Smith won't pick up option but wants to stay a Knick

New York Knicks' J.R. Smith (8) reacts after

New York Knicks' J.R. Smith (8) reacts after making a 3-pointer during the second half. (April 13, 2012) (Credit: AP)

J.R. Smith won't pick up next season's $2.4-million option by Tuesday's deadline and will become a free agent Sunday, according to a source close to the Knicks' sixth man. But it doesn't mean Smith and the Knicks are parting ways.

By not opting in, Smith can get a 20-percent raise as a free agent. The Knicks plan to give him the salary bump, and the person close to Smith said he doesn't want to go anywhere. "He wants to return to the Knicks," the source said.

The Knicks will offer him a new deal starting at roughly $2.9 million for next season. The contract can be up to four years in length, according to the rules of the collective-bargaining agreement.

What the Knicks give him could be based on what other teams offer Smith, who will be a restricted free agent. But he is from New Jersey and said at a golf outing in his home state in May that it's not about money. He said he wants to stay with the Knicks and close to home. "If all things are equal,'' he said, "I'm staying."

Smith is considered a non-Bird free agent, so although the Knicks are over the salary cap, they can pay him without dipping into any of their free-agent exceptions.

After spending the first month and a half of the season in China, Smith joined the Knicks in February and provided energy, scoring and defense off the bench. He averaged 12.5 points in 35 games. In five playoff games against the Heat, he averaged 12.2 points and shot 31.6 percent, including 17.6 percent from three-point range.

The Dolan family owns controlling interests in the Knicks, Madison Square

Garden and Cablevision. Cablevision owns Newsday.

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