doesn't matter, Larry is right no matter what.
The tax payers paid for the place to attract more people to come to the city, which increases tax revenue. The additional people also provide a larger market for local investors and businesses to access. Better entertainment creates better quality of life (perceived or real), which attracts businesses, visitors, and more residents which increases the tax base.I find it humorus that the taxpayers paid to have this place built and they have to buy expensive tickets to enjoy it.
There are plenty examples of publicly support attractions that charge for admission that, while they lose money in a direct cost analysis, are responsible for a lot bigger positive economic impact than just the cost of admission or any taxes collected on that admission charge.
I apologize in advance for the length of the post but it was requested.
BOTH ARENAS BUILT TO THE SPECIFICATIONS OF THE NBA
KEY: built to the exact NBA/Sonics specifications (Seattle had a tenant). The Key is just 7 years older than the Ford. Although originally constructed as part of the 1962 World's Fair, it underwent an extensive renovation in 1994 and reopened in 1995, literally from below the ground up (they lowered the floor "35 feet below street level to allow for 3,000 more seats"). Apparently, it was essentially gutted to the studs, it "maintained the architectural integrity of the original roofline by using the existing steel trusses in combination with four new main diagonal trusses".
FORD: built to NHL & NBA specifications (this was even mentioned in the original MAPS ballot language). We didn't have a tenant signed and didn't even know which sport, so it was built "builder's white". It was the City's plan that the eventual tenant would pay for any "finishing out" costs or amenities they wanted. The MAPS tax was passed in 1993, construction started in 1999. The Ford would be one of the last projects to open, in 2002.
Bennett was heavily involved in trying to get an NHL team here (we did make the list of finalists but lost out on the expansion team). He planned on being an owner of the expansion team and was most likely involved in the design of the Ford (at least to the extent of what would be needed by the team).
I have not been able to find a single article, written at the time, that supports the claim that the Ford was built on the cheap or built bare-bones. Some "wish-list" items were cut to alleviate the problem they were having with cost over runs, but again, it was the City's plan for the eventual tenant to pay for those.
It is true that other MAPS projects were scaled back due to massive budget over runs (only 1 of the 9 MAPS projects was built on time and on budget). The cost over runs on the other projects were so excessive, there was serious consideration in scrapping the Arena completely. Mayor Humphreys decided that they needed to complete what was promised (his campaign slogan was "we can finish MAPS on time and on budget", neither turned out to be true). He came up with the 6 month "extension" of MAPS to finish paying for the Ford. The campaign was called "Finishing MAPS right" (further going against the claim that it was "bare-bones"), it was called the "crown jewel of MAPS", "a first rate facility", "state of the art" and other glowing terms (by City leaders, trade publications, ESPN, and yes, even the NBA when the Hornets were here...from opening day until just about the time Bennett bought the Sonics and then the Ford started to be called "adequate" and the idea for the Ford Tax came about. Stern himself said the Ford didn't necessarily need any improvements to land a permanent team (discounting the claim that the Hornets were a special case and the Ford was barely adequate).
SEATING CAPACITY
KEY: Supposedly one of the problems with the Key was that it was the smallest arena in the NBA (17,072). Reportedly, the seating capacity was insisted on by the Sonics owners to keep competition from the NHL out. Ironically, Bennett wanted a new larger arena so he could be the potential owner of both an NBA and NHL team in the same arena. Stern even called the Key a "model NBA arena" at its opening. Naturally, there was some resistance up in Seattle to make major improvements to an arena that was still essentially new and built exactly the way they wanted it.
FORD: NBA seating capacity last season was 19,163. After the improvements are made and "nearly 1,000" net loss of seats, capacity will be 18,203. This drops the Ford from #14, all the way down to #28. Dangerously close to the smallest in the NBA (with the elimination of the Key as an NBA arena, the smallest is 17,248). Someone else posted in another thread that a couple of the arenas that are below us are building larger arenas that will be open soon. The Ford will drop even further. Hard to control what other NBA cities do, but initially, we are making the Ford smaller ourselves.
AGE OF ARENAS BEFORE MASSIVE IMPROVEMENTS ARE "NEEDED"
KEY: It was at about the 8 year mark that the owners of the Sonics started asking for major improvements to the arena. Have to remember the Key was built to the exact specifications of the NBA and the Sonics.
