Sonics owner demands arbitration over lease
Seattle Times staff reporter
Setting up a likely legal brawl with the city of Seattle, Sonics owner Clay Bennett on Friday filed a demand for arbitration, seeking to get out of the final two years of the Sonics' KeyArena lease.
With no solid prospects emerging for a new arena deal by his Oct. 31 deadline, Bennett said he wants a panel of impartial arbitrators to "bring some clarity" to the lease — specifically on the question of whether the Sonics simply can pay a cash settlement to leave KeyArena before the lease expires in 2010.
At a morning news conference in downtown Seattle, Bennett also announced the Storm will play its 2008 season at KeyArena and insisted the teams "are not for sale" despite rumors of interested local buyers.
Bennett said his arbitration demand, filed by the Seattle law firm Byrnes & Keller, was a response to increasingly hostile statements by Seattle officials, who have vowed to bind the Sonics to KeyArena until the team's lease ends in September 2010. He cited Seattle Deputy Mayor Tim Ceis' recent comment that the city was "lawyering up" by enlisting former Sen. Slade Gorton, R-Wash., to help enforce the KeyArena lease.
Now that both sides have lawyered up, the next step may be a lawsuit from the city.
City officials on Friday expressed outrage at Bennett's move, but carefully avoided discussing their legal strategy. An aide to City Attorney Tom Carr said he would have no comment on the city's legal position until Monday.
A City Hall source said the city has decided to officially hire Gorton's law firm, K&L Gates, to work on the lease dispute and that lawyers would review their options over the weekend. Seattle Mayor Greg Nickels already has requested setting aside $1 million in next year's budget for legal fees.
"There have always been sensible options available to Mr. Bennett if he wanted to keep the Sonics and Storm at KeyArena. Today's actions make it clear that has never been his intention," Nickels said in a prepared statement. "My door has been open, is open and remains open to Mr. Bennett, but he has refused to meet. Typically, people acting in good faith engage in a conversation before seeking arbitration."
Bennett said the city is putting the Sonics in an impossible position and that he had to act now despite his pledge when he bought the team that he would work in good faith until Oct. 31 to stay in Seattle.
"We believe it does not make sense to stand and wait and watch the clock strike 12 on Oct. 31," Bennett said.
The Sonics' 13-page arbitration demand says the team lost $17 million playing at KeyArena last year and cites a long list of grievances — including public statements by Seattle politicians and media figures that nobody will care if the Sonics leave town.
"Given the many negatives of a forced and dysfunctional relationship, the lack of corresponding benefits, and the resulting financial losses for both sides, it makes no sense to unnecessarily prolong the relationship," the arbitration demand says.
It is unclear whether Bennett will be able to skip the courthouse and achieve his goal through arbitration.
The Sonics' KeyArena lease says most disputes between the city and team must be settled by a three-member panel of arbitrators. But the lease specifically exempts arguments over the "term" or length of the lease, which says the Sonics must play all regular-season home games at KeyArena through September 2010.
Paul Schneiderman, an attorney advising the fan group Save Our Sonics and Storm, said "the agreement is very clear that only certain disputes between the city and the SuperSonics are eligible to be decided by an arbitration panel" and that an early buyout is not one of them.
But Bradley Keller, one of Bennett's attorneys, said other provisions in the lease make it clear the document was intended to steer virtually all disputes to arbitration and that the agreement gives only the Sonics — not the city — the right to file a lawsuit. The 15-year lease was written in 1994 as part of a deal for a $100 million renovation of the old Seattle Coliseum, which became KeyArena.
"It was never contemplated that once the building was renovated and occupancy was taken that anything would be decided by anything other than arbitration," Keller said.
NBA spokesman Tim Frank said in an e-mail that league officials would have no response until they had a chance to review Bennett's arbitration filing.
Bennett said he appreciated a recent offer by the Muckleshoot Tribe to provide land for a new arena next to Emerald Downs in Auburn and said he will continue to talk with the tribe and any others with possible arena plans.
He also said he had received other proposals for new arenas but, "We've seen nothing that is coming together in a formal legal binding way that would signal the development of an arena will take place in the next few weeks."
As of now, the Muckleshoot arena idea appears to be the furthest along, but the tribe has no financing plan for the arena, which a consultant estimated would cost more than $450 million.
Gov. Christine Gregoire called Muckleshoot tribal council Chairwoman Charlotte Williams on Friday to ask a few questions about the tribe's arena study, according to tribal spokesman Rollin Fatland. Aides to Gregoire said she has directed them to examine the feasibility study recently completed by the tribe's consultants.
Despite his poor relationship with Seattle officials, Bennett said Seattle Center still makes the most sense as a site for a new Sonics and Storm arena. "If we could wave the wand, in my opinion, the building should be in Seattle Center," he said.
But he repeated that KeyArena, even if renovated, "is a dead end."
Seattle Times staff reporter Ralph Thomas contributed to this report.
Jim Brunner: 206-515-5628 or firstname.lastname@example.org
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