I'm not calling the team a contender but I'm going to say that they have a realistic shot of making it to the ECF. I would be surprised if they don't at least make it to the 2nd round next year.you can't call this team a contender because they realistically have no chance of making it out of ECF. at best they are a good team that makes it to the second round. at this point i would be happy just to see the raptors win one playoff series(haven't seen that in years).
and i'm not sure who the raps can sign with that 12mil on lowry, but i do know it's overpaying. certainly if one of the young guys were to develop into a good player you might rather lock them up long term. it would suck to be unable to retain your guys because you overcommited to lowry and you don't want to pay luxury tax.
As for Lowry's contract you valuing him at 8mil/year is clearly far from his market value. You do know that at 8 mil a year he would be making the same as Avery Bradley and slightly less than Channing Fyre. He would be making half of what Gordon Hayward and Chandler Parsons. How much a player is worth is determined by how much other players are making. In the year 2014 8 mil a year just doesn't get you as far as in years past.
I also don't see how an alternative method to spend that money would result in us being contenders considering that whoever you have in mind would likely cost more than what you have in mind. Moreover even if we go by your player value, overpaying a guy by 4 mil shouldn't be the difference between being contenders and being a mediocre team like you are suggesting.