By the time the Sonics sale was announced Tuesday, the relationship between Seattle politicians and team owners had so soured that the owners walked away from offers of up to $148 million in public funding to remodel KeyArena.

Seattle Mayor Greg Nickels offered the team three options for a possible arena deal in late May, but got no reply.

"We made very specific and strong offers to the Sonics that would have met the needs of Seattle Center and the team. Unfortunately, they did not respond to those," Nickels said. He learned Tuesday morning that the team had been sold.

It was a fitting end to more than two years of negotiations between local politicians and Sonics owners, a mostly local group of investors led by Starbucks Chairman Howard Schultz. While there were occasional hints along the way that a deal might be reached, more often than not, Sonics owners said they felt unappreciated, and even insulted, by the actions — and inaction — of Seattle's elected officials.

That feeling persisted to the very end: Schultz said Nickels' office had violated his trust by disclosing on Tuesday the city's recent offers to the team.

"I've always believed that when you are negotiating in good faith and you are behind closed doors, you respect the process of confidentiality," Schultz said, refusing to comment on why the team did not respond to the offers. "I think that for the Mayor's Office to release anything today after we made our announcement was just unfortunate."

Schultz added: "We didn't get the respect we believe we deserve" — a sentiment he has repeated several times in recent months.

The relationship didn't start out so strained.

In 2005, Nickels went hand in hand with the Sonics to Olympia, even hiring a lobbyist at city expense exclusively to push legislation that would have provided public money for a $200 million expansion of city-owned KeyArena.

Nickels also had the city pay for consultants to draw up conceptual plans for the expansion.

Construction was to be paid for by extending hotel, car-rental and restaurant taxes used to pay off the debt on Safeco and Qwest fields.

The bill was dropped late in the session and little political groundwork had been laid. It didn't even get a vote in committee.

In some ways that early attempt in Olympia backfired. Some Seattle City Council members were irritated that Nickels supported such legislation without their blessing.

Before the Sonics returned to Olympia this year, the council passed a resolution saying the city would not support tax money for a KeyArena renovation unless the proposal had been publicly vetted by the council.

While the resolution was nonbinding and relatively mild in tone, Sonics officials viewed it as an insult. "It is not a friendly message," Sonics Executive Vice President Terry McLaughlin said at the time.

"The way we started out the negotiations wasn't ideal at all," Councilman Tom Rasmussen said Tuesday. "We got off to a bad start and that may have motivated them to look elsewhere."

The relationship didn't get much friendlier.

Early this year, the council decided to make Nick Licata its president. Licata had made his name in politics, in part, by helping to fight stadium subsidies for the Mariners and Seahawks as part of Citizens for More Important Things — and was equally opposed to the Sonics' plan.

In February, Schultz issued an ultimatum, saying the team might be sold if lawmakers didn't act by the end of the 2006 legislative session.

Licata responded by telling Sports Illustrated the impact of the Sonics leaving town would be "close to zero."

This year in Olympia, Sonics officials couldn't even get Nickels to take the lead in promoting their proposal in the Legislature.

The team turned to King County Executive Ron Sims, who broadened the Sonics legislation into an open-ended funding scheme that would have raised more than $1 billion over 20 years for the Sonics and unspecified "amenities" chosen by the county.

Again, the proposal languished.

A major sticking point was the Sonics' refusal to agree to a public vote that even their allies said was probably politically necessary.

Gov. Christine Gregoire made a last-ditch effort to put together a compromise, holding closed-door meetings with the Sonics, city and legislative leaders in the waning days of the session.

But that failed to produce an agreement, and Gregoire later wrote a letter to Seattle officials saying it was up to them to come to make peace with the Sonics before returning to Olympia.

Schultz on Tuesday singled out Gregoire for praise, saying he appreciated her efforts to save the team.

The past several months have been marked by warring public statements from city and team officials but little actual progress on an arena deal.

Deputy Mayor Tim Ceis met with team owners at least twice in May at the law firm of Preston Gates & Ellis, according to his calendar. He also met last month with Stan Barer, a part owner of the Sonics and a University of Washington regent.

Meanwhile, local activists began pushing an initiative aimed at preventing Seattle officials from giving the Sonics any sort of sweetheart deal at KeyArena. Backers of Initiative 91 have turned in more than 20,000 signatures and were prepared to drop off 3,500 more — likely enough to qualify for the ballot this fall, sponsor Chris Van Dyk said. That measure will apply to the new owners too, Van Dyk said.

At the final meeting between the Sonics and the Mayor's Office, the city offered the team three possible options for a KeyArena expansion.

The priciest option would have delivered a $198 million expansion, with the team expected to contribute $49 million of that, according to Nickels' office.

A second option was a $149 million expansion with owners contributing $37 million. Both those options would have required a public vote and would have been tied to a lease of at least 20 years. They also would have required approval from the Legislature to tap hotel and car-rental taxes.

The third option would not have required a public vote or cost the Sonics owners anything. It would have provided a $50 million KeyArena renovation. That option would have relied on "existing revenue streams" and not new taxes, according to Nickels spokesman Marty McOmber.

The options would have given the Sonics $8 million to $20 million a year in additional revenue, according to city estimates.

Ceis said he'd expected an answer to the city's offers after an owners meeting June 26, but no word came. "It was pretty clear at that point they were looking at different options," he said.

Staff reporters Sharon Pian Chan, Ralph Thomas and Bob Young contributed to this report. Jim Brunner: 206-515-5628 or jbrunner@seattletimes.com