New Downtown Arena

[Bellaboo]

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?

They may not sell, but they might pack up and leave town to a better venue with a better arena.

It wouldn't take much to be a better arena though.

[onthestrip]

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 ..

But how? People walk leases all the time. As much as they would stand to gain by selling, or maybe even moving to a bigger market, there would need to be a penalty well into 9 figures to keep them here. Why cant we know some of these details first?

[BoulderSooner]

But how? People walk leases all the time. ?

give me 1 example . of a team leaving a lease

[chssooner]

give me 1 example . of a team leaving a lease

Didn't OKC do it?

Sure, they paid an opt-out fee, but they left that lease in Seattle, over basically the same thing.

[BoulderSooner]

Didn't OKC do it?

Sure, they paid an opt-out fee, but they left that lease in Seattle.

nope in fact a judge was going to rule that they could NOT break their lease ..



they then came to a settlement with Seattle that allowed them to leave early ... but they couldn't break their lease .. even though they wanted to

[onthestrip]

nope in fact a judge was going to rule that they could NOT break their lease ..



they then came to a settlement with Seattle that allowed them to leave early ... but they couldn't break their lease .. even though they wanted to

And clearly it wasnt a big enough penalty or they would have had to stay there for longer. You cant force someone to honor a lease if they dont want to, just penalize them monetarily, mostly. Theres nothing that guarantees the Thunder stay during this lease unless it costs them something like $500,000,000 to get out of it.

[Laramie]

nope in fact a judge was going to rule that they could NOT break their lease ..


they then came to a settlement with Seattle that allowed them to leave early ... but they couldn't break their lease .. even though they wanted to

^ ^ ^ This is accurate and correct.

Bennett announced that the settlement calls for a payment of $45 million immediately, and would include another $30 million paid to Seattle in 2013 if the state legislature in Washington authorizes at least $75 million in public funding to renovate KeyArena by the end of 2009 and Seattle doesn't obtain an NBA franchise of its own within the next five years.

SuperSonics, Seattle reach last-minute settlement: https://www.espn.com/nba/news/story?id=3471503

[Teo9969]

They may not sell, but they might pack up and leave town to a better venue with a better arena.

It wouldn't take much to be a better arena though.

They're going to keep the team (therefore passing on the payout), only to move them so they have to travel every time they want to see them?

[BoulderSooner]

And clearly it wasnt a big enough penalty or they would have had to stay there for longer. You cant force someone to honor a lease if they dont want to, just penalize them monetarily, mostly. Theres nothing that guarantees the Thunder stay during this lease unless it costs them something like $500,000,000 to get out of it.

2 years cost the thunder 45 mil to get out of but it was not a penalty ... they COULD NOT have left with out the agreement with seattle ..

[PoliSciGuy]

give me 1 example . of a team leaving a lease

NJ Nets https://www.nj.com/news/2010/02/nets...dential_c.html
Hartford Whalers https://www.sportsbusinessjournal.co...LERS-MOVE.aspx
Cleveland Browns https://www.nytimes.com/1995/11/12/s...pagewanted=all

[BoulderSooner]

NJ Nets https://www.nj.com/news/2010/02/nets...dential_c.html
Hartford Whalers https://www.sportsbusinessjournal.co...LERS-MOVE.aspx
Cleveland Browns https://www.nytimes.com/1995/11/12/s...pagewanted=all

nets only were able because of an agreement ..

the browns owner in effect owned the stadium in cleavand so he broke a lease in effect with himself ..

the whalers left 1 year early for an agreed upon amount of 20mil ..

[April in the Plaza]

Would definitely suck to build a $1.5B arena only to lose the anchor tenant early in the primary term

https://www.nbcsports.com/nfl/profoo...tion-penalties

[chssooner]

Granted, it is much easier to use an arena more during the year than a football stadium. That is what people are missing. This will get more concerts and events then the Paycom Center does. Just like the Ford Center got more events than the Myriad Arena did. Having a modern arena with great acoustics and better dock spaces will help immensely.

[Teo9969]

Granted, it is much easier to use an arena more during the year than a football stadium. That is what people are missing. This will get more concerts and events then the Paycom Center does. Just like the Ford Center got more events than the Myriad Arena did. Having a modern arena with great acoustics and better dock spaces will help immensely.

