Four former Seattle mayors have written an open letter in the Times about the Key Arena/Seattle Center problem. You can read it here.
Seattle Center is a tourist trap for all practical purposes. Other
than for Sonics games, I never go down there. These days it's become way
too small to handle events like Bumbershoot, the Bite of Seattle and
Folklife but there's really nowhere else within Seattle city limits to host those kind of festival-type events.
I've thought a lot about this, and the problem is that Key Arena is
basically in a rotten location for a stadium and as long as it's in
Seattle Center it will never make money. As b_e_robinson once pointed out to me, there's way too many bars, restaurants and private parking lots in the lower Queen Anne area for the Sonics
to ever maximize revenue in that location, not to mention getting
there from the Eastside and the South End is a total nightmare.
My recommendation would be to build a new basketball-only arena in
the SODO area south of Qwest Field and Safeco. It's better equipped
to handle traffic, easier access to mass transportation, and the
Sonics would probably be able to build themselves a parking garage
and get some cash out of that as well.
The Seattle Center isn't a viable or smart place to put a new arena
in my opinion. I'd just level the Key and put a big park/concert space there that can handle the bigger artistic events. What do you Sonics fans think?