New Sonics owner Clay Bennett headed to the State Legislature, pitching a $500 million Arena (P-I, Times). "Let's build it right. Let's build it big. Let's build it flexible," was part of his pitch for this grandiose use of public dollars. We'll go into funding specifics later, but let's lay out the broad princples once again:
Public contributions are now up to $400 million, with the city of Renton contributing another $100 million. Public financing for recent stadium projects has usually accounted for between 25% and 40% of total costs.
Bennett pushed the Arena as a potential site for political conventions, an NHL team, and corporate events. The metro area already has plenty of even space; getting a hockey team might be nice, but we'd have to find one that wants to come here; and political conventions require tons of luxury hotel space within a short distance of the convention site. Even with a new Sonics arena, KeyArena would be a more likely site for a summer Democratic or Republican confab.
Bennett is now performing the owner chicken little act, claiming losses "north of $20 million" and that he will be forced to move his team before the end of its lease in 2010. Forbes has independently estimated the Sonics' operating income at $3.6 million—enough to keep the team out of the lower third, despite ownership uncertainty, weak attendance, and a mediocre year on the court.
Bennett's main threat is to move to Oklahoma City, which has one-third the size and two-thirds the per-capita income, in the hope of making more money. He might get a better share of stadium revenue in OKC, but his media contracts will be worth far less money.
The state is in a strong negotiating position, and has little reason to accept Bennett's current offer. I still think $275 million, with ownership putting up 60% of the money, sounds like a fair deal.