I agree that an updated arena is probably something this city could use and is probably fair for the Thunder. But why can't we wait say until 2031 open date and bring the tax back to 4 or 5 years?

We're going to spend as much on interest as we did on the 1st version of MAPS. I'd rather back the timeline up 2 years and take $0.00 from the owners.

[Rover]

I agree that an updated arena is probably something this city could use and is probably fair for the Thunder. But why can't we wait say until 2031 open date and bring the tax back to 4 or 5 years?

We're going to spend as much on interest as we did on the 1st version of MAPS. I'd rather back the timeline up 2 years and take $0.00 from the owners.

And have two more years of cost increases? Interest isn’t the only cost. Plus you delay additional revenue for two more years. There’s such a thing as opportunity costs.

[Teo9969]

And have two more years of cost increases? Interest isn’t the only cost. Plus you delay additional revenue for two more years. There’s such a thing as opportunity costs.

Hundreds of millions of interest...there's zero world where waiting two years has that amount of opportunity costs. There's no scenario for this where the city is making the most sensible financial decision when the city's needs are the paramount concern in the discussion.

Anyway, the context of my comment wasn't about financial analysis; it was about showing how the city is being pushed for this package against its own interests and the most sensible reason this local ownership group would be trying to secure the future of the franchise today is because they intend to sell, likely after the media rights deal and maybe some expansion.

[chssooner]

Hundreds of millions of interest...there's zero world where waiting two years has that amount of opportunity costs. There's no scenario for this where the city is making the most sensible financial decision when the city's needs are the paramount concern in the discussion.

Anyway, the context of my comment wasn't about financial analysis; it was about showing how the city is being pushed for this package against its own interests and the most sensible reason this local ownership group would be trying to secure the future of the franchise today is because they intend to sell, likely after the media rights deal and maybe some expansion.

A project of this size costs over $100 million more than it would have 4 years ago. Imagine what 2 more years will do to costs. Not just interest, but principal. Principal will go up maybe 30% more in 2 years, IMO. And this is like 3 or so years in the future for construction. So 2026 or so. If that were 2028, it would be 30% more, in my opinion.

[Teo9969]

A project of this size costs over $100 million more than it would have 4 years ago. Imagine what 2 more years will do to costs. Not just interest, but principal. Principal will go up maybe 30% more in 2 years, IMO. And this is like 3 or so years in the future for construction. So 2026 or so. If that were 2028, it would be 30% more, in my opinion.

Is there another world economy halting, supply chain destroying pandemic on the rise I missed in the news?

[chssooner]

Is there another world economy halting, supply chain destroying pandemic on the rise I missed in the news?

You think costs will go down in 3 years? Interest rates aren't going to go down by then, but costs will keep going up. Especially labor costs.

[April in the Plaza]

I agree that an updated arena is probably something this city could use and is probably fair for the Thunder. But why can't we wait say until 2031 open date and bring the tax back to 4 or 5 years?

We're going to spend as much on interest as we did on the 1st version of MAPS. I'd rather back the timeline up 2 years and take $0.00 from the owners.

I’ve heard they really want to use Populous but there are concerns about the number of other teams who will be in the market for new arenas in the next 5 to 7 years. Will be quite a few, just in the NBA.

[Teo9969]

You think costs will go down in 3 years? Interest rates aren't going to go down by then, but costs will keep going up. Especially labor costs.

I don't think you quite understand how expensive it is to build things with other people's money. This is not going to go from being a $900M arena to a $1.1B arena in 2 years and if it does, then I guarantee you the finance cost is going to blow $200M out of the water. If we're dealing with 10% inflation in 3-5 years then borrowing rates will be in the teens.

I have no qualms breaking the MAPS model and building a project of this scale with some debt involved, but starting construction 2-3 years before we even start collecting is, if I'm being charitable, "ambitious"

[Laramie]

We've going to have to build a new arena sooner or later. Trust that the leadership are further ahead on this project than most believe.

If we take the attitude about building the arena and having the team leave as a reason to vote down the project, then you will seal the fate of the Thunder leaving and a new arena not getting built.

