City rips Stern for ‘publicity stunt’

21 02 2008

NBA commissioner considers Sonics’ move inevitable

By GARY WASHBURN
P-I REPORTER

NEW ORLEANS — City of Seattle officials lashed out at NBA commissioner David Stern late Saturday after Stern said the Sonics’ move to Oklahoma City is inevitable.

“I clearly see this as a publicity stunt by Mr. Stern, nothing else,” Deputy Mayor Tim Ceis said. “I’m optimistic that we have a strong case in court and we’ll be in front of a federal judge to argue it.”

Speaking during his annual state-of-the-league news conference at the All-Star Game, Stern also revealed the Sonics ownership group, at Stern’s urging, offered a payment of $26.5 million to buy out the final two years of its KeyArena lease and pay the remaining bond debt on the building.

The city quickly rejected the offer, appearing content to sue the Professional Basketball Club to hold the Sonics to the lease. The sides have a June 16 trial date to determine whether the Sonics will be bound to KeyArena through the 2009-10 season.

Ceis and Marty McOmber, spokesman for Mayor Greg Nickels, both criticized Stern for using a public forum to drum up support for relocation.

“It’s quite clear that the NBA no longer seems to want to honor the contracts they sign with cities,” Ceis said. “So we’ll have to have a federal court enforce that. If Mr. Stern thinks this lease is for sale, that’s not the case.”

McOmber suggested Stern is trying to drive an irreparable wedge between the team and city.

“It’s completely inappropriate for Mr. Stern to be revealing conversations between lawyers, period,” McOmber said. “Any offer that has been made was completely inadequate to cover the loss and damages as a result of losing the Seattle Sonics. This is apparently some collusion by David Stern and Clay Bennett to hijack this team and take them to Oklahoma City. They have a lease until 2010 and we are going to hold them to that lease. We have every intention on doing that.”

Bennett’s group purchased the Sonics for $350 million in July 2006. Its proposal to build a $500 million arena in Renton, financed largely with public funds, never gained traction. In September, Bennett sought arbitration to escape the lease and move the team. The city then sued.

“It’s apparent to all who are watching that the Sonics are heading out of Seattle,” Stern said. “There’s not going to be a new arena. There’s not going to be a public contribution, and that’s everyone’s right. I mean that sincerely. So the only question now becomes, is the court going to rule that you can fulfill the terms of the lease by paying money for the remaining two years after this? Or, despite everything, there is some reason to keep them there as the clock winds down.

“All I can tell you is that in response to that request by me, the (buyout) offer was made, and it was rejected. I think it’s bad public policy.”

The city is still paying off the bond on the 1995 refurbishing of KeyArena and that debt will remain for several years. Stern’s revelation marked the first time it has been publicly stated that Bennett’s group offered to pay anything beyond the final two years of the lease.

Neither Ceis nor McOmber would confirm Bennett’s offer, but a document obtained by the Seattle P-I shows an offer indeed was made.

A letter from the law offices of McAfee & Taft dated Feb. 14 was submitted to Seattle city attorney Thomas Carr, highlighting the three scenarios of the court case. In statement No. 5 of the letter, the Professional Basketball Club makes the offer: “The third scenario is a settlement. PBC is willing to offer a one-time payment to the City that will (a) satisfy the anticipated rental revenue sharing payments and admissions taxes of the final two years of the KeyArena lease and; (b) provide the City sufficient funds to pay the $26.5 million principal due on the KeyArena debt as it matures.”

The letter then states that Professional Basketball Club will offer the city a payment of $7,265,286 to cover the final two years of rent at KeyArena and a payment of $19,305,766 to cover the current estimated bond due for previous repairs. The Bennett group offers the city a total of $26,571,052 for the rights to move the team to Oklahoma City next season. The letter gives the city one day — Feb. 15 — to respond to the offer. It apparently was rejected within that span of time.

Ceis said the Bennett group has withheld “important documents” as the sides prepare for trial. Many observers believe the city has a good case against the Sonics, who will be forced to stay until 2010 unless a settlement is reached. A settlement now appears highly unlikely.

“No, we’re not interested in anything Mr. Stern has to say. Our discussions are directly with Mr. Bennett and his attorneys,” Ceis said. “I think Mr. Stern has been hurting the situation for many months now with his statements in the public. We have yet to have one conversation directly with Mr. Stern about the status of the Sonics in Seattle. Instead he chooses to hold press conferences and make pronouncements instead of trying to work with the city to come to a resolution.”

Stern expressed disappointment in the city’s decision to delay relocation.

“I feel actually badly that the team, when it leaves either now or in two years, is going to leave behind an unpaid debt which the city has,” he said during his 44-minute news conference. “The city’s still going to have a debt on the building. And the Sonics have offered to pay it off. The city says no, and so we’ll see.

“But I don’t feel uncomfortable. We know how to observe court orders and we do a pretty good job of that. So if the court says they’re not free to just pay and leave, then they won’t just pay and leave. But if they are, then they’ll be gone and there will be two years of payment, and the city will not have the benefit of the $30 million or so and other things that would be worked on if there were an amicable solution to that.”

Stern said he believes the city’s reluctance to publicly finance a new arena has nothing to do with disdain for Bennett, who has done little to camouflage his desire to move the Sonics to his native Oklahoma. Sonics co-owner Aubrey McClendon told the Oklahoma City Journal Record in August that the group purchased the Sonics for the express purpose of relocating them to Oklahoma City. The NBA fined McClendon $250,000 for those statements.

“They’re equal opportunity deniers of aid,” Stern said of Seattle city officials. “Howard Schultz, who was a resident of Seattle, who owned the team previously, who invested time and energy leading lobbying efforts at the city council, at the county level and at the state level, was unsuccessful.

“Clay Bennett actually spent more money, developed more plans, made more visits, and the answer was no, no, a thousand times no.”

Stern pointed to comments by Speaker of the House Frank Chopp, who said the state would be open to extending an existing tax to fund a refurbishing of Husky Stadium. Bennett asked for a similar extension for the Renton arena project and the Legislature refused to hear his proposal last winter.

“Indeed, even recently as I read the newspaper occasionally,” Stern said, “the speaker of the house was heard to say that if the university wanted a new stadium, that was certainly a good reason to consider extending the tax that helped build the baseball and football stadiums, but certainly not for the Sonics. And into that sort of wind, it doesn’t make a lot of sense to sail.”

The NBA Board of Governors is scheduled to meet April 17-18 to discuss possible relocation. Bennett’s application could be approved well before the trial date, contingent on a court settlement that would allow a departure from the lease.

“Right now, we are in court enforcing the lease we have with the Seattle Sonics team,” Ceis said. “That’s what we will continue to do. What Mr. Stern says really doesn’t matter.”

Asked if he was convinced the Sonics would leave Seattle after 40-plus years and one NBA title, Stern seemed resigned to their fate.

“I see nothing — I don’t know why anyone would expect in the absence of what they’ve been saying all along, which is funding for a new building of some kind and a plan for it that they would be staying,” he said. “I accept that inevitability at this point. There is no miracle here.”