14 March 2008
Are you a good lease or a bad lease?
Seattle SuperSonics owner Clay Bennett and NBA Commissioner David Stern are in apparent agreement over what constitutes a bad lease, and if you ask either of them, they'll point in the general direction of KeyArena. Inevitably, you have to wonder: what would they consider a good lease?
The Letter of Intent sent by Bennett to Mayor Cornett [link goes to PDF file] gives a hint. The Sonics are looking for a 15-year lease, to begin "no sooner than the 2008-09 NBA season and no later than the 2010-11 NBA season." I doubt seriously that it will begin as soon as this fall, but we shall see. The lease would be extensible in 3-year increments up to an additional 15 years.
The Sonics will pay rent of $40,000 per game, 70 percent of which is identified as "game-day expenses" based upon an expected performance standard, and all of which is subject to CPI adjustments after years 5 and 10. For a 41-game season, this comes to $1.64 million; exhibitions and playoff games are extra. In addition, the team will pay $100,000 a year for rent on the practice facility and will assume responsibility for routine maintenance, repairs, utilities and insurance on that facility.
The city will be expected to renegotiate the naming rights for the Ford Center with the team and the Oklahoma Ford Dealers. The team will pay the city the amount of the current agreement $409,000 a year and will receive the proceeds from any new agreement, less any expenses incurred by the city in changing signage and stationery and such.
And in a move I didn't expect, but perhaps could have predicted, the team and the city will attempt to wangle state incentives under the Quality Jobs Act.
There's a lot more, but all of it is subject to negotiation before the signatures are affixed. City Manager Jim Couch, at least, thinks it's a fair deal. No word yet from David Stern.Posted at 6:08 PM to City Scene , Net Proceeds