Sonics tally past investment

Why only $18.3 million?

That's how much Sonics owners said this week they'd be willing to contribute to a proposed $220 million expansion of KeyArena. Taxpayers would pay the rest.

Although owners hinted they'd be willing to go higher, the $18.3 million figure — just 8 percent of the $220 million project — struck some city leaders as laughably small even as an opening offer.

Seattle Mayor Greg Nickels regards the number as a "starting point," a spokesman said. At a Wednesday news conference, the mayor struck a somewhat defiant tone, saying Seattle has higher priorities than just the Sonics.

The team is important, Nickels said, but "they are not perhaps as important as replacing the viaduct or making sure the schools work."

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"The president of China chose Seattle as the place he wanted to come in his first visit here," Nickels said. "I don't think we have to worry about whether the Sonics are there to be seen as a world-class city."

In making this week's $18.3 million offer, the Sonics suggested that the proposed $220 million KeyArena expansion is really just "Phase Two" of a project that started 10 years ago.

"Phase One," Team President Wally Walker said, was the 1995 remodel that tore down the old Seattle Coliseum and created KeyArena.

Therefore, team owners argue they should get credit for $94 million — an amount the Sonics claim to have invested in the arena over the past 10 years.

That includes about $21 million it spent on the 1995 remodel and subsequent improvements such as a new scoreboard and an exclusive "courtside club" for those who purchased more expensive seats.

The Sonics also want credit for the $73 million in city bonds, which have been repaid largely out of the city's share of revenue from KeyArena events. (The total construction cost of the 1995 KeyArena project has been estimated by Seattle Center at $104 million.)

If the team is credited with $94 million, then the additional $18.3 million it's offering would bring the owners' total investment to about $112 million.

By the Sonics' math, that sum equals 35 percent of the $324 million cost of the two "phases" of KeyArena construction.

That contribution would be roughly similar to the share the Mariners and Seahawks paid to help build their stadiums, the Sonics argue.

But some City Council members aren't buying it.

"It doesn't work for us," said Councilman David Della, chairman of the council committee that will consider the Sonics request next week. He said the team needs to put in a "new amount of dollars" and "we shouldn't count everything from the past."

City Council President Nick Licata likened the Sonics' calculations to "the da Vinci code" and said the team's $18.3 million offer makes no sense.

Licata noted that for several years the annual revenues from Sonics events at KeyArena have not covered the costs of debt payments made by the city to pay off bonds from the 1995 expansion. The city still owes about $55 million on those bonds.

Much of the money the Sonics want credit for was paid by the previous team owner, Barry Ackerley. The current owners, a group of 58 investors led by Starbucks Chairman Howard Schultz, purchased the Sonics in 2001 for $200 million.

Asked why the current owners should get credit for Ackerley's investments, a Sonics official Wednesday said the new owners bought "equity" that Ackerley had built up in KeyArena.

Sonics Executive Vice President Terry McLaughlin said he's been frustrated that city officials have not embraced the team's proposal, which would be much cheaper than the estimated $400 million it would take to build a new basketball arena elsewhere.

"We are not jettisoning an old building and just starting with raw land," McLaughlin said.

Jim Brunner: 206-515-5628 or jbrunner@seattletimes.com