FORD: It was at the 5 year mark that the Mayor talked about REPLACING the arena (may have been before the 5 year mark based on his comment below)
http://www.theolympian.com/sonics/story/202314.html
Tacoma News-Tribune: OKC mayor denies talking to Sonics (8/28/07)
Cornett said. “But I have been very public about the willingness to consider building A NEW FACILITY to REPLACE the Ford Center.”
But Cornett realizes the Ford Center would need to be REPLACED in the near future if an NBA team were to relocate there, and he would consider proposing a tax measure -- that might include funding for a new stadium and convention center -- for a vote.
Bennett agreed a few weeks later:
With deadline looming, Sonics seeking arbitration for KeyArena lease - NBA - ESPN
Associated Press: With deadline looming, Sonics seeking arbitration for KeyArena lease (9/21/07)
“I absolutely know the team can survive and be profitable in Oklahoma City. ... It will certainly work today a heck of a lot better than it’s working here today,” Bennett said, with a small chuckle. “The Ford Center [there] is quite adequate -- but ANOTHER BUILDING WOULD BE NEEDED IN THE FUTURE.
Stern said concerning the life of an NBA arena:
Councilmember Nick Licata: Urban Politics #214 5/3/05
Urban Politics #214, (5/3/06) “David Stern, NBA Commissioner, testified before the Washington State Senate, Ways & Means Committee, that public officials should not expect stadium facilities to last more than eleven or twelve years.”
RENOVATION OR NEW ARENA (This is where the Key and Ford differ somewhat)
KEY: Various Sonics' owners had been trying to get renovations done for years. Stern even went to the Washington legislature to lobby for it. At least 3 different remodel/lease plans were offered by the City and none of them went anywhere. "The priciest option would have delivered a $198 million KeyArena expansion sought by the team, but would have required team owners to come up with $49 million of that ... The second option was a $149 million expansion with an owner contribution of $37 million. ... The third option would not have cost the Sonics owners anything. It would have provided a $50 million KeyArena renovation without a public vote. That option would have relied on “existing revenue streams” and not new taxes..." (The 1st two would have required approval from the Legislature & a public vote as they were new taxes, just as the Ford tax required a vote for the same reason). Depending on the upgrade option, they also would receive "$8 million to $20 million a year in additional revenue". This could have alleviated if not eliminated the owners reported yearly losses.
After several years of failure to get an agreement acceptable to all parties, Schultz sold the team to Bennett with the hopes that a relocation threat would be taken seriously and government leadership would take heed. Bennett decided that a remodel was out of the question and only a new arena would work. He played the relocation card but to no effect. He even commented to the effect: "they don't even know where Oklahoma City is" and mentioned other cities like Kansas City and Las Vegas into the mix (got into some trouble with Stern over Vegas). Stern supported his new owner's relocation plans to Oklahoma City and said a remodel would no longer work. After the team relocated to OKC, Stern changed his mind again and said a remodeled Key would be acceptable for consideration of Seattle getting a possible replacement team.
FORD: The reverse ended up being the case. As in the quotes from Cornett and Bennett above show, they were talking about a replacement arena. Probably realizing the election reality that it would be a hard sell convincing voters that a 5 year old building was needing replacement, the remodel plan was enacted. The Mayor publicly stated he wasn't even sure a remodel plan would pass, so this $120M remodel had a much better chance of success than a $500M new arena (as Bennett was asking for in Seattle). Granted it probably wouldn't cost $500M here, but most likely would have been much higher than the remodel cost. Or maybe not. As the County Commissioners recently found out to their astonishment, it will actually cost about $50M LESS to build a brand new jail from scratch than to renovate and build an annex to fix the current jail. But I digress...
LONG TERM OBLIGATION
KEY: One thing that came out in the trial (the judge asked about it), was Seattle was under no obligation to keep making whatever upgrades the team decided they needed.
FORD: Bennett took care of that problem with the Ford lease. The City (taxpayers) is required to keep upgrading the arena as a "first rate NBA arena". Who gets to decide what that definition is? The NBA/team of course. As pointed out above, after the improvements, the Ford falls dramatically. Some have claimed the amenities change all that (maybe they do). The Mayor has said the Ford will be "like a brand new building" and will be "state of the art" (it was described as that when it was built, yet somehow this remodeled building is going to last 2 to 3 times longer than it did before "needing" $120M in improvements?) What is that based on?
I'm only kinda-sorta following this thread, Larry, since, for me at least, the Ford Center vote is a done deal and one in which I aggressively supported. I'm wondering, though, why you're devoting your valuable time to it right now. From what I've read of your posts, you are a rational and sincere guy and I don't see you taking cheap shots at anyone (though the same have come your way).
Why are you going here (Ford Center)?
No problem Doug....Someone asked so I answered...guess I could have found a more relative thread (if still active and pointed him there) but didn't think about that until right now...it did take more time to respond to it than I had planned...thought I had the info all in one place but was scattered in parts on 2 different computers.
If it weren't for our national parks system (which is vastly underfunded thanks to the Bush administration), you either wouldn't HAVE these places to visit at all, or they would be privately owned and you'd be paying a whole lot more.
You seem to be forgetting about all the sales tax revenue generated from game night dining, drinking, and other entertainment. Not to mention the businesses that stay in this city or come to this city at least in part due to our improved quality of life.
Don't Edmond My Downtown
Unfortunately, those numbers weren’t included in the Mayor’s and City managers statement. It was the direct profit/loss from the Thunder lease. A far cry from the agreement we had with the Hornets, where the City/Investors (including Bennett) split a $1M net profit directly from the lease the 1st year they were here. From what I can tell, the second year resulted in neither a profit or loss (there was a disagreement on what constituted a home game, if the City got their count, there would have been a net profit).
While there certainly is some NEW money coming in on game night from out of the area (reportedly 20% of season ticket sales for the Hornets were from the Tulsa area), the rest is a low economic impact (not for downtown of course, but for the City as a whole). The same money was being spent at other “dining, drinking, and other entertainment” options throughout the City. To be fair, you have to add in the transfer of money spent on those things from surrounding communities that are now being spent in OKC.
I am not saying that sales tax revenue hasn’t increased but where is all of that money going? Is that increased revenue just more “break even” to keep us current with increased costs/inflation etc? Sure some of it can be blamed on the economy as others have mentioned, but this is at least the 3rd year in a row that the City budget has been “tight”.
Budgets and the like are sometimes up and sometimes down. These are the numbers I was able to find from the City’s website (City of Oklahoma City) starting at the Budget & Finance tab:
2002 FY = $10M shortfall
2003 FY = $12 to 19.1M anticipated shortfall
“All General Fund departments had to cut budgets. Police and Fire were required to cut 2% of their budgets and the other General Fund departments had to propose budget cuts of 11% – the biggest reductions we’ve had in years.”
“Our budgets are always tight due to employee costs – even when revenues were growing 5% a year. But the level of cuts necessary next year will affect our core services – parks, animal control, street maintenance and public safety. All these services depend on workers.”
2004 FY = ???
2005 FY = $210M Surplus (where did the money go?)
2006 FY = $17.88M Surplus
“Programs have been expanded and positions have been added only in critical areas where reductions in past fiscal years have negatively impacted the ability to provide services.”
So we were playing catch-up again.
2007 FY = $1.3M Shortfall
“... sales tax, the City’s largest revenue source, growing at about six percent”
But since there was an overall shortfall, expenses exceeded growth.
2008 FY (then the economy hit...)
“... revenue growth began SLOWING from the trends seen in the past two fiscal years. Sales tax, the City’s largest source of revenue grew at 3.95%, which is BELOW NORMAL GROWTH trends. Projections for FY 2009 are for continued LOWER LEVELS OF REVENUE GROWTH. This trend, along with anticipated growth in expenditures to continue current service levels, has limited the City’s ability to increase services. Expenditure growth in the budget is primarily related to fuel costs, maintenance contracts for new public safety technologies, and personnel related costs.”
“Although the number of City staff has increased in the past few years, we are still operating BELOW 1994 STAFFING LEVELS.”
City budget to be tight (5/6/2008)
“The $788.7 million Oklahoma City budget unveiled today includes money for 30 new jobs in various departments, but SLOW GROWTH IN CITY REVENUE WILL BARELY COVER RISING FUEL COSTS AND PERSONNEL EXPENSES, city officials said.”...
2009 FY (the economy worsened)
“REVENUE GROWTH SLOWED during the current year and, since January, SALES TAX REVENUE, our largest revenue source, BEGAN TO SLOW SIGNIFICANTLY. Over the past four months, sales tax declined from the previous year by 1.8% and is projected to finish the year with less than 2% growth over FY 2008. ...
“Sales Tax growth has slowed in FY 2009 after a good FY 2008 and two prior years of exceptional growth. By year-end, it is expected that Sales Tax growth for FY 2009 will come in at 1.7%, compared with growth in the prior three years of 4.0%, 6.0% and 6.9%. To put these years in perspective, the 10-year average for sales tax growth is 4.3%”
General Fund [non-dedicated] Sales Tax History
(bar chart, numbers are approximate)
FY 06 = $162M
FY 07 = $172M
FY 08 = $178M
FY 09 = $182M (est)
FY 10 = $187M (est)
From the 5 year forecast report
General Fund Revenue and Expenditure (chart pg 61)
FY 04 thru 06 = slight surplus (chart doesn’t show the $210M surplus in the official City budget document??)
FY 07 thru 09 = slight shortfall
FY 10 thru 14 = shortfall increasing to $24.7M
“State law mandates a balanced budget so every year the City must close the gap.”
“Without additional staffing, departments will have to look at cutting current services to provide new or expanded services in other areas. BECAUSE DEPARTMENTS HAVE BEEN TAKING CUTS FROM A SAME SERVICE LEVEL BUDGET FOR MANY YEARS, departments have been actively pursuing more efficient ways of operating.”
As far as “quality of life” that is certainly true, but most articles I have read over the years that list what companies are looking for when considering relocation, the Quality of Life issues commonly mentioned (in no particular order):
• Skilled workforce
• Taxes
• Quality schools
• Roads
• The “Arts” (ballet, symphony, museums etc);
• Recreation facilities (those that encourage participation rather than observation) like parks, biking & walking trails, tennis courts, softball fields, soccer fields and even basketball courts.
That’s why I actually am in favor of most of the projects in MAPS 3, they are items that Government should be supporting. My issues with MAPS 3 so far is the Ballot and Ordinance language where NONE of the 8 announced projects are mentioned or referenced.
Larry, regardless of your attitude towards sports, a shockingly high number of people put sports in their "quality of life" list regarding relocation or simply reasons to stay somewhere. I believe it would fit in with "The Arts" which is usually called "arts and entertainment" or "arts and leisure". We could have the most beautiful art museum, or the best ballet in the world here (both of which would please me, as I'm rather catholic in my tastes), and it wouldn't give us the cachet that a professional team does.
Because we're a city that people rarely think about, or get excited about visiting, we have to do it better than other comparably sized cities that have beaches, mountains or other attractive features. I'm almost embarrassed to admit it, but, when my fiancee told me he was considering a job here (we lived in Denver at the time), my response was, "Why? I've visited almost every state in the union, and my parents never took me to Oklahoma. There must have been a good reason. You know you can't ski or kayak there, and for me, there are no sports but the Sooners." I wasn't very happy about the prospect of moving here, and when we got here (pre MAPS) I was even less happy. It's taken many years of ongoing improvement to make this a city I'm not trying to get away from. When I go back to Denver, or visit my daughters in Chicago, I see what we could become, over time, if we keep working at it.
Eloquently stated and great observations, Betts.
agreed betts. OKC may not be the creme de la creme of american cities, but it is making real progress, and people all over the country are starting to notice. which is why ya'll should keep the momentum going with MAPS 3.
While individuals may indeed rank sports highly, what I was talking about was at the Corporate level. What companies have specifically said they were going to relocate or not relocate depending on a pro-sports team?
Do you have any articles etc that you can direct me to on that? As I have said, every one that I have seen over the years mention the things I listed off, sports (especially pro sports) was way down on the list if mentioned at all. Don't recall seeing any that lumped it together with the "Arts".
To be clear, I am not anti-sports or anti-NBA.
Sorry, metro. One more and then I promise I quit. I found an article by a consulting company manager whose company "provides site selection services and economic development consulting to companies and organizations worldwide." Although he states quality of life issues regarding recreation and leisure are different for different people, the widespread popularity of professional sports certainly supports the assumption it's a factor.
http://www.mccallumsweeney.com/uploa...llum_8_07b.pdf
"So, what are some of the important characteristics for any
quality of life assessment? Generally speaking they can be
divided into the following:
• Education
• Housing
• Crime & Safety
• Healthcare Quality and Costs
• Spouse Employment Opportunities
• Child Care Cost & Quality.
• Recreation & Leisure Activities
• Mobility
Recreation & Leisure Activities
This factor is probably the hardest to evaluate among all of
the quality of life factors. Everyone is different. As a
consequence, everyone enjoys a myriad of activities that
are different