Mayor pledges fight to keep Sonics

Seattle Mayor Greg Nickels vowed Tuesday to continue fighting to keep the Sonics in the city, despite the demise of a proposed $300 million KeyArena expansion backed by Microsoft CEO Steve Ballmer.

At a news conference, Nickels confirmed the city could not find enough public money for the KeyArena project before the April 10 deadline set by Ballmer, whose investment group had offered to split the cost 50-50 with taxpayers.

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

Seattle officials had hoped to have the arena plan in place before the NBA Board of Governors meeting April 17-18, when league owners are expected to consider Sonics owner Clay Bennett's plan to move the franchise to Oklahoma City.

While Ballmer's offer is now officially off the table, a partner in Ballmer's investment group said the group might still be a player in future talks to save NBA basketball for the region.

"The mayor has called and asked if we would keep an open mind, and I have said 'of course.' We'd be irresponsible to say we wouldn't keep an open mind," said Seattle developer Matt Griffin.

The city's immediate focus will turn to the federal lawsuit seeking to hold Sonics owners to the remaining two years of the team's KeyArena lease.

Asked whether Seattle would consider settling that lawsuit, city officials insisted they're ready to go to trial in June.

"We intend to have them honor the lease. There are no settlement negotiations going on," City Attorney Tom Carr said in an interview Monday.

"There is always a number somewhere that the mayor or council would say, 'We have to take that,' " Carr said. But he added, "We haven't thought about what it might be."

After the city rejected a $26.5 million settlement offer from the Sonics in February, some City Council members suggested they'd consider a settlement if more money were offered.

But on Tuesday, council members indicated they'll follow Carr's lead.

"He's got a better grip on risks involved," said Councilmember Nick Licata. "We want to keep the team as long as possible, and nothing has really changed."

Nevertheless, both sides could be pressured to settle.

The trial — scheduled for around the time of the NBA championship games — could prove an unwelcome distraction for the league. Carr said his office has subpoenaed NBA financial records and plans to depose NBA Commissioner David Stern or other league officials, along with Sonics owners.

The payoff for the city — apart from the principle of enforcing the lease — may be limited. Even if the city prevails, the Sonics could leave after the lease expires in September 2010. Meanwhile, the team and the city both would likely continue to lose millions each year on the arena.

Still, city officials say a favorable verdict could buy time and leverage for a favorable settlement, such as a promise of a future NBA franchise.

Although state lawmakers refused to authorize taxes for the KeyArena project, they agreed to form a task force to study the funding for next year.

Nickels criticized Gov. Christine Gregoire and lawmakers. "We had hoped this offer would be compelling enough that the Legislature and the governor would embrace it," Nickels said.

Former U.S. Sen. Slade Gorton, who is working as an attorney on the city's KeyArena lawsuit, ripped lawmakers in a written statement.

"In this case, political leaders who should have been a part of the solution were, instead, the problem," Gorton said. "A solution before the April 17 NBA meeting would have given Seattle the maximum leverage either to keep the Sonics or to condition their loss on the immediate creation of a new NBA franchise in Seattle."

Gregoire released a statement saying she was "disappointed that funding could not be found to renovate KeyArena" but "proud of the local ownership group that came forward" with the proposal.

Gregoire said she is committed to keeping an NBA team in Seattle.

Staff reporter Sharon Pian Chan contributed to this report.

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