Sonics' move to the 'burbs: Would it be a bust or a boon?

The Sonics' flirtation with Bellevue and Renton is sparking serious conversation about the team moving to the suburbs after nearly 40 years in Seattle.

But with all the talk come tough questions:

• Can the Puget Sound region support a fourth arena, competing against KeyArena, Everett Events Center and the Tacoma Dome?

• If Seattle is balking at a $220 million expansion of KeyArena, how would smaller suburban cities raise the estimated $400 million it would take to build a new arena?

• Would a major sports facility prosper in suburbs known mainly for corporate headquarters, a swanky shopping mall and a Boeing plant?

The market

Suburban arenas have pluses, minuses

A suburban facility would join arenas in Seattle, Everett and Tacoma vying for many of the same concerts, trade shows and other large events.

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The 15th-largest market in the country probably isn't big enough for four facilities, said John Christison, president of the Washington State Convention and Trade Center and a former head of arenas in Portland and Orlando, Fla.

A major suburban arena, with a large capacity and brand-new amenities, would probably do just fine, experts say. But the new facility would "spell disaster" for KeyArena, according to a recent Seattle City Council subcommittee report. The old facility would struggle financially, says the report, and a "major rethinking" of its future use would be necessary.

That scenario has already played out in other cities across the country. In 16 of 26 cases of an NBA team leaving an old arena, the old facility was demolished or converted for an entirely different use, the report notes.

After the Memphis Grizzlies moved into the new FedEx Forum in 2004, business plummeted at the 21,000-seat Pyramid Arena down the road. Plans were recently announced to convert the old arena into a giant fishing store and boat showroom.

In Dallas, the new American Airlines Center was given the right of first refusal to any events that come to the city, dealing a major blow to Reunion Arena.

The money

Raising $400 million requires heavy lifting

The biggest issue for any suburban suitor will be money, experts say. A new arena could cost $400 million, compared with $220 million for a KeyArena expansion. This gap alone casts doubt on the feasibility of a suburban arena, said Bob Wallace, a Bellevue developer and a member of the public board that owns Safeco Field.

"Two hundred million dollars is a big delta," he said.

Most sports facilities in American pro leagues — 75 of 107 — are funded primarily with public money. And of the 32 stadiums or arenas with mostly private investors, the team owners almost always foot a significant chunk of the bill, according to the National Sports Law Institute at Marquette University.

The Eastside business leaders with an eye on Bellevue want to raise the $400 million privately, a staggering task. Not only would they be raising the money without public help, they would also have to find a way to deliver good returns to all their investors, including the Sonics.

Sonics officials aren't saying how much they would pitch in for a suburban arena, but they would expect to manage the facility and keep all the revenue, as with their proposal for the KeyArena expansion.

This is the national model for sports facilities over the past decade, Sonics Executive Vice President Terry McLaughlin said. The lead tenant also takes on the expense of running the arena.

Even with ticket sales, luxury suites, restaurants and a modern facility, teams need government to help pay for construction — and sometimes the debt on the construction bonds — to make a profit, according to the Sonics and national experts. Rising player salaries over the past 20 years haven't helped.

"These arenas and stadiums are not profit centers on their own," McLaughlin said.

The talk in Bellevue

Private investors considered the key

Eastside business leaders say a privately funded arena in Bellevue could work, at least in theory.

The facility would have to keep busy with trade shows, concerts and other sports teams besides the Sonics and the WNBA's Seattle Storm, said Kemper Freeman, the owner of Bellevue Square and Lincoln Square. And it would need to offer lots of parking and good vehicle access, both of which are hard to find at KeyArena and other local sports facilities, he said.

"It's absolutely pathetic that we haven't treated our citizens better just in getting to these facilities," Freeman said.

Still, in Bellevue, the Sonics could run into a conflict with private investors who want more control over the arena. According to McLaughlin, the investors could still make money if the arena is part of a larger development, perhaps with retail, office or housing and stretching over as much as 75 acres.

"[We] have to look at all the pieces of the development," McLaughlin said.

A new arena alone would need about 12 acres, but Freeman said he could see a mixed-use Bellevue development covering 30 or 40 acres.

