New Downtown Arena

[HOT ROD]

There was a survey conducted about a month ago with pretty much the same terms as will be voted on and even though we don't know the results, they wouldn't have moved forward unless they were positive.

Also, as with MAPS, there is really no organized opposition while the City and Mayor (and Chamber) use their massive platforms and resources to hammer home the benefits to the community with zero counterpoints. There will be some negativity on social media (as with anything) and that's about it.


I'm not taking a position on the vote, but from an objective point of view I'd be shocked if this doesn't pass, and by probably close to 60%.

Interestingly, the survey had ownership contribution of $70 million yet the ACTUAL agreement has it $20 million less. They must REALLY be confident this will pass, as I thought they'd actually raise the contribution to $150 million or more (basically paying the interest on the loan and any cost overruns), while gaining rights to develop the remainder of the site (creating Thunder Alley they were going to do anyway, and OKC's verison of LA Live). Wonder why that isn't happening. ..?

[HOT ROD]

these towers would be more feasible for Oklahoma City IF we didn't have the huge TV tower farm in the NE quad of the city. Remove those and YES I could totally see the need for a Space Needle type tower. In fact, MOST cities without natural elevation differences have these towers firstly due to communications. But OKC chose otherwise and built tower masts, should we reverse course, open that land in the NE for development and build a nice communications/observation tower downtown?

I personally would LOVE to see OKC build a tower like Chengdu Tower, https://chengdu-expat.com/wp-content...u-expat-1.jpeg at the southern end of Scissortail Park.

BTW: Let's include some kind of sphere or tower with this development on the 4-square block Prairie Surf Media studios super block.

How about something on par with The STRAT in Las Vegas, The CN Tower, Toronto or The Tower of the Americas in San Antonio.

Las Vegas

Toronto

San Antonio

[Plutonic Panda]

How much will those profits be? The city owns the Paycom Center too. How much profit does it bring in?

I can tell you that I work temp agencies out here in SoCal at various Arena and we sell a lot of food and it is very high priced I’m talking $12 hotdogs $20 cups of beer $10 cups of soda and lines that are wrapping around going 3040 people deep at all times. I don’t know exactly how much profit it will bring in, but the city will make money on this. There’s no way they can’t.

You you factor in Games all of these rich NBA players that are going out hotel rooms taxes on eating at expensive restaurants die hard fans that are coming to the games.

I don’t understand why you’re so against a new arena. Now truth to be told, I don’t really support this current proposal. But I do want to see a mega super expensive arena built in OKC. That needs to be done I don’t know.

But on the flipside of all of this, it’s pretty sad to see some of these comments where people think the world’s going to end for OKC if we lose the thunder. I mean if that’s all OK C is hanging on is an NBA team and OKC really isn’t that special or powerful of a city.

[scottk]

How much will those profits be? The city owns the Paycom Center too. How much profit does it bring in?

A full report from the OKC Chamber on the impact of MAPS projects, including the arena, and economic improvements that have resulted from a penny sales tax:

https://www.okcchamber.com/clientupl...FullReport.pdf

[PoliSciGuy]

A full report from the OKC Chamber on the impact of MAPS projects, including the arena, and economic improvements that have resulted from a penny sales tax:

https://www.okcchamber.com/clientupl...FullReport.pdf

….ok? Nothing in here shows the profits the Paycom center brings in.

[chssooner]

….ok? Nothing in here shows the profits the Paycom center brings in.

There will never be a way of seeing how much one asset makes and expends. That is fiscally irresponsible to monitor something like that. The city won't do that, they will look at funds as a whole. Nothing individually.

https://www.okc.gov/home/showpublish...77542194270000

https://www.okc.gov/home/showpublish...77545086200000

You can look through the attached for FY22. They don't breakout revenues for each individual asset. Because it isn't prudent. You have always asked for information that isn't prudent to measure individually, or you know isn't something tangible that can be measured. No company or city will measure any asset individually, because it is just not reasonable to track one asset individually.

[April in the Plaza]

There will never be a way of seeing how much one asset makes and expends. That is fiscally irresponsible to monitor something like that. The city won't do that, they will look at funds as a whole. Nothing individually.

https://www.okc.gov/home/showpublish...77542194270000

https://www.okc.gov/home/showpublish...77545086200000

You can look through the attached for FY22. They don't breakout revenues for each individual asset. Because it isn't prudent. You have always asked for information that isn't prudent to measure individually, or you know isn't something tangible that can be measured. No company or city will measure any asset individually, because it is just not reasonable to track one asset individually.

