Lawsuits in Seattle give Sacramento head start in race to approve an arena

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The question of which city, Sacramento or Seattle, is ahead in the race to bring the NBA a brand new arena attached to a shiny new public subsidy is unclear at this time, but sources with intimate knowledge of the situation tell PBT that so long as Sacramento Mayor Kevin Johnson delivers on his promises that Sacramento will be ahead in that process.

A lot of that comes down where each city is legally within that process, and how that process is conducted in both Washington and California.

While some early media reports might have led folks to believe that Chris Hansen’s arena deal (and offer to buy the team) were a slam dunk, the documents laying out the framework of his arena proposal are under siege.

Specifically, the Memorandum of Understanding (MOU) and Interlocal Agreement (IA) he entered into with the city of Seattle and King County have been under intense scrutiny locally, as they are currently the target of two lawsuits.  The first of those lawsuits is potentially being decided today at 1:30 PT.

The first suit brought by the International Longshoreman’s Workers Union challenges the site selection process within Washington’s Environment Impact Review (EIR) process, saying that Hansen and the local government conducted a “sham” site review process that did not provide reasonable, actionable alternatives other than Hansen’s hand-picked site.

That site, located in Seattle’s SODO district, has been the battleground of competing arguments regarding traffic and how it might impact Port of Seattle’s operations, and otherwise cause gentrification, loss of business in the area, and impact a large number of family-wage jobs in exchange for temporary construction jobs and a smaller number of low-paying arena jobs.

Arena proponents point out that most of the events at the proposed SODO site would occur after the Port’s business hours. Arena opponents say that the cumulative impact of creating a third large-scale sports and entertainment facility within their maritime industrial area, with an L.A. Live-like experience of retail outlets and restaurants, will necessarily bring more traffic to the region regardless of hour and disrupt Port operations.

These kinds of lawsuits are standard fare in any large-scale development project nationally right now, but they can have impacts on developments. In this case, opponents of the current MOU and EIR process point out that it could take “hundreds of millions of dollars” to mitigate the traffic issues a new arena would face, according to head lawyer for the ILWU suit Peter Goldman.

Hansen has offered $40 million to address traffic mitigation concerns, but in reality the question of who pays what for additional mitigation has yet to be solved because the EIR has yet to address the issue. Should Hansen have to pay for additional mitigation, it could further strap him and his group as it relates to their overall offer for the Kings, but the fear for locals is that the money would have to come from the public coffers.

The ILWU’s suit alleges a number of concerns relating to the site selection process, and asks the court to force Hansen and the local government to declare the MOU and IA “null and void” because they are in violation of the State Environmental Policy Act (SEPA).

It is unclear whether or not this would impact Hansen and the local government’s warranties to the NBA about its current arena situation.

(UPDATE: The judge ruled in favor of Hansen, Seattle, and King county and dismissed the lawsuit.  Hansen and governmental officials argued they did not have an arena agreement in place and that they would look at other locations.)

Goldman said that this suit was “preliminary,” and cited the broad swath of industry that is opposing the arena proposal in its current form. He pointed out that there will be more times for lawsuits to be filed down the road, but that he and his client were concerned that the site selection process wasn’t being conducted according to current state laws.

The second lawsuit relates to Seattle’s in-force Initiative 91 and the contention by its co-author Mark Baerwaldt that the current MOU does not meet the law’s criteria.

Baerwaldt is careful to point out that the courts would decide the matter. His complaints focus on the financing mechanisms that Hansen and the local government are using to meet the statute’s definition of turning a profit on public subsidies for sports arenas. This lawsuit is awaiting response from Hansen, Seattle, and King County.

I-91’s other co-author, Chris Van Dyk, has also been at the center of this discussion, being cited by many Seattle media outlets as being supportive of Hansen and Seattle’s MOU. He addressed those reports exclusively with PBT, saying he “never said it was compliant” and that “if he’s the best cheerleader (Hansen and Seattle) can come up with then they’re in trouble.”

