Ballmer's proposal to expand KeyArena is dead

A proposal led by Microsoft CEO Steve Ballmer to expand KeyArena is dead.

Ballmer had put an April 10 expiration date on his group's offer to pay $150 million toward a $300 million KeyArena expansion.

But efforts to come up with the public share of the money fell short, Seattle Mayor Greg Nickels said at a morning news conference.

"This is a truly missed opportunity for our city, the region, the state and the NBA," Nickels said.

Nickels vowed to try to keep the NBA in Seattle.

The city will continue to pursue its federal lawsuit against Sonics owners, seeking to hold the team to its KeyArena lease through 2010. A trial in that case is scheduled for June.

In an earlier letter to Gov. Christine Gregoire and top lawmakers, Ballmer's group had said the arena plan needed to come together before the NBA Board of Governors meets April 17-18 to vote on Sonics owner Clay Bennett's request to move the team to Oklahoma City.

Nickels had pledged $75 million from the city through lease payments and admissions taxes on KeyArena.

But the state Legislature declined to authorize an additional $75 million that would have been raised through taxes on restaurant meals and car rentals in King County. Nickels said his staff was unable to come up with an alternative way to raise that money without the state's help.

"We had hoped this offer would be compelling enough that the Legislature and the governor would embrace it and give us the tools to go into the NBA Board of Governors meeting later this month and make an extraordinarily strong case," Nickels said.

Instead, state lawmakers would only agree to create a task force to consider funding KeyArena along with a smorgasbord of other projects next year. The seven-member task force has not yet met.

Ballmer's group, backed by his estimated $15 billion net worth, had said it was willing to buy the Sonics or another NBA franchise to play at KeyArena.

Bennett has repeatedly said the Sonics team is not for sale and has been preparing for a move to Oklahoma City, where voters recently approved $121 million in taxes for an arena renovation and practice facility for the team.

Wireless entrepreneur John Stanton, Seattle developer Matt Griffin, and Costco CEO Jim Sinegal were the other partners in Ballmer's investor group.

In February, Bennett offered the city $26.5 million to drop its lawsuit and allow the Sonics to leave for Oklahoma. The city rejected the offer.

Nickels was asked several times at the morning news conference whether the city will reconsider letting the Sonics out of the KeyArena lease in exchange for a larger cash payment or the promise of a potential future NBA franchise.

Nickels repeatedly answered "We have a court date in June" and refused to elaborate.

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