Kent arena's new benefactor has history of troubles

Last month, Kent Mayor Suzette Cooke stood smiling before the media, a banner behind her, balloons beside her, leading the audience in a chant of "The Amiga Center at Kent."

She had called the press conference to introduce Amiga Inc., which says it will pay $10 million for naming rights for the city's planned arena for the Seattle Thunderbirds hockey team. She hailed Amiga as a global-technology company that would bring its headquarters to Kent and help make the city a "technology hub."

But a closer look at Amiga reveals a history of failed ventures and broken promises that raise questions about how it can deliver on its ambitious pledges — including a $2.5 million down payment due when arena construction begins this summer.

Amiga gained fame in the 1980s as the name of a breakthrough computer, but investors have struggled ever since to capitalize on the technology. The company has gone through several ownership changes and racked up legal challenges and unpaid debts. It was evicted from its Snoqualmie offices in 2002 and forced to auction off its equipment.

As a private company, Amiga is not obligated to disclose its earnings, but the financial analysis firm Dun & Bradstreet estimated the company's total revenue last year at $1.6 million.

Bill McEwen, Amiga's local executive, acknowledges the company has been through hard times but says it has big investors — most of whom he wouldn't identify — and is working on major business deals.

"We're a different company now," McEwen said. "We're growing, and we're well-funded."

Kent city officials say they knew about Amiga's troubled past but attributed it to the dot-com bust. They remain optimistic about the company's plans, which include bringing hundreds of new jobs to town and a partnership with local schools.

If the naming-rights arrangement falls through, they say, there's plenty of time to find another sponsor.

"We saw nothing but pluses when one looks at the future," Cooke said.

$67 million project

The Kent City Council has not yet officially approved construction of the 6,025-seat arena, which would open in 2008 in the heart of downtown. But that approval, expected in June, seems largely a formality.

The city plans to pay most of the arena's expected $67 million construction cost by issuing bonds that would be paid back with arena revenues. The state Legislature this year agreed to divert some sales taxes collected in the city to cover a third of the arena's cost.

City officials say they made it clear to legislators that they were looking for private sponsorship to help, too. The Seattle Thunderbirds suggested Amiga before the city began a search. Team executives vouched for the company, which has been a team sponsor and sells a few video games bearing the Thunderbirds logo.

Amiga made an appealing pitch to Kent, a city increasingly focused on economic development. The company plans to bring 237 jobs to town by 2009. And it promised to help create the "most technologically advanced center of its size in the United States" — installing equipment that will let fans use cellphones to order food or see instant replays.

Under the naming-rights deal, Amiga is obligated to pay $10 million over the next 20 years. In exchange, Amiga gets its name emblazoned under the ice, on Zambonis and spread across the score clock — the sort of publicity that suggests a big corporate player.

In announcing the partnership, Kent city officials called Amiga the "third most-recognized brand in Europe" and the "world's premier provider of multimedia enabling technologies."

But even McEwen acknowledged that last claim dates back several years. It appeared in a British publication, he said, but he could not recall which one.

A visit to Amiga's Issaquah offices last week found just McEwen and one other employee in a suite of offices strewn with cardboard boxes and old computers. Although he was introduced by Kent officials as the president of Amiga, McEwen said he is really vice president. He later added that he had recently been named acting president.

Despite the small local operation, McEwen said the company has a total of 79 employees — including 67 in India and a few in New York, New Zealand and England.

The company's Web site sells only a few dozen retro-looking video games, such as a version of the classic "Space Invaders."

McEwen declined to reveal the company's annual revenue or sales figures. The only investor he would name is Amiga's chairman, Finnish-born venture capitalist Pentti Kouri, who operates out of New York.

McEwen, 44, speaks of the company's future with the enthusiasm of a born salesman. He says it is on the verge of releasing a long-delayed update of the Amiga operating system and has a deal with a Canadian computer manufacturer to release the first new Amiga computers in years.

Whatever the company's future might hold, it currently registers barely a blip in the wireless and computing worlds.

Rob Enderle, a California-based technology analyst, said the Amiga name still carries some cachet, mainly because of computers and software produced decades ago. A cadre of Amiga enthusiasts continues to exist, running magazines, Web sites and online forums.

But in recent years, Enderle said, the Amiga name has rarely been associated with innovation.

He questioned the wisdom of the company's deal with Kent.

"It doesn't make a huge lot of sense to drop $10 million on marketing with naming rights when they don't have a lot to market," Enderle said. "It seems like a company that is trying to make it look like they are larger than they are to attract investors."

Gateway connection

Amiga got its start in 1985, as the name of the innovative computer first produced by Commodore Business Machines. For a time, the Amigas, with their unique operating systems and graphics capabilities, seemed capable of dominating the burgeoning personal-computer market. But that promise faded as Microsoft and others became dominant in the industry.

Gateway acquired the Amiga patents in 1997 but ultimately decided to shut down its Amiga division. McEwen, who worked for Gateway, gathered investors who purchased the Amiga assets and the right to use its technologies and name. He headed up the new company, which produced a software platform that allows developers to write games and other programs for wireless phones, computers and PDAs.

But other products, such as the long-promised operating system and new computers, failed to materialize. The company struggled and its debts mounted.

"Investors were supposed to put more money in," McEwen said. "When time came to have the money, they closed up shop, went away and left us high and dry."

A string of lawsuits followed, with Amiga ordered to pay the Snoqualmie landlord $147,000 in rent, and two former employees $117,000 in unpaid wages and damages.

Bolton Peck, a former software tester who now owns a bike-repair shop in Preston, was one of those employees. He declared personal bankruptcy and is still owed about $80,000 from Amiga and McEwen.

Peck moved from California to work for the company because he was attracted by McEwen's grand vision. But McEwen proved more skilled at marketing, Peck said, than running a business.

"His reach has exceeded his grasp by a considerable margin," Peck said.

McEwen said he's sorry for everyone who lost money in the collapse of Amiga. But he said he suffered, too: He declared bankruptcy in 2005, saying Amiga owed him $747,000, and has yet to recover the money.

Business records show Amiga legally shut down its Washington company in 2004. The new company — which McEwen said is legally separate from the old one and not obligated to pay those past debts — is registered as a Delaware corporation with headquarters in New York.

Ben Wolters, Kent's economic-development director, said only time will tell whether the company will be able to follow through. With any startup, he said, there is the risk that products will not materialize or that the business plan will fall flat. But the potential upside, he said, is "tremendous."

"What we're doing with this is betting on their future," Wolters said. "And they're betting on Kent's future."

Seattle Times news researcher Gene Balk contributed to this report.

Cara Solomon: 206-464-2024 or csolomon@seattletimes.com

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