The most likely spot for an arena in Bellevue is the site of the old Safeway distribution center east of Interstate 405, near Bellevue-Redmond Road. The 75-acre site is close to three freeways and is part of a 900-acre stretch of aging warehouses and office parks that the city wants to redevelop.

Some Eastside leaders are confident the $400 million could be raised privately. Issaquah developer Skip Rowley has said there are a half-dozen people on the Eastside "who could write a check for it and not even know it."

Others aren't so sure. Wallace said he doesn't think the extremely wealthy would want to invest in sports. And the group of 20 Eastside business leaders who have met to discuss the idea wouldn't necessarily be arena investors, Freeman said.

Some privately funded arenas have succeeded, such as Staples Center in Los Angeles and the Palace of Auburn Hills outside Detroit. But Paul Allen, the seventh-richest man in the world, was the lead investor in Portland's Rose Garden and declared bankruptcy on the arena in 2004.

According to McLaughlin, a privately funded arena is "conceptually possible, but I would say very challenging to do."

Renton's options

Mixed-use Landing could be part of deal

In Renton, city leaders say all funding options are on the table, but a public-private partnership is most likely. An arena could be paid for partly with an extension of the state hotel and restaurant taxes that helped fund Safeco and Qwest fields, which is what the Sonics want for a KeyArena expansion.

Renton officials want the arena built on a 68-acre urban village called The Landing on the south end of Lake Washington. Construction will start later this year on the first phase of the development, with 600,000 square feet of retail and 900 apartments or condos.

The city, Sonics and the village's developers could reach a deal together, said Alex Pietsch, the city's head of economic development.

The financially conservative Bellevue City Council, meanwhile, is not expected to pitch in substantial money for an arena, developers say.

Wherever it may go, a suburban arena would probably need some money from the state Legislature, McLaughlin said.

But that could be an uphill battle for Bellevue, given the Democrat-controlled Legislature, and many of those Democrats are from Seattle, said Wallace.

"It's unlikely they'll give a plum like that to Bellevue, when they won't even fund it in their own town," he said.

The suburbs

Fan base there, but are cities ready?

Bellevue has 115,000 people and a booming downtown with a growing slate of upscale bars and restaurants.

But some people don't think the city is ready for the big time. With rising ticket prices and so many competing entertainment options, a new arena nowadays needs to entice people with more than just a basketball game, said Rodney Fort, a sports economics professor at Washington State University.

Bellevue doesn't yet have the necessary nightlife and vibrancy, Fort said. "It doesn't have the same draw, and people need that," he said.

Renton has 57,000 people and a reputation largely defined by its Boeing 737 airplane plant. The population, though, has grown 27 percent in the past 10 years and could grow with annexations to 120,000 people over the next decade.

To be sure, some suburban arenas haven't worked, and the most recent trend nationally is for sports facilities to be built in the downtowns of major cities.

The Coliseum at Richfield — built on country roads between Cleveland and Akron — was the home of the Cleveland Cavaliers NBA team for 20 years. But the arena was difficult to reach and the team moved to Quicken Loans Arena in downtown Cleveland in 1994. The Coliseum was torn down and converted to parkland five years later.

But many suburban sports facilities have succeeded. The Detroit Pistons, Florida Marlins, Miami Dolphins, Dallas Cowboys, New England Patriots, Washington Redskins and Phoenix Coyotes all play in suburbs.

The Sonics' Eastside market, including Bellevue and Renton, makes up 26 percent of its season-ticket holders and 19 percent of the team's total ticket buyers. And an Eastside site would be easier to get to than KeyArena for many fans.

Outside experts say Wallace and Freeman are just the kind of leaders to get something done.

Wallace was a key player in the construction of the Washington state convention center and Safeco Field, and Freeman is known for completing seemingly impossible projects, such as Lincoln Square in downtown Bellevue.

"Kemper Freeman is one of the sharpest business people in the nation, not just Bellevue," said Chris Van Dyk, the head of a local group opposing public funding for sports facilities.

Leaders on the Eastside are accustomed to building their cities from the ground up, Freeman said.

A sports arena would just be the latest piece.

"People over here are used to saying what don't we have or should have and working on getting it," Freeman said. "There's good spirit and attitude from people who think this is important."

Ashley Bach: 206-464-2567 or abach@seattletimes.com