That is not remotely true

[PoliSciGuy]

There will never be a way of seeing how much one asset makes and expends. That is fiscally irresponsible to monitor something like that. The city won't do that, they will look at funds as a whole. Nothing individually.

https://www.okc.gov/home/showpublish...77542194270000

https://www.okc.gov/home/showpublish...77545086200000

You can look through the attached for FY22. They don't breakout revenues for each individual asset. Because it isn't prudent. You have always asked for information that isn't prudent to measure individually, or you know isn't something tangible that can be measured. No company or city will measure any asset individually, because it is just not reasonable to track one asset individually.

…..what?! How on earth do cities budget for venues if they are somehow unable to know the net inflows and outflows of each venue? If anything it’s “not prudent” to make budgets without this information. Check out Orlando’s budget - they list out venues, including the Amway Center, and their net budgets and flows. Asking for “how much money does this building make for the city” is not an unreasonable request for arcane knowledge, it’s basic accounting.

[chssooner]

https://www.okc.gov/home/showpublish...28597742130000

https://www.okc.gov/home/showpublish...94975809730000

Budgeted vs. Actual is one thing, but a true breakdown, which I thought you wanted, is another. These don't go into the detail you want, however.

[bombermwc]

What they post publicly might not, but any company would DEFININTELY know what an individual asset is costing. Between capitalization and amortizing, they in fact HAVE to know that. Now, do they roll those up in to a master sheet for a facility? If they don't, i would actually be shocked. Any business would know that, or else they wouldn't know that the profit/loss numbers are unfavorable for a particular location so they know to close it. For a city, it's not the same thing. They don't operate in that world in the same way, but they would try to maintain a profit margin (breaking even doesn't allow for raises for staff/increased maintenance costs/etc) to be able to sustain the thing.

For the PC, yeah they're watching this. They know what they are taking in and what it's costing them. But what they don't necessarily have, is the same information for the team. So if anything in the building is a contract/lease for the team, well the city isn't probably going to know that. But they will know that they are taking in to lease out that space and what it costs in utilities to create the lease amount. They're not blind to all of these things, and they do roll up in to an overall facility expense. The question I think you're asking is, is that aggregated report available where you can see it. And the answer is,.....no. Publicly traded companies do show data like that. Municipalities don't have the same laws (in most states) to present that data to the public. And i would find it highly unlikely that they would share it if asked.

[BoulderSooner]

Interestingly, the survey had ownership contribution of $70 million yet the ACTUAL agreement has it $20 million less. They must REALLY be confident this will pass, as I thought they'd actually raise the contribution to $150 million or more (basically paying the interest on the loan and any cost overruns), while gaining rights to develop the remainder of the site (creating Thunder Alley they were going to do anyway, and OKC's verison of LA Live). Wonder why that isn't happening. ..?

there were surveys with different amounts of contribution ..

[gopokes88]

According to this, only 50% of arena naming rights goes to revenue-sharing in the league:
https://sports.yahoo.com/nba-players...130000564.html

I believe the owner of the arena gets the other 50%, which in our case is the City.


It's amazing how little even the most interested and informed citizens know about how any part of the current and future arena deal is structured. And I include myself in that group.

Wild. My source on that was Brian Windhorst said on a podcast arena naming rights go into BRI- guess he either didn't clarify 50%, or didn't know it's 50%.

My larger point was it's standard in the NBA and not unique to OKC.

I think the arena timing makes sense given it looks like SGA could lead us into another 8 year window of highly competitive basketball, which likely means luxury taxes. Ownership paid it last time even post KD, a new arena will generate a lot more $. I assume they'll pay it again. $61MM in '18-19 alone. https://www.spotrac.com/nba/tax/2018/

Perhaps thats part of the reason for the lower contribution, they know they have some big bills coming in the next 2-5 years.

[Teo9969]

Wild. My source on that was Brian Windhorst said on a podcast arena naming rights go into BRI- guess he either didn't clarify 50%, or didn't know it's 50%.

My larger point was it's standard in the NBA and not unique to OKC.

I think the arena timing makes sense given it looks like SGA could lead us into another 8 year window of highly competitive basketball, which likely means luxury taxes. Ownership paid it last time even post KD, a new arena will generate a lot more $. I assume they'll pay it again. $61MM in '18-19 alone. https://www.spotrac.com/nba/tax/2018/

Perhaps thats part of the reason for the lower contribution, they know they have some big bills coming in the next 2-5 years.

My hunch is the timing comes from the owners wanting to sell within the next 10 years. They've probably assessed that there won't be a local buyer. You have to assume any out of market entity will not be loyal to OKC, so they are trying to create an environment that would make it more likely for a future owner to keep the team in OKC. Nobody wants their legacy to be that "they're the reason OKC lost the Thunder".

