Clay Bennett Letter to Governor of Washington
The recently-sold Seattle Sonics are currently examining options to keep the team in Washington. InsideHoops.com was given a copy of a letter sent today by Clay Bennett, chairman of the Seattle Supersonics and Storm ownership group, to Chris Gregoire, Governor of the state of Washington.
For all you skim-readers, we repeat: This is a letter from Bennett to Washington's governor. InsideHoops.com didn't write it. Bennett did:
Dear Governor Gregoire
We appreciate the time and interest you have devoted to our effort to
find an acceptable new home for the Sonics and Storm in the region.
From the outset, you recognized that the region needs to develop a
world class multi-purpose arena to serve as a home for major sporting
events, concerts, large conventions and large corporate meetings.
Virtually every tier-one community in the country has already built
such a facility or is in the process of doing so.
We believe the potential for such a venue extends far beyond
professional basketball and has the opportunity to benefit the entire
region. An excellent example was the news last week that Denver was
chosen as the site for the next Democratic National Convention to be
held at the Pepsi Center, which is an example of the kind of facility
we are proposing here in Puget Sound.
Since assuming ownership of the Sonics and Storm on November 1, we have
tried to work as quickly as possible to develop a reasonable proposal
that will meet the needs of both the teams and the region. Our group
has retained ICON Venue Group and HOK Sport to help shape the vision
for the new facility and provide a reasonable estimate of the costs for
this multi-purpose complex.
We have said since the very beginning that we want to develop a
financing model that is fair to all parties, and which would include
the ability for us to make a reasonable return on our investment over
As we have explained to you in our discussions, the complexity of the
project is greater than even we anticipated. In addition to working
with the cities that might be the site of this building, we have also
worked with a number of stakeholders, including major employers in the
region. These stakeholders have uses for the building but also want to
ensure that it is appropriately located to best meet their needs and
not disrupt regional transportation corridors. Finally, we have been
confronted by construction costs that are rising on a daily basis and
have made the project more expensive than other recent arenas.
We currently are considering two sites: one in Renton near "The
Landing," the City's new mixed-use retail and housing development, and
the other near the Bellevue central business district in an area known
as "auto row." Both sites have significant advantages and challenges.
We continue working with both City governments in an effort to
determine the most acceptable location for a major arena. Both cities
are now considering whether such a project is an acceptable use for the
future of their city.
From the work that has been done by our architects and consultants, we
estimate that the cost of the building itself will be between $340
million and $360 million. That does not include the cost of the land,
parking and infrastructure, which we estimate could add $150 million to
$170 million more to the project. We are working with both
municipalities on ideas that could help to contain the costs for
parking and infrastructure to bring down the total cost of the project.
The building itself would be between 700,000 and 800,000 square feet
and would seat at least 18,000 for basketball. In addition it would be
designed so it could accommodate NHL Hockey, Arena Football, concerts
and large meetings or conventions. It is likely that in whichever
location it is built it will encourage the development of one or more
hotels near the facility that would need to be built with private
Since the beginning we have anticipated forming a Public Facilities
District similar to the ownership structure of Safeco Field and Qwest
Field. Initially we held the view that the Sonics ownership group
should operate and control the building; however, it has become clear
that the Sonics are really only one tenant in a much larger building
project. As a result we are now also evaluating operating structures
that share both the decision-making and any revenue that comes from the
building. We are still exploring how best to structure an approach
that could work for all parties. We would very much appreciate input
from you and King County officials about thoughts on an acceptable
To make this project work, it is clear that we will need at least $300
million in revenue sources authorized by the state. These would be
taxes collected only in King County and would also require the approval
of the King County Council and Executive. This would largely include
using revenue sources that were used for Safeco Field, Qwest Field and
the Kingdome, including the restaurant tax and the rental car tax.
These are taxes that are already in place and will be available because
of the early retirement of bonds for the other facilities. We also
acknowledge that some of these fund sources will need to be reserved
for the arts in King County.
It has also become clear that the City where the multipurpose facility
is located will need to make an investment against revenues that will
be returned to it through increased economic activity in the City as a
result of the arena.
Finally, as we have said all along, there will need to be a private
investment in the new arena. There are several factors that keep us
from providing you an absolute number on the amount of private
investment today. There is still a great deal of modeling going on
about the potential financial return of the building and the benefit it
will provide the team. My obligation to the Sonic ownership group is
that I not enter into any transaction that does not give us at least a
fair chance to earn a reasonable profit over time.
The amount of our contribution is made more complex by the financial
realities of a team with a non-economic lease and poor financial
performance that will likely lead to losses of $50 million or more
before we can get into a new arena. The magnitude of those losses has
to impact the amount we can contribute toward an arena.
However, we do recognize that for the project to move forward there is
a need for a significant private contribution and we are continuing to
do the work that will allow us to come forward with an acceptable level
of contribution to a new arena. We clearly would not ask the
Legislature to take final action or King County to authorize any taxes
for an arena until we could clearly define the extent of private
There are many issues that need to be resolved before we can ask the
Legislature to act. However, we wanted to provide this update of our
thinking on this arena project for you and the Legislature to consider.
Regardless of whether the Sonics are a tenant in a new facility, it is
only a matter of years before there will be general recognition that a
complex like we are proposing is needed in the region. The Sonics can
be an important part of making the building work for the community.
We need to resolve the future of the Sonics. We are doing all we can to
ensure the team has a future in this region. We feel the same need to
get the team's future location resolved so that we can devote full
attention to improving on court performance.
While we have helped give some clarity to the potential of this
project, it is now in the hands of the two local governments we have
identified to determine if the Sonics and the construction of a
multi-purpose facility have a role in the future of their City. Each
City has worked with us cooperatively up to this point and now must
make independent decisions about whether it is in their interest to
We appreciate the support and guidance you have provided us. We expect
to provide a definitive proposal as soon as practicable and keep you
aware of all new developments.
Clayton I. Bennett, Chairman
Professional Basketball Club, L.L.C.
Cc: Senator Lisa Brown
Speaker Frank Chopp
Senator Margarita Prentice
Senator Mike Hewitt
Representative Richard DeBolt
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