Sonics' settlement money most likely to be used to pay off KeyArena debt

The $45 million settlement the city received when the Professional Basketball Club moved the Sonics to Oklahoma City could be used mainly to pay off debt at KeyArena and make up for money lost because of canceled games.

About $2.8 million of the money will pay legal fees in connection with the case.

City Finance Director Dwight Dively told City Council members that $2.3 million will be set aside for improvements to Key Arena and $3.8 million will be used for other Seattle Center projects that will be detailed when the mayor releases his 2009-2010 budget next week.

Another $1.4 million will be used to replace money the city was expecting in revenue had the Sonics played in Seattle this fall. The remaining $500,000 will offset losses at Seattle Center expected because events couldn't be booked to fill the vacant dates left by the NBA basketball team.

Mayor Greg Nickels will detail some of the projects at Seattle Center as part of his proposed 2009-2010 budget.

The city agreed in July to accept the money from Clay Bennett's Professional Basketball Club in exchange for the right to move the NBA team immediately to Oklahoma City rather than remain in Seattle through the 2009-10 season.

The city will get another $30 million in five years if the Legislature approves money to renovate KeyArena but no NBA team moves to Seattle.

The biggest chunk is $34.2 million being used to pay off the debt from remodeling KeyArena years ago. Dively said the lump sum is a bonus for Seattle taxpayers because the city was on the hook for five years of debt payments that weren't going to be covered under the Sonics lease.

Considering the sagging economy and market upheaval recently, Dively said it makes sense to pay the debts rather than invest the money.

"If we pay off the debt, we remove the liability from our books," he said.

The City Council is expected to vote on the uses for the money over the next couple of weeks.

Last spring, the city sued Bennett's basketball club to force it to uphold the final two years of the Sonics' KeyArena lease. The two sides eventually settled, agreeing to let the team move immediately to Oklahoma City in exchange for the guaranteed $45 million.

Former Sonics owner Howard Schultz has also dropped his lawsuit against Bennett.