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

15 Comments

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.

Nets reportedly sign Donta Hall for restart games in Orlando

Barry Gossage/NBAE via Getty Images
Leave a comment

Donta Hall went undrafted out of Alabama last June, then made the most of the opportunities he was given. The 6’9″ big man tore up the G League for the Grand Rapids Drive, averaging 15.4 points a game on 66.9% shooting, plus gabbing 10.6 rebounds a night. It was good enough to get him a call up to the Pistons and getting in four games for them.

Now he’s going to play in the NBA restart for the Brooklyn Nets, a story broken by Marc Stein of the New York Times.

The shorthanded Nets are without big men DeAndre Jordan, Taurean Prince, and Nicolas Claxton (Jarrett Allen was the only center on the roster). Donta Hall will get the chance to impress the Nets — and other teams — and try to earn a contract for next season (he will be a free agent when the Nets are eliminated).

Hall is a tremendous athlete, he’s bouncy and long (7’5″ wingspan). If his skills develop, he has a role in the NBA.

The Nets were hit hard by injuries and had to make substitute signings such as Jamal Crawford and Michael Beasley. Here is what the final Nets roster looks like in Orlando.

After four months off, first NBA teams practice in restart bubble

oe Murphy/NBAE via Getty Images
Leave a comment

ASSOCIATED PRESS — Nikola Vucevic had to raise his voice a bit to answer a question. He had just walked off the court after the first Orlando Magic practice of the restart, and some of his teammates remained on the floor while engaged in a loud and enthusiastic shooting contest.

After four months, basketball was truly back.

Full-scale practices inside the NBA bubble at the Disney complex started Thursday, with the Magic — the first team to get into the campus earlier this week — becoming the first team formally back on the floor. By the close of business Thursday, all 22 teams participating in the restart were to be checked into their hotel and beginning their isolation from the rest of the world for what will be several weeks at least. And by Saturday, all teams should have practiced at least once.

“It’s great to be back after four months,” Vucevic said. “We all missed it.”

The last eight teams were coming in Thursday, the Los Angeles Lakers and Philadelphia 76ers among them. Lakers forward LeBron James lamented saying farewell to his family, and 76ers forward Joel Embiid — who raised some eyebrows earlier this week when he said he was “not a big fan of the idea” of restarting the season in a bubble — showed up for his team’s flight in what appeared to be a full hazmat suit.

“Just left the crib to head to the bubble. … Hated to leave the (hashtag)JamesGang,” James posted on Twitter.

Another last-day arrival at the Disney campus was the reigning NBA champion Toronto Raptors, who boarded buses for the two-hour drive from Naples, Florida — they’ve been there for about two weeks, training at Florida Gulf Coast University in Fort Myers — for the trip to the bubble. The buses were specially wrapped for the occasion, with the Raptors’ logo and the words “Black Lives Matter” displayed on the sides.

Brooklyn, Utah, Washington and Phoenix all were down to practice Thursday, along with the Magic. Denver was originally scheduled to, then pushed back its opening session to Friday. By Saturday, practices will be constant — 22 teams working out at various times in a window spanning 13 1/2 hours and spread out across seven different facilities.

Exhibition games begin July 22. Games restart again for real on July 30.

“It just felt good to be back on the floor,” said Brooklyn interim coach Jacque Vaughn, who took over for Kenny Atkinson less than a week before the March 11 suspension of the season because of the coronavirus. “I think that was the most exciting thing. We got a little conditioning underneath us. Didn’t go too hard after the quarantine, wanted to get guys to just run up and down a little bit and feel the ball again.”

Teams, for the most part, had to wait two days after arriving before they could get on the practice floor.

Many players have passed the time with video games; Miami center Meyers Leonard, with the Heat not practicing for the first time until Friday, has been giving fans glimpses of everything from his gaming setup to his room service order for his first dinner at Disney — replete with lobster bisque, a burger, chicken strips and some Coors Light to wash it all down.

The food has been a big talking point so far, especially after a handful of players turned to social media to share what got portrayed as less-than-superb meals during the brief quarantine period.

“For the most part, everything has been pretty good in my opinion,” Nets guard Joe Harris said. “They’ve done a good job taking care of us and making sure to accommodate us in every area as much as possible.”

Learning the campus has been another key for the first few days, and that process likely will continue for a while since teams will be using all sorts of different facilities while getting back into the practice routine.

“We have to make the best out of it,” Vucevic said. “You know, this is our job. We’re going to try to make the best out of it. I really think the NBA did the best they could to know make this as good as they can for us. And once we start playing, you’re not going to be thinking about the little things.”

Zion Williamson’s stepfather accused of taking $400,000 before Zion’s season at Duke

Rocky Widner/NBAE via Getty Images
Leave a comment

ASSOCIATED PRESS — The legal fight over NBA rookie Zion Williamson’s endorsement potential now includes an allegation that his family received $400,000 from a marketing agency before his lone season for Duke.

Prime Sports Marketing and company president Gina Ford filed a lawsuit last summer in a Florida state court, accusing Williamson and the agency now representing him of breach of contract. That came a week after Williamson filed his own lawsuit in a North Carolina federal court to terminate a five-year contract with Prime Sports after moving to Creative Artists Agency LLC.

In court filings Thursday in North Carolina, Ford’s attorneys included a sworn affidavit from a California man who said the head of a Canadian-based firm called Maximum Management Group (MMG) told him he paid Williamson’s family for his commitment to sign with MMG once he left Duke for the NBA.

The documents include a marketing agreement signed by Williamson with MMG from May 2019, a December 2019 “letter of declaration” signed by Williamson and his stepfather agreeing to pay $500,000 to MMG president Slavko Duric for “repayment of a loan” from October 2018, and a copy of Williamson’s South Carolina driver’s license — which listed Williamson’s height as “284” and his weight as “6′06.”

In a statement to The Associated Press, Williamson attorney, Jeffrey S. Klein, said those documents were “fraudulent.”

“The alleged ‘agreements’ and driver’s license attached to these papers are fraudulent – and neither Mr. Williamson nor his family know these individuals nor had any dealings with them,” Klein said. “We had previously alerted Ms. Ford’s lawyers to both this fact and that we had previously reported the documents to law enforcement as forgeries, but they chose to go ahead with another frivolous filing anyway.

“This is a desperate and irresponsible attempt to smear Mr. Williamson at the very time he has the opportunity to live his dream of playing professional basketball.”

The affidavit is from Donald Kreiss, a self-described entrepreneur who worked with athletes and agents in marketing relationships. He had recently contacted Ford then provided the affidavit last week outlining interactions with MMG and Williamson’s family, according to one of the filings.

Ford’s attorneys have sought to focus on Williamson’s eligibility. His lawsuit stated that Prime Sports violated North Carolina’s sports agent law, both by failing to include disclaimers about the loss of eligibility when signing the contract and the fact neither Prime Sports nor Ford were registered with the state.

Ford’s attorneys have argued the Uniform Athlete Agents Act wouldn’t apply if Williamson was ineligible to play college basketball from the start.

Ford’s attorneys had sought to have last summer’s No. 1 overall NBA draft pick and New Orleans Pelicans rookie answer questions in Florida state court about whether he received improper benefits before playing for the Blue Devils. They had also raised questions about housing for Williamson’s family during his Duke career in a separate filing in North Carolina.

A Florida appeals court last month granted a stay to pause the proceedings there, shifting the focus to the North Carolina case.

Duke has repeatedly declined to comment on the case because it isn’t involved in the litigation, but issued a statement in January that school had reviewed Williamson’s eligibility previously and found no concerns.

Russell Westbrook, James Harden do not fly to Orlando with Rockets, will join team later

Russell Westbrook James Harden
Bill Baptist/NBAE via Getty Images
Leave a comment

The Houston Rockets have landed in Orlando to be part of the NBA’s restart bubble.

Except for stars Russell Westbrook and James Harden. Neither was on the team’s charter flight from Houston, but both plan to join the team soon. Shams Charania of The Athletic broke the news, with the story confirmed by others soon after.

Just-signed Luc Mbah a Moute and assistant coach John Lucas also did not fly with the team and will catch up soon, reports Jonathan Feigen of the Houston Chronicle.

Westbrook and Harden are not the only stars to delay their arrival in Orlando, the Clippers Kawhi Leonard did the same for personal reasons. The teams have agreed to this, but with limited practice time in the run-up to the eight seeding games, coaches want everyone in camp to work on rebuilding chemistry as fast as possible.

Coach Mike D’Antoni did fly with the team and was cleared to be in the bubble. D’Antoni, 69, was subject to extra consideration for entrance into the bubble by the NBA due to his age and the risk factors for people older than 65 with COVID-19.

The Rockets are one of the most interesting teams to watch in Orlando because of their all-in commitment to small ball — 6’5″ P.J. Tucker will play a lot of center. In the uncertain world of the NBA’s restart, that unconventional approach could get them upset wins. Or, they could get bounced early. There is no more high-variance team in Orlando than the Rockets.