Van Dyk also offered that “he’s looking forward to hearing the expert testimony,” because he didn’t think “I-91 anticipated meeting the type of funding mechanism that Hansen has presented.”

Whether or not the Longshoreman’s suit goes in favor of the plaintiff or Hansen and Seattle, Goldman says to expect more legal resistance down the road.  If they win, Hansen and Seattle has to start over with their MOU and come to the table with alternative sites that they may not like.  Then the city would have to choose between the site that Hansen wants, and a potential site that presents better alternatives in terms of environmental concerns and traffic.

If they lose today, he says that there is a “significant appetite” not just by his clients but a broad swath of industry including the Port of Seattle to appeal the decision and fight the EIR process at every stage. All of the potential delays and injunctions were reflected when David Stern told Jonathan Feigen of the Houston Chronicle that the NBA had “no approved plan for an arena in Seattle.”

Therein lies the rub for the Seattle group. While they seek to convince the BOG that they have an actionable arena plan, they are arguing in court that their MOU and IA just lay out a process for reviewing and financing an arena proposal and do not constitute an ‘action’ under state EIR laws. Therefore, they contend that the Longshoreman’s suit is not “ripe” and are asking for it to be thrown out.

Sources with intimate knowledge of the situation tell PBT that this is a tightrope that the Seattle group can walk, and Scott Howard Cooper of NBA.com illustrated that point by saying the league isn’t overly concerned with legal issues in either Seattle or Sacramento, but the question goes back to points made by TNT’s David Aldridge about which city can get an arena deal done first.

Aldridge, who had previously reported Seattle had a “clear path” to obtaining the Kings, said on Saturday “there are questions about whether or not the Seattle deal is as airtight as they say it is.”

After Stern’s press conference on Saturday Aldridge elaborated, “We have very equal bids here. What it comes down to is the feel the owners have on ownership groups, and which arena can be built the fastest.”

The EIR process in Seattle is underway, but with two lawsuits pending and only the judges in both suits being capable of delivering an up-or-down answer to the litany of issues presented, the uncertainty over what type of delays Seattle could face and what type of mitigation will be needed to preserve other parties’ rights are huge question marks.

On the other side, it’s Johnson’s track record of delivering on promises to the NBA that has insiders optimistic about Sacramento’s chances of delivering that ‘fair and competitive’ offer that will include a significant public subsidy and downtown arena.

That effort has been underway for a while now, as the NBA negotiated the current arena deal that the Maloofs backed out of, a deal that Johnson and Sacramento have maintained is still on the table.

Additionally, proposed arena locations in Sacramento aren’t likely to have the same types of blowback being faced in Seattle, where their sizable maritime industrial economy feels threatened by Hansen’s proposal.

One source with intimate knowledge of the situation speaking to PBT under conditions of anonymity spoke about Sacramento’s pair of proposed locations:

“Both potential Sacramento sites are complimentary to the existing downtown commercial uses, and unlike the fight in Seattle the downtown proposals are being welcomed as a revitalization project. Both are efficient reuses of developed property, and both sites qualify under the expedited state AB 900 CEQA process, which limits the delay from any potential lawsuits. Having already approved a deal structure a year ago with no lawsuits filed, Sacramento has a big advantage to deliver a timely arena facility.”

That AB 900 CEQA process is an interesting wrinkle to Sacramento’s effort to keep their team, as the bill creating that process was recently signed into law and co-authored by Think Big Sacramento supporter and California Senate President pro Tem Dan Steinberg. According to law firm Stoel and Rives:

“The (bill provides) an incentive for applicants to move forward with their projects because any challenge to a leadership project Environmental Impact Report (“EIR”) under the California Environmental Quality Act (“CEQA”) will be venued immediately in the Court of Appeal. The court will then have a maximum of 175 days to issue its decision on the challenged EIR”

Incidentally, the bill was passed in part to help facilitate the potential Farmer’s Field deal to bring NFL football back to L.A. The company driving that proposal is AEG, who is supporting Sacramento’s bid and being pursued for purchase by Ron Burkle, who is one of the ‘whales’ that reportedly stands behind Sacramento’s offer.

