on the hook for KeyArena’s debt through 2014, Curry says the team has the upper hand. But, he says, “Where are the Sonics going to go? Who’s going to build them a $500-million arena?”

“ I’ve done straw polls at Ten Mercer and nobody is really behind them,” Curry says of the Sonics getting $220 million in public funds. “It’s not getting any positive response whatsoever.”

Last year, Curry felt the same. Then Sonics managers convinced him that the proposed expansion is about selling more hot dogs and t-shirts — not competing with nearby restaurants for sit-down dining.

Still, Curry and others, including Kent Kammerer, president of the Seattle Neighborhood Coalition, say there’s no call to provide public financing to a team whose majority owner, Starbucks chairman Howard Schultz, has a net worth of $700 million, according to USAToday.

“ You’re looking at some pretty wealthy people there,” Curry says. “If I’m going to spend $30,000 to renovate a [restaurant] dining room, my landlord may help, but I’m going to pay it back.”

“ When players get $50,000 a game,” Kammerer says, “they shouldn’t be getting help from the public.”