KeyArena name may stay, but city would get $1M less

Now that the Sonics are gone, the parent company of KeyBank wants to pay $1 million less a year to keep its name atop KeyArena.

Key has paid the city of Seattle $1.3 million annually since 1995, but that contract was automatically canceled when the Sonics left last summer for Oklahoma City. Cleveland-based KeyCorp now is offering $300,000 a year, and under the agreement set to go before the City Council, Key would keep a luxury suite.

The new yearly payment is less than the $500,000 the city first sought, but Councilmember Tom Rasmussen called it "a win-win."

"I think that we're fortunate that we've got a company that's willing to continue to pay to have the naming rights, because we don't have quite the attention to the building that we did when there was a [NBA] basketball team there," Rasmussen said.

Seattle Center, too, is casting the agreement in a positive light. The two-year financial hit would save the city the expense and hassle of taking the KeyArena name and logo off the building and everything else, said Deborah Daoust, a Seattle Center spokeswoman. She said that would cost about $250,000.

"We were really pleased to have the $300,000 from them, because it showed their confidence in the Seattle Center and the Seattle community," Daoust said. "All around, we see this as a really positive thing."

The new contract would run out in 2010. By then, city officials hope to have attracted NBA interest for a replacement team. Mayor Greg Nickels wants to lure a team with a $300 million KeyArena expansion, but needs the Legislature's help in getting the funding.

Sonics owner Clay Bennett paid Seattle $45 million to break the KeyArena lease and move the team to Oklahoma City.

That settlement also called for Bennett to pay Seattle $30 million more in five years if the city doesn't get a new NBA team. But Bennett won't owe that money if the Legislature fails to authorize $75 million toward a KeyArena expansion by year's end.

If and when the city gets a new team, KeyCorp would have the first shot at a new sponsorship agreement.

Daoust said KeyArena is not struggling. It can plan big events, such as concerts, with more flexibility now that it doesn't have to work around the basketball schedule. And the Sonics' settlement money paid off the $30 million debt left on KeyArena's 1995 renovation.

The arena has hired a booking company to help fill its schedule, Rasmussen said.

The naming contract comes before a City Council committee at 2 p.m. today.

Emily Heffter: 206-464-8246 or eheffter@seattletimes.com