“It’s time for big thinking and big projects that put Californians back to work,” said California Governor Brown. “Projects like Farmers Field can create thousands of jobs during a tough economic time, so it is imperative for the state to cut the red tape that could delay projects like this for years. These bills strike the right balance between protecting our environment and kick-starting jobs and investment in California.”

Sources say NBA owners will be weighing the totality of the arena timelines for both sides, and in Seattle’s case how many years a potential Sonics team will have to play at Key Arena, a facility deemed by the NBA to not meet its standards when the Sonics left for Oklahoma City in 2008.

Hansen’s current plan calls for a potential Sonics team to play in Key Arena (with modest improvements) for as little as two years, while arena opponents believe that timeframe could be extended to as many as four years if lawsuits hold up the process. While Sacramento could face similar lawsuits, they didn’t face any during the 2011 arena deal, and the expedited review process and potential for less environmental concerns at the city’s proposed sites have sources pointing at the issue as a point in favor of Kevin Johnson’s expected proposal.

While Seattle’s lawsuits aren’t likely to be the defining factor in this saga – Sacramento’s production of an actionable offer will be that factor –the fact that the Emerald City can’t say with certainly how long they’ll be locked up at Key Arena could be the starting point for their bid to take the Kings to unravel.

Cavaliers try to convey confidence amid their own star crisis (crises?)

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Cavaliers owner Dan Gilbert said the Pacers could have done better in their Paul George trade – a bold (though correct) public critique from someone who had to apologize for his handling of the last time he lost a star and is staring down the prospect of losing another star this summer and the original star again next summer.

What was supposed to be a press conference introducing new general manager Koby Altman today predictably turned into an examination of Kyrie Irving‘s trade request and LeBron James2018 free agency.

“This thing is not broken,” said Altman, who takes over a team that has reached three straight NBA Finals – winning the 2016 title – but now faces immense peril.

Both Gilbert and Altman kept their assessments of Irving’s trade request close to the vest, not even confirming it occurred. But even NBA commissioner Adam Silver has said he assumes reports of Irving’s request are accurate.

Gilbert said he planned to call Silver, clearly part of an attempt to project stability. That was the transparent underpinning of the entire press conference, which included Gilbert saying he felt better about hiring Altman than any prior general manager. The plan went awry when Gilbert stumbled through an answer about why he’s never given a general manager a second contract and why the Cavs couldn’t lure Chauncey Billups, who turned down leading the front office and later said he knew of Irving’s discontent and labeled it “alarming.”

But Gilbert did give his assessments on the franchise’s biggest issues.

On LeBron’s future beyond this season: “We do not control all the cards we get dealt.”

On whether Irving will be in training camp: “Right now, Kyrie Irving is under contract with the Cleveland Cavaliers for two or three years, depending on the last year. So, as of now, he’s one of our best players. Sure, we expect him to be in camp.”

In context, Gilbert sounded as if he was merely saying he expected every Cavalier under contract to be in training camp until their contract status changed – not that he was predicting Irving wouldn’t be traded this offseason.

All reports are that the Cavs are proceeding as if they’ll trade Irving, though Gilbert also brought Kobe Bryant’s infamous 2007 trade request. Kobe and the Lakers reconciled, and he won two more titles in Los Angeles.

“I’m not saying that that happens here,” Gilbert said. “But the possibilities of what will happen are wide.”

The Cavs at least left the door open publicly for Irving returning. Altman downplayed any animosity between the team’s stars, echoing LeBron’s tweets. But Irving’s issues with LeBron appear to be deeper and different than face-to-face resentment, and this summer’s saga hasn’t necessarily helped.

Altman called LeBron “deeply committed to this team and deeply committed to this city” and Irving a “core piece of who we are and what we do.”

Yet, the new general manager wanted to expand discussion beyond those two.

“It’s interesting,” Altman said. “We’ve had an active offseason that I wish some of you would talk more about, in terms of what we’ve done.”

The offseason LeBron reportedly deemed frustrating?

Altman gets a pass for David Griffin’s departure, which clearly rankled LeBron. But Cleveland’s signings – Derrick Rose, Kyle Korver, Jeff Green, Jose Calderon, Cedi Osman – leave plenty to be desired, especially as the Warriors load up. A championship looks even further from Cleveland.

With the goal so high and future so turbulent, Gilbert and Altman faced an uphill battle in projecting stability today. Luckily for them, this isn’t the true measure of success.

But things that matter far more – navigating Irving’s trade request, re-signing LeBron – might not be much easier.

Watch the top 60 clutch shots from last NBA season

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It’s that time of the year when there is no basketball, so we fill the time with idle Kyrie Irving speculation and video highlights of last season.

Along those lines, above you can out the top 60 clutch shots from last season, as determined by the folks at NBA.com.

The great thing about the clutch shot list is the ball is in the hands of stars at the ends of games, so there is plenty of Russell Westbrook, John Wall, LeBron James, Devin Booker, Kevin Durant and more. Personally, I would have switch No. 1 and No. 2 on the list, but it’s all fun to relive.

Cavaliers owner Dan Gilbert: Pacers ‘could have done better’ on Paul George trade

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Kyrie Irving has requested a trade. LeBron James could leave next summer. The Cavaliers keep churning through general managers, the newest – Koby Altman – the reason for today’s press conference.

But Cavs owner Dan Gilbert looked past his own team’s turmoil and potential turmoil to take a shot at the Pacers, who traded Paul George to the Thunder for Victor Oladipo and Domantas Sabonis.

“I will say Indiana could have done better than they did,” Gilbert said after Altman refused to directly address a question about George trade talks and shifted the discussion elsewhere.

This didn’t strike me as Gilbert trying to distract from Cleveland’s troubles. He just seemed to want to take a shot at a foe, something he’s no stranger to doing. The Cavaliers are particularly salty about their trade offer for George, which included Kevin Love, not being accepted.

For what it’s worth, Gilbert is right. The Pacers should have done better. Oladipo is now on a lucrative contract extension, and Sabonis spent his rookie season showcasing the reasons people doubted him the draft. That’s a piddling return for a star, even one on an expiring contract with dreams of joining the Lakers.

Report: Kings meet with former Magic GM Otis Smith about front-office job

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The Kings lost Scott Perry to the Knicks, so Sacramento is seeking someone else to aid Vlade Divac in the front office.

Adrian Wojnarowski of ESPN:

Former Orlando Magic general manager Otis Smith has met with Sacramento Kings officials about the franchise’s vacant vice president of basketball operations job, league sources told ESPN.

Smith has plenty of experience, which Divac lacks. But it’s not all good experience.

Running the Magic, Smith made numerous errors – including drafting Fran Vazquez (who has never played in the NBA) No. 11, overpaying Rashard Lewis and then trading Lewis for Gilbert Arenas’ even worse contract. If Smith’s Orlando tenure is predictive, he’ll indulge the Kings’ worst tendencies to mortgage the future for the present.

That said, Smith might have learned from his time with the Magic (though working under Stan Van Gundy with the Pistons the few couple years isn’t exactly the best place to hone long-term-planning skills). What amounts to an assistant general-manager role might be a better fit for him, too.

Usually, this opening wouldn’t garner so much attention. But Perry was lavished with praise for Sacramento’s offseason, raising the profile of this job – which already carried relative prominence. The No. 2 in the Kings’ front office is now perceived, somewhat fairly, as more important than the typical assistant general manager.