[April in the Plaza]

My hunch is the timing comes from the owners wanting to sell within the next 10 years. They've probably assessed that there won't be a local buyer. You have to assume any out of market entity will not be loyal to OKC, so they are trying to create an environment that would make it more likely for a future owner to keep the team in OKC. Nobody wants their legacy to be that "they're the reason OKC lost the Thunder".

That definitely tends to explain the 50M. No reason to put too much cash in if you’re planning to collect 350M in expansion fees and then looking to sell.

[BoulderSooner]

That definitely tends to explain the 50M. No reason to put too much cash in if you’re planning to collect 350M in expansion fees and then looking to sell.

The amount they are putting in is normal with the type of lease they have

[April in the Plaza]

The amount they are putting in is normal with the type of lease they have

You’ve seen the new lease?

What does it say about non-relocation and liquidated damages?

[PhiAlpha]

My hunch is the timing comes from the owners wanting to sell within the next 10 years. They've probably assessed that there won't be a local buyer. You have to assume any out of market entity will not be loyal to OKC, so they are trying to create an environment that would make it more likely for a future owner to keep the team in OKC. Nobody wants their legacy to be that "they're the reason OKC lost the Thunder".

That seems very unlikely.

[Teo9969]

That seems very unlikely.

Them selling the team seems unlikely?

[bombermwc]

I'm curious about this thought as well. What would make you think that there's an appetite to sell the team? They aren't in any disputes with the city about an arena or income right now. There's definitely a much better situation going on here than was going on in Seattle at the time of the sell of the Sonics.

I know it doesn't seem like much time so far, but we're just at about 40 years from matching the tenure in OKC with the tenure in Seattle. We've only had 15 years so far, but it's been impactful for both the team and OKC in a way that is mutually beneficial. I'm not seeing anything that would change that balance right now.

[PhiAlpha]

Them selling the team seems unlikely?

Yes, all the owners selling the team seems unlikely if the arena is approved. One or two of them maybe not the whole group.

[Dob Hooligan]

I think the Thunder ownership structure is set up with 6 to 8 local owners, who are from different businesses. So, a local economic downturn shouldn't affect the majority of owners at the same time. I've heard it called the "San Antonio model", which makes sense, because that is how the Spurs were set up when the Gaylord interests were part owners and Clay Bennett was the teams NBA Board of Governors member.

I read after Aubrey McClendon died that the team requires all ownership shares to not be sold on the open market upon any owner's decision to sell. At least, there is a first right of refusal. The team hires an investment bank to research and set the market value of the shares, and the other partners buy them.

Seems like our half dozen (or so) old men owners like the perks of team ownership, and this looks like the type of asset they would like to pass on to their heirs. I would be surprised if there were a time that the majority of owners needed the money, wanted the money, and wanted to move on from the NBA at the same time.

[Teo9969]

I have no insider knowledge or anything, but if the argument (implied by the Mayor and laid out explicitly in this thread) is that if we don't pass this, the owners are going to sell, then it seems substantially improbable that there is zero appetite to sell. Just the opposite, it makes me feel like there is an urgency because the time to sale is close enough that we have to move on this quickly.

Otherwise, why not push just 2 years further and save hundreds of millions of interest cost?

[warreng88]

I think the Thunder ownership structure is set up with 6 to 8 local owners, who are from different businesses. So, a local economic downturn shouldn't affect the majority of owners at the same time. I've heard it called the "San Antonio model", which makes sense, because that is how the Spurs were set up when the Gaylord interests were part owners and Clay Bennett was the teams NBA Board of Governors member.

I read after Aubrey McClendon died that the team requires all ownership shares to not be sold on the open market upon any owner's decision to sell. At least, there is a first right of refusal. The team hires an investment bank to research and set the market value of the shares, and the other partners buy them.

Seems like our half dozen (or so) old men owners like the perks of team ownership, and this looks like the type of asset they would like to pass on to their heirs. I would be surprised if there were a time that the majority of owners needed the money, wanted the money, and wanted to move on from the NBA at the same time.

We had a pretty bad economic downturn in O&G in 2015 and it didn't affect the ownership.

[BoulderSooner]

You’ve seen the new lease?

What does it say about non-relocation and liquidated damages?

it locks them in for 30ish years (now until the arena opens +25 years)

all of the deals with team contributions that are 40/50% are apples to oranges to ours in all those cases the TEAM in effect owns/controls the arena 365 days a year ..

[warreng88]

Not that this means anything, but going to the Paycom website, if you go to Business Opportunities and then Special Event Booking, there is a section that states:

The arena has hospitality spaces that can accommodate any size or type of event. Contact our hospitality team at hospitality@okcthunder.com to begin planning your next event.

For large scale concerts or arena events, please contact us at info@asm-okc.com.

Not sure if that helps in who plans what at the arena right now and how it would work moving forward in the new arena which, presumably would be the same.