Blame flies as city sues Sonics

Seattle officials filed a lawsuit Monday that accuses the Sonics' owners of acting in bad faith and the team of playing lousy basketball.

The lawsuit, which seeks to enforce the Sonics' KeyArena lease, came in response to Sonics owner Clay Bennett's announcement Friday that he was seeking arbitration to get out of the final two years of the lease.

The city wants a court order forcing the team to play out its lease at KeyArena through September 2010 instead of paying a cash settlement to leave early.

The suit, filed in King County Superior Court, also attempts to block Bennett from taking the dispute to arbitration, arguing that only a court can nullify the lease.

Seattle City Attorney Tom Carr announced the lawsuit at a news conference with former U.S. Sen. Slade Gorton, whose law firm, K&L Gates, has been hired by the city for the lease dispute.

"Too often, pro sports teams have run over local governments and gotten their way with them. Today we are standing up and saying 'no.' We have an agreement. We are going to enforce that agreement. We want you to honor your promises," Carr said.

Neither Bennett nor the NBA would comment on the lawsuit Monday. Bennett has called KeyArena, even if renovated, "a dead end" and says he'll ask the league for permission to relocate the Sonics and Storm unless he gets a new arena deal by Oct. 31.

In the arbitration papers filed last week, the Sonics argued that the public and local politicians have demonstrated that they don't care if the team leaves, making a cash buyout of the KeyArena lease a reasonable option.

The city's lawsuit tries to turn the tables, accusing Bennett and his Oklahoma City-based ownership group of never intending to keep the Sonics in town. The suit also says the team, not KeyArena, is responsible for the Sonics' recent financial troubles.

Bennett's arbitration demand last week blamed KeyArena — the smallest venue in the NBA — for the Sonics' mounting losses, which the team said reached $17 million last year.

But Seattle officials countered that the losses have more to do with the team's spate of losing seasons.

"The issues with the Sonics' profitability at KeyArena have less to do with KeyArena than perhaps the Sonics' ability to defend the high pick-and-roll," Carr said. "Good teams, competitive teams have done well here."

The city's lawsuit traces the Sonics' downfall to the 1998 NBA lockout, which diminished fan interest in professional basketball. The Sonics subsequently slid from their mid-1990s success on the court, suffering through a spate of mostly losing seasons in recent years. Annual attendance at games has fallen from more than 600,000 in the mid-1990s to 457,000 last year, according to the suit.

The lawsuit also notes that Bennett has rejected offers from local businessmen who wanted to buy a piece of the team, and cites comments from part-owner Aubrey McClendon that "we didn't buy the team to keep it in Seattle."

"Regrettably, almost from the beginning those Oklahoma owners gave every indication that they did not intend a longtime stay in the city of Seattle," Gorton said.

Gorton called the owners' efforts to get a $500 million arena built in Renton, mostly with taxpayer money, "the kinds of demands that from my perspective were almost designed not to be met."

The first issue a judge will have to decide in the lawsuit is whether the dispute belongs at the courthouse at all.

Bennett's lawyers have argued the lease steers virtually all lease disputes between the city and team to binding arbitration. In that process, a panel of three neutral attorneys would decide which side wins.

But the KeyArena lease says disputes over the "term," or length, of the lease are not subject to arbitration. Carr said that means the Sonics can't break their lease without going to court.

If Seattle is able to keep the dispute in court, the argument will turn to whether a cash buyout is sufficient to compensate the city for the Sonics abandoning KeyArena early.

Normally, landlords can't compel tenants to stay. But city officials argue this situation is unlike a standard landlord-tenant dispute, noting that KeyArena was built to meet the demands of previous Sonics owners.

At the request of the Sonics, the Seattle City Council approved 20-year bonds in 1994 to pay for the renovation of the old Seattle Coliseum, which became KeyArena. The council initially balked at the 15-year lease term because the lease would end before the bonds were paid off. The city has estimated it will still owe $30 million on that renovation in 2010.

"The city reluctantly agreed to a 15-year lease term in order to have the Sonics play here," Carr said. "We didn't agree to a 12- or 13-year lease term."

Carr said it will take weeks, and perhaps several months, before the lawsuit is resolved.

Brian Robinson, co-founder of the fan group Save Our Sonics and Storm, applauded the city's "aggressive stance" and said the NBA should think hard about whether to approve relocation requests from team owners who break leases.

"Every NBA city has to be watching this action really closely," Robinson said.

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