he Sonics' proposal for a $500 million taxpayer-subsidized arena in Renton appears dead.

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OLYMPIA – The Sonics’ proposal for a $500 million taxpayer-subsidized arena in Renton appears dead, prompting Sonics owner Clay Bennett to say tonight there is “little hope” the team will remain in the area.

Emerging from closed-door negotiations in Gov. Christine Gregoire’s office this evening, key lawmakers said no action would be taken on the proposed arena before the Legislature adjourns this weekend.

“This [is] a staggering and quite likely a debilitating blow to our efforts to develop a world-class arena facility,” Sonics owner Clay Bennett said in a written statement. “Clearly at this time the Sonics and Storm have little hope of remaining in the Puget Sound region.”

Bennett said he was still willing to talk about other financing options to make an arena work. But he said no other options are on the table right now.

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While House Majority Leader Lynn Kessler, D-Hoquiam, said there will not be a vote this session, she held out a sliver of hope for arena backers. She said Gregoire will call Bennett to see whether talks can continue after the session.

While the arena appeared to have significant support in the state Senate, it could not overcome opposition in the state House, where Speaker Frank Chopp, D-Seattle, was openly hostile.

“Time was too short. The components of the deal were too complex,” said Rep. Fred Jarrett, R-Mercer Island, an arena supporter who represented House Republicans in the meeting.

It was the third unsuccessful attempt in as many years by Sonics and Storm owners to get stadium deals similar to what the Mariners and Seahawks got in the 1990s.

The latest rejection could open the door for the Sonics and Storm to move to Oklahoma.

Bennett, the leader of a group of Oklahoma City businessmen who bought the teams for $350 million last year, has pledged to make a “good faith” effort to secure an arena deal in the Seattle area. But unless he gets a deal by Oct. 31, Bennett has said he may relocate the teams after their leases at KeyArena expire in 2010.

The Sonics had sought legislation authorizing King County to contribute up to $300 million in local taxes for the Renton arena. The taxes on hotels, car rentals and restaurants are now devoted to paying off debt from Safeco and Qwest fields and the demolished Kingdome. The Sonics wanted to tap the money after those stadiums are paid off.

Jim Brunner: 206-515-5628 or jbrunner@seattletimes.com