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: NBA ‘snitch’ hotline receiving multiple tips

NBA snitch hotline
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When the NBA created a hotline for players to anonymously report violations inside the bubble, numerous questions emerged. How often would it get used? What consequences would told-on players face? Would other players resent how often Chris Paul called?

Some answers are emerging.

Shams Charania of The Athletic:

Kings center Richaun Holmes and Rockets forward Bruno Caboclo are each quarantined after breaking protocols. It’s unclear how their violations were detected.

Yes, there is a culture against snitching. That this report is snitching about snitching is truly something.

But there’s too much at stake – health of hundreds of people and a lot of money – to take these protocols lightly. Everyone at the NBA’s Disney World campus is entrusting their safety (and, for players, whose salaries are tied to revenue, livelihood) to those around them. It’s important everyone involved acts responsibly.

Kings forward Harrison Barnes tests positive for coronavirus

Kings forward Harrison Barnes
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The Kings have been hit especially hard by coronavirus.

Buddy Hield, Jabari Parker and Alex Len all tested positive. Richaun Holmes is quarantined after violating the NBA’s bubble protocols at Disney World.

And now Harrison Barnes reveals he was diagnosed with coronavirus.

Harrison Barnes:

Presumably, Barnes was among the 19 players the NBA announced tested positive for coronavirus in July in home markets.

“Primarily asymptomatic” is a strange assessment. Does Barnes mean he’s mildly symptomatic?

The Kings already faced an uphill climb for making the playoffs. At best, several of their players are falling behind in training. At worst, Sacramento will have its rotation depleted when games begin.

Hopefully, Barnes recovers and joins the team as he hopes. He has a personal stake in it. Even during the lengthy hiatus, Barnes stuck with his pledge not to shave or cut his hair until the Kings reach .500 (or, as he amended it, make the playoffs) or the season ends.

Report: Pacers star Victor Oladipo’s remaining salary in dispute

Pacers star Victor Oladipo
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Among the continuing 22 NBA teams, players not playing in the resumption at Disney World essentially fall into two categories:

Pacers star Victor Oladipo lands in the gray area.

Oladipo, who returned from a year-long absence shortly before the season got suspended in March, said he was sitting out due to elevated risk of injury during a quick buildup. But he also traveled with the team to Orlando and is even practicing so well, Indiana is reportedly becoming increasingly optimistic he’ll play.

Is Oladipo healthy enough to play?

At stake for Oladipo:

  • $2,763,158 if the Pacers get swept in the first round
  • $2,993,421 if they play exactly five playoff games
  • $3,223,684 if they play six or more playoff games

Brian Windhorst of ESPN:

The union believes Oladipo, who went to Orlando with the Pacers and then cleared quarantine so he could practice, should be paid his remaining salary, sources said.

The league, largely in an effort to set a precedent in case other players who are deemed healthy want to leave Orlando and no longer play, believes Oladipo has opted out and should not be paid, sources said. His public comments about feeling healthy has only solidified the league’s position on the matter, sources said.

The Pacers support Oladipo’s decision and are willing to pay him the salary whether he plays or not, sources said.

Presumably, if Oladipo plays, he’ll get paid like anyone else playing in the resumption. This controversy lingers only if Oladipo doesn’t play.

It’s unsurprising the Pacers don’t want to pick this fight with their star player, especially as he approaches 2021 free agency. Trying to avoid alienating their own players but not necessarily eager to pay for services not rendered, teams collectively want the league to handle these issues.

If teams had ample discretion, the Wizards might have said Davis Bertans – who chose to sit out – had some lingering injury. NBA players are rarely perfectly healthy. There’s always some physical issue to point to. Bertans will be an unrestricted free agent this offseason, and they want to re-sign him. What an easy way to build goodwill – and maybe even get a discount on Bertans’ next contract.

Obviously, the league doesn’t want those type of shenanigans. That’s why on outside rulings on players’ health can be important.

Oladipo might not be the only borderline case:

Oladipo’s situation might take care of itself if he decides to play. But the league might inquire more deeply into other situations.

Report: Rockets star James Harden ‘feeling fine,’ might travel with Russell Westbrook

Rockets stars James Harden and Russell Westbrook
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When Russell Westbrook revealed he had coronavirus, speculation immediately turned to the Rockets’ other star who also didn’t travel with the team to Disney World.

James Harden is “feeling fine,” working out and might travel with Westbrook to Orlando, according to Shams Charania of Stadium:

Was Harden also diagnosed with coronavirus? Is he just waiting for his friend before entering the restrictive bubble? Is there another issue?

These questions beget even more questions.

If both players have coronavirus, they won’t necessarily recover on the same day. Would the first to get cleared wait for the other? Or is traveling together just an idea in case it works out?

If Harden is fully healthy and just waiting for Westbrook, how do their teammates inside the bubble feel about that? Those already at Disney World are spending more time away from friends and family in less-than-ideal conditions.

If there’s another issue… who knows?

The lack of transparency around the situation only invites rumors and guesses.

At least it’s good news that Harden feels fine.