Gregory J. Nickels (former Mayor)
3/6/2008 4:30:00 PM
Mayor Nickels announces local effort to
buy Sonics, renovate KeyArena
Local group will cover half the costs of improving KeyArena
SEATTLE - Mayor Greg Nickels today announced a local effort to buy the Sonics and cover half the $300 million cost to improve KeyArena.
The mayor was joined by former U.S. Sen. Slade Gorton, City Councilmembers Jan Drago, Bruce Harrell and Richard McIver, and King County Councilmember Larry Phillips.
Under the proposal, the local investment group would pay for upgrades that directly benefit a basketball team, while the public investment would cover needed renovations to the public areas and building systems in the city-owned arena.
“KeyArena is owned by the people of Seattle and we will need to invest in it whether basketball remains there or not.” Nickels said. “This proposal is a good deal for people of Seattle because it does more than keep the NBA here, it ensures that KeyArena remains a great place for all of the concerts, shows, and civic events that happen there every year.”
The members of the local ownership group include Microsoft CEO Steve Ballmer, Seattle developer Matt Griffin, Costco CEO Jim Sinegal and wireless magnate John Stanton.
“This is a great opportunity to secure the future of KeyArena and keep NBA basketball here, where it has been a hometown favorite for 40 years,” said Gorton, who was hired by the city to work on keeping the Sonics in Seattle. “With this partnership we have the opportunity for a win-win outcome - improving the Key and keeping our Sonics.”
Under proposed legislation before the State Legislature, the investors would contribute $150 million for improvements to KeyArena that would benefit the team, such as club seating, suites, practice facilities and other upgrades.
Read the draft legislation - Acrobat PDF
The other $150 million would be a public investment to cover improvements to public areas, such as concourses and restrooms, and building systems, such as heating and plumbing. This investment would come from two sources:
- The State Legislature would allocate $75 million from the current taxes on restaurants, bars, and rental cars in King County. This would not require extending the taxes, which expire in 2016. It would use a portion of the money generated after the Safeco Field bonds are paid off.
- The remaining $75 million would come from the city, offset by leases, admission taxes, sales taxes on construction, and the revenue generated at KeyArena.
Because private funds will pay for improvements directly benefiting a basketball team, the proposal meets the requirements of Initiative 91, which limits taxpayer subsidies for a new Sonics arena. Public funds will pay for general building improvements - things the city would have to do anyway to ensure KeyArena remains an exciting and vibrant venue for the region.
“I have always been a supporter of keeping the Sonics in Seattle, but not if it didn’t make economic sense,” McIver said. “This is a strong proposal that will get serious consideration from the City Council. Ultimately, we are on the hook for KeyArena whether there is basketball or not. This would make needed investments that will keep the building working well for years to come.”
The arrangement is contingent on this ownership group’s ability to purchase the Sonics or another NBA team. Basketball accounts for about a quarter of the events in KeyArena. With or without an NBA team, the city of Seattle will still need to make improvements to KeyArena.
“Keeping the Sonics at home in Key Arena is great for fans who have grown up cheering the team, for the vitality of the Uptown business district, and for the dynamic future of Seattle Center and our region,” Phillips said. “A private funding partnership at the Key is welcome news, so long as we're ensuring the public gets full value for their investment.”
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