This may be our last opportunity to get a truly State-of-the-art arena built with all of the different groups wanting funds for their projects as they successfully pulled off in MAPS 4. We're going to have one chance to get this project secured--December 12 special election passage for $900 million.

Don't gamble that the project will be scaled down and there will be another vote if this fails.

[Rover]

Hundreds of millions of interest...there's zero world where waiting two years has that amount of opportunity costs. There's no scenario for this where the city is making the most sensible financial decision when the city's needs are the paramount concern in the discussion.

Anyway, the context of my comment wasn't about financial analysis; it was about showing how the city is being pushed for this package against its own interests and the most sensible reason this local ownership group would be trying to secure the future of the franchise today is because they intend to sell, likely after the media rights deal and maybe some expansion.

Your value analysis is more like a home owner, not a business owner. If you are selling a hotel, for instance, the value isn’t replacement costs, but rather the revenue earning history and capability. Increased income potential adds value in multiples. Increasing value by the two years of interest cost doesn’t equal two years of revenue increase, but multiples of that. Getting started raising revenues accelerates the earning arc and the value calculations.

[borchard]

I read an article several years ago from Dead Spin about the fall of the Super Sonics in Seattle. IT's a good read. Here is the link, and an excerpt from the article. The author worked in Public Relations, and had been fielding calls from angry fans about WHY the team needed a new arena just 10 years after a $100 renovation?:

"...Alas, Walker didn't have the good sense to lie to us. He went through a litany of minor reasons why the team needed a new arena: higher capacity, bigger arena footprint, more room for high-end concessions, more places for premium seat holders, a.k.a. the super rich, the people who could afford a pair of courtside season tickets for $70,000. These were the justifications he offered us to explain why we were asking for a heaping pile of taxpayer dollars. After Walker's spiel, a member of the sales staff asked the fateful question: "Wally, what will this arena upgrade do for Joe Sixpack—the regular fan?"

Dead silence.

After an uncomfortable few seconds, Walker said, "Well, nothing." The wind went out of me. It was as if he'd punched me in the stomach. Walker tried to backtrack, but the damage had been done. The battle for hearts and minds had ended before it'd even begun. I didn't see how we'd get an arena deal led by men who couldn't conceive of it as anything but a rich man's boondoggle, perpetrated on behalf of other rich people. Average people would shoulder the costs of making sure that the Puget Sound's affluent—suits at Boeing, executives at Microsoft—could be coddled at a sporting event that average people would no longer be able to afford to attend..."

https://deadspin.com/howard-schultz-...rds-an-5907371

[BoulderSooner]

I read an article several years ago from Dead Spin about the fall of the Super Sonics in Seattle. IT's a good read. Here is the link, and an excerpt from the article. The author worked in Public Relations, and had been fielding calls from angry fans about WHY the team needed a new arena just 10 years after a $100 renovation?:

"...Alas, Walker didn't have the good sense to lie to us. He went through a litany of minor reasons why the team needed a new arena: higher capacity, bigger arena footprint, more room for high-end concessions, more places for premium seat holders, a.k.a. the super rich, the people who could afford a pair of courtside season tickets for $70,000. These were the justifications he offered us to explain why we were asking for a heaping pile of taxpayer dollars. After Walker's spiel, a member of the sales staff asked the fateful question: "Wally, what will this arena upgrade do for Joe Sixpack—the regular fan?"

Dead silence.

After an uncomfortable few seconds, Walker said, "Well, nothing." The wind went out of me. It was as if he'd punched me in the stomach. Walker tried to backtrack, but the damage had been done. The battle for hearts and minds had ended before it'd even begun. I didn't see how we'd get an arena deal led by men who couldn't conceive of it as anything but a rich man's boondoggle, perpetrated on behalf of other rich people. Average people would shoulder the costs of making sure that the Puget Sound's affluent—suits at Boeing, executives at Microsoft—could be coddled at a sporting event that average people would no longer be able to afford to attend..."

https://deadspin.com/howard-schultz-...rds-an-5907371

deadspin lol .. but what he could have said is " a new arena means you get to keep your team"


the new okc arena will provide tons and tons of new things for 300 level seat holders ..