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By MARC BERMAN

The Arizona Republic states the portion of the mid-level exception Donnie Walsh has offered Suns forward Grant Hill is significant — $5 million of the $5.8M exception. Walsh has another offer on the table starting at a little more than $3M — a three-year, $10M offer.

With news of the salary cap expected to shrink significantly in 2010, it’s surprising Walsh is willing to do a three-year deal. In that scenario, more than $3M would count against the 2010-2011 cap.

I know they love Grant but was it necessary? The full mid-level exception for one year seems perfectly acceptable after he was underpaid the past two seasons in Phoenix, which paid him $3.9M over two yearss.

Perhaps if Hill signs long-term, Walsh is more inclined not to sign David Lee. Or Walsh knows they are getting Lee for a very good deal since no team other than Portland can ink him to more than the mid-level..

The Suns have been so miserly, it’s hard to imagine them topping the Knicks’ offer. The one caveat is the Suns owner Robert Sarver doesn’t want to lose anything to Mike D’Antoni. Today’s the first day players can sign.