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.

Report: Lakers feel they got played in Kawhi Leonard pursuit

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The Raptors reportedly felt Kawhi Leonard‘s advisor and uncle, Dennis Robertson, made unreasonable requests of them before Leonard signed with the Clippers.

The Lakers, the other team that waited for and missed out on Leonard, also apparently has misgivings about the process.

Brian Windhorst of ESPN:

I’ve heard complaints in the days after the signing. I heard complaints from the Lakers that they got played. I heard complaints from the Raptors that Kawhi came in and asked for the sun, the moon, the stars then left them at the altar.

The implication: Leonard knew all along wasn’t signing with the Lakers, waited a week into free agency so other top free agents would commit elsewhere then announced his decision just to sabotage the Lakers.

I don’t think Leonard did that. That’d be so calculating and sinister.

But I don’t know. We really don’t have much insight into how the famously secretive Leonard operates. I can’t rule it out.

Also, if Leonard did execute a devious plan to spite the Lakers, it’d look a lot like his actual free agency went.

Of course, nobody forced the Lakers to wait a week for Leonard. There had been longstanding reports Leonard didn’t want to play with LeBron James. The Lakers could have followed the Knicks model of dropping the Leonard pursuit to sign other players.

This is the calculus small-market teams must do frequently. They often bow out of star races, lacking confidence about succeeding.

The Lakers (often incorrectly) believe they can get anyone.

In this case, they were correct to chase Leonard until the end. He’s that big of a prize. Leonard is arguably the NBA’s best player. He can transform any franchise. The Lakers could also offer Leonard his desired Southern California locale and an opportunity to inform an incredible top trio with LeBron and Anthony Davis. For better or worse, that differentiated the Lakers from the Clippers.

The plan just didn’t work. Getting to the Clippers was clearly Leonard’s priority. He convinced George to join him, even moving a meeting with the Lakers so he could meet nearby with George unseen. That probably adds to the Lakers’ suspicion.

I don’t mind the Lakers venting. It must have been frustrating to miss out on Leonard.

Most importantly, they took care of business in the aftermath. The Lakers signed some good role players, chiefly Danny Green.

Their roster would likely look better now if they never pursued Leonard. But that opportunity cost was absolutely worth the potential upside of landing Leonard.

Report: Celtics complained about 76ers tampering with Al Horford

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Kyrie Irving was thinking about leaving the Celtics in December, according to Nets guard Spencer Dinwiddie. Rumors of Irving leaving Boston had gotten so intense by February, he practically admitted he was open to leaving. Even Celtics president Danny Ainge said he got the impression by March or April that Irving could leave. By early June, it was apparent Irving wouldn’t re-sign. By mid June, it was clear he’d sign with Brooklyn. Irving announced July 1, the second day of free agency, he chose the Nets.

Al Horford‘s exit from Boston came more suddenly.

He declined a $30,123,015 player option that had to be exercised by June 18. The Celtics were on board with that, hoping to re-sign him to a long-term deal, presumably with a cheaper starting salary but more overall compensation. But the same day, a report emerged he’d leave Boston. Horford reportedly believed a four-year, $100 million contract awaited him in free agency. On the first day of free agency, he agreed to a four-year deal with the 76ers that guarantees $97 million and could be worth $109 million.

Brian Windhorst of ESPN:

The Celtics were, from what I am told, one of the teams that kind of stomped their feet about what they felt was tampering. Not with Kyrie, although that looked like it was lined up pretty far in advance. But with Horford. What happened with Horford – again, from what I am told – really upset the Celtics, that they were thinking they were going to be able to negotiate with him, talk to him about a new contract, and all of a sudden, it was like he already knew what his market was and was out of there.

The Celtics are hypocrites.

By June 26, Boston had become clear favorite to sign Kemba Walker. By June 29, he had reportedly told the Hornets he’d sign with the Celtics.

Again, free agency began June 30.

How does that happen without Boston tampering?

This is the game. Teams are generally clear to talk to players after the season, even though that’s technically against the rules. The Celtics cut the same corners as nearly everyone else. It’s ludicrous for Boston to complain about Horford’s departure, as if Walker didn’t arrive the same way.

The NBA hasn’t announced any fine for Philadelphia. But the league doesn’t announce all tampering violations.

NBA commissioner Adam Silver is correct: This system is broken. The league’s tampering rules are vague and arbitrarily enforced. The NBA should set realistic rules then enforce them fully.

Rumor: Marcus Morris left agent Rich Paul over backing out of Spurs deal to join Knicks

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Thes are the facts on the ground: Powerful agent Rich Paul negotiated a two-year, $20 million contract for Marcus Morris with the Spurs, and he verbally agreed to it. The Spurs made a series of moves to clear out the cap space to honor that agreement. However, by the time the moratorium ended and players could sign deals, Morris had started to move on and soon reached a new, one-year, $15 million contract with the Knicks. A few days later, Morris and Paul parted ways.

Now the rumors are starting to come in around how that went down.

The buzz at Summer League was Morris was disappointed with the market for his services, which he thought would be more robust. He took the Spurs offer that Paul set up, but when the Knicks came with $5 million more per year on a one-year deal — which makes Morris a free agent again in a much weaker class next summer — he wanted it. Paul, however, was not part of those talks and urged him to stick with the original Spurs deal, according to Marc Berman of New York Post.

Morris’ super-agent, Rich Paul, was not involved directly in Morris breaking his verbal agreement with the Spurs, according to a source, and the Knicks and Morris worked on a new deal together. The source reports Paul preferred Morris stick to his original agreement and the two are headed toward a breakup over the incident.

Morris’ move did not sit well with teams executives I spoke to at Summer League. Not because he backed out of a deal, that does happen (it’s not common, but it’s not unheard of), but because in this case the Spurs moved on from Davis Bertans and made roster moves to clear the cap space for Morris they would not otherwise have made.

Morris has made a bet on himself that there is a bigger, better contract for him next summer after he puts up numbers in New York (plus he gets $5 million more this season). We’ll see how that plays out.

Reports: Tristan Thompson will not play for Canada at World Cup; Rui Hachimura will play for Japan

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With national teams getting close to heading to training camp for the FIBA World Cup (which starts at the end of August), rosters are starting to shake out. For example, we know Anthony Davis will not play for Team USA, and Ben Simmons is out for Australia.

Now comes some more updates.

First, big man Tristan Thompson will not suit up for Canada, reports Shams Charania of The Athletic.

Canada will still field a team made up almost entirely of NBA players. They should have a deep run in the World Cup.

Meanwhile, Wizards rookie Rui Hachimura will suit up for Japan, according to the Wizards official website.

Now, his attention turns to the 2019 FIBA World Cup, where Hachimura will lead the Japanese national team ahead of the 2020 Summer Olympics in Tokyo.

The FIBA World Cup tips off August 31 in China, and is not only the world championship but this time around also the primary qualifier for the 2020 Olympics in Tokyo.

Close to home, USA Basketball is scheduled to begin its pre-World Cup camp in Las Vegas Aug. 5, with an intrasquad exhibition game at the T-Mobile Arena on Aug. 9. Then the team heads to Southern California for more training followed by an exhibition against Spain on Aug. 16 at the Honda Center in Anaheim, Calif.