SEATTLE (AP) - Talks between the NBA and a potential ownership group about the possibility of bringing a new basketball team to replace the departed SuperSonics have begun, but the chances of a franchise coming to Seattle remain murky.

The city still has to overcome several hurdles in finances and timelines. It still must persuade state lawmakers, who have been reluctant to help college and professional sports teams recently with arena issues, to give the city authorization to use tax revenues for a renovation of KeyArena. There's also a looming state budget deficit, which has become one of the central talking points of the gubernatorial race, plus the fact there are no current plans for the league to expand or relocate another franchise.

NBA commissioner David Stern vaguely talked about Seattle in a conference call with reporters on Thursday.

"I don't want to mislead, so I will say that we have had some contact and we are aware of what's going on," Stern said. "But I'd rather not deal with the specifics of it at the time. But we have had some positive contact."

NBA spokesman Mark Broussard would not elaborate beyond Stern's comments.

Calls to Seattle developer Matt Griffin, the public face of a potential franchise ownership group that includes Microsoft Corp. CEO Steve Ballmer, were not immediately returned Friday.

The group has previously offered to pay for half of a $300 million renovation of KeyArena.

Robert Mak, a spokesman for Mayor Greg Nickels, said the city is aware of talks between the NBA and representatives of an ownership group led by Ballmer and other business leaders. On Monday, Nickels said city officials have already met with state lawmakers and intend to have a formal plan ready to present during the legislative session begins in January.

Deputy Mayor Tim Ceis said Stern's "positive" comments are helpful as the city moves forward with crafting a financial plan.

Under current plans, the city will ask for state authorization to divert 1 percent of the existing hotels tax in Seattle from the convention and visitors bureau to the city. He said the convention center no longer needs that revenue and the city should get it.

"Those funds (would be) available for an NBA franchise," Nickels said earlier this week.

The city is resting its pitch on the fact that the tax is only collected inside of Seattle and paid for by tourists.

Ceis said that no taxes are being raised.

Seattle was home to the Sonics for more than 41 years until the team moved to Oklahoma City this summer after a bitter fight involving team owner Clay Bennett, the city and fans. The team, now called the Oklahoma City Thunder, settled with the city of Seattle for an initial $45 million to leave town with two years still remaining on its lease at KeyArena.

Bennett purchased the Sonics in 2006 from Starbucks Corp. chairman Howard Schultz for $350 million, and now has the franchise in his hometown. Bennett faced harsh criticism in Seattle for his efforts in trying to build a new, $500 million arena in the suburbs as a replacement for KeyArena - with the public paying for most of it. The presumption was he wanted to move the franchise all along.

Under the settlement, Bennett paid $45 million immediately. Seattle would get another $30 million in 2013 if the state Legislature authorizes at least $75 million in public funding to renovate KeyArena by the end of 2009, and Seattle doesn't obtain an NBA franchise of its own within the next five years.