Of course, if you have a winning team, people will show up.
I don't agree, at least categorically. There is a limit to the number of basketball fans that can consistently make it to a week night game in State College. I think the capacity should be 10K maximum, with the stands as close to the court as possible.
As for the layout, I think there should be a very small percentage of seating behind each baseline. Maybe have the upper level baseline be retractable stadium seats that they could roll out and use for special occasions or just keep as standing room only. The BJC seems to be designed for concerts and also basketball. It is the equivalent of the god awful Veterans stadium in Philly. I really think that (as said in post above) that John Paul Jones Arena at UVA is the best modern arena for sports that I've seen, and it can also support concerts. The capacity of the JPJ Arena is 14593, but if we shrunk it to 10k, as a standard seating, plus and extra 2k in situational seating, it would be a much better optic and atmosphere. Still, the team has to win to even have a chance at filling a 10k seat arena.