With $31 million in his pocket and the Seattle City Council on his side, SuperSonics owner Barry Ackerley is now turning his attention to basketball fans and area businesses to firm up the deal on a new arena south of the Kingdome.
Ackerley has said several goals must be met before he'll invest $80 million to $100 million in the new arena, which he hopes to open for the 1992-93 season.
The first was all but accomplished yesterday when the City Council gave its tentative approval to a deal that will give Ackerley $31 million in admission-tax revenues over 30 years.
Although Ackerley and the council still need to give their final approval, the agreement is similar to one Ackerley proposed over the weekend.
And in voting for the deal yesterday, Councilwoman Sue Donaldson characterized the council's offer as ``being reasonable without being irresponsible.''
The vote was 7 to 1. Only Councilwoman Dolores Sibonga voted against the deal. Councilwoman Jane Noland was out of the city.
Ackerley was studying the small print of the deal late yesterday and is expected to decide in the next few days whether he can live with the council's new terms.
But with a deal with the council all but wrapped up, pressure now shifts to the city's business community, which will be expected to bear much of the cost of a successful arena.
For instance, Ackerley officials believe that before they can go to the bank for a loan they've got to find a company willing to put its corporate name on the new arena.
Such a commitment would guarantee the Sonics owner an additional $500,000 to $1 million a year to help pay off the debt on the new arena.
SeaFirst agreed two years ago to be the arena's corporate sponsor. That deal fell through, but bank spokeswoman Sheri Pollock yesterday said SeaFirst is still interested in entering into such a deal.
While Ackerley is trying to line up a corporate sponsor, Sonics and Ackerley Communications officials will be urging companies and wealthy basketball fans to lend their support by coming up with as much as $100,000 apiece for the 65 luxury suites planned there.
If successful, the leases could generate $5 million to $6.5 million a year in guaranteed income.
Next comes advertising. The arena will be built to maximize income from advertising, some of which can be tailored to individual events, be it a circus, basketball game or rock concert.
Depending on how successful Ackerley is, experts say advertising should bring in at least $1.5 million a year, and could provide a steady income as high as $3 million annually.
And, finally, bookings. Bill Ackerley, vice president for Ackerley Development, says the arena's goal is to book 140 events its first full year of operation.
Wrap that all together, along with, perhaps, a cable-television package and the city's $31 million contribution, and Ackerley's arena may be able to guarantee enough income to achieve the goal of avoiding having to put Ackerley Communications up as collateral.
Failure to accomplish any of those goals, says Bill Ackerley, will jeopardize the arena's future.
Ackerley already lost his bid to try to cut down on potential competition for events when he dropped his demand that the Coliseum be reduced from 14,500 seats to 5,000 seats.
He said yesterday he gave in on the Coliseum issue because it was clear it wasn't what the council wanted and it wasn't what the public wanted. But he said it would make it tougher to obtain financing.
But while Ackerley works to put the deal together, some activists may try to unravel it.
With the support of Sibonga, a group of citizens opposed to spending city money on the arena has threatened to circulate an initiative petition aimed at putting the issue on the ballot in November.
WHAT IT MEANS Here are highlights of the deal with SuperSonics owner Barry Ackerley that the Seattle City Council approved yesterday:
WHAT THE CITY WILL SPEND:
-- ADMISSION TAX: Ackerley receives up to $1 million a year in admission tax revenues for 30 years. To account for inflation, the figure can rise up to 5 percent a year. By the year 2022 the city's contribution will have totaled $95.2 million.
-- PARKING GARAGE: How this will be settled is still unclear. The council wants to limit the city's liability and has asked the mayor to pursue a wide range of options. The most likely one is that the city, Ackerley and the downtown business community will share the financial risk of a garage expected to cost $1.3 million annually.
-- STREETS and TRAFFIC CONTROL: The city will spend a maximum of $2 million on traffic and street improvements south of the Kingdome. The city also will contribute a maximum of $150,000 annually for traffic control officers for when arena events conflict with Kingdome events.
WHAT THE CITY GETS:
-- An $80 million to $100 million arena that doesn't involve the city going into debt, and a parking garage.
-- A guarantee that the SuperSonics will remain in Seattle at least the next 30 years.
-- Ackerley's promise that he will pursue a National Hockey League franchise for Seattle.
-- Sales tax revenues on the materials used to build the arena and parking garage; increased property taxes on the land and whatever increases in admission taxes the new arena generates. Also may receive money from parking garage if it is successful.
-- Ten days' free use of the arena annually.
-- 5,000 free basketball tickets distributed annually to disadvantaged youths.
-- A promise from Ackerley that the arena's name will include Seattle but won't bear the name of a tobacco or liquor company.