Oklahoma Legislature working on Sonics tax package

OKLAHOMA CITY — While the Legislature in Washington state has put off until next year a proposal to fund renovations to KeyArena, Oklahoma politicians are working on tax incentives and an arena lease to lure the Sonics from Seattle.

Senate Co-President Pro Tem Glenn Coffee, R-Oklahoma City, said he has agreed to be the author of a bill that would provide incentives only if the Sonics relocated.

"I don't have the language yet, but we're working on it," Coffee said. "In general, there are some costs to relocating the Sonics to Oklahoma City."

Coffee said the incentive would likely resemble the state's Quality Jobs Act, which gives rebates to companies for creating jobs, and the cost would be recovered when the Sonics and their opponents pay income taxes for games played in Oklahoma.

Democratic Senate leader Mike Morgan of Stillwater and House Speaker Chris Benge, R-Tulsa, have also been involved in discussions with Coffee. The lawmakers said the SuperSonics approached them about enacting the tax breaks.

Meanwhile, Oklahoma City Manager Jim Couch this afternoon outlined Sonics owner Clay Bennett's proposed terms for a 15-year Sonics lease.

The Sonics would pay annual rent of $1.6 million for use of the city's Ford Center arena, according to a 16-page letter Bennett sent today to Oklahoma City Mayor Mick Cornett.

Voters in Oklahoma City recently approved a temporary 1-cent sales tax to raise $121 million for upgrades to the Ford Center and construction of a separate NBA practice facility.

The Sonics would pay $100,000 a year in rent for the practice facility, according to the proposal. The city also would receive more than $400,000 a year for Ford Center naming rights, with the Sonics getting the rest of the naming-rights money.

The Sonics could break the agreement after six years if ticket sales fell below certain benchmarks.

The lease would begin as early as July 1, 2008, or as late as July 1, 2010, depending on the outcome of a federal lawsuit between Seattle and the Sonics over the team's KeyArena lease. The lawsuit, filed by Seattle officials, seeks to enforce the KeyArena lease through 2010. Bennett is seeking to leave by this fall in exchange for a cash settlement. A trial in the case is set for June.

Couch said Oklahoma City expects to break even or make a small profit on the lease. "We think this is a very solid deal for the citizens of Oklahoma City," he said.

The lease and the possible tax package are aimed at demonstrating Oklahoma City's desire to host its first NBA team to the league's Board of Governors, which meets next month to vote on whether to allow the Sonics to relocate.

The Washington Legislature adjourned Thursday without considering a proposal by Microsoft CEO Steve Ballmer and three other investors, wireless entrepreneur John Stanton, Seattle developer Matt Griffin and Costco CEO Jim Sinegal. Ballmer's group would have paid $150 million toward a $300 million KeyArena renovation. The other half would have come from public funds.

State lawmakers were being asked by Seattle city leaders and the investors to authorize $75 million in car-rental and restaurant taxes in King County. Those taxes would not have been new — they are currently devoted to paying off the debt on Safeco Field. The Metropolitan King County Council would need to give final approval to that part of the proposal.

The other $75 million in public money would come from the city of Seattle, through admissions taxes or lease payments on KeyArena, according to the proposal.

Washington Gov. Christine Gregoire encouraged the city of Seattle to consider its part of the funding, and the Legislature would revisit the proposal during its session next year.

But Seattle Mayor Greg Nickels has said that will be too late. His office is trying to come up with an alternate funding plan to make up for the $75 million the state refused to authorize.

Deputy Mayor Tim Ceis called the moves by Oklahoma politicians "presumptuous" and said he'll continue to work on fully funding the proposed KeyArena expansion before the NBA meeting next month.

Seattle Times reporter Jim Brunner reported from Seattle. Information from Seattle Times archives is included in this report. Jim Brunner: 206-515-5628 or jbrunner@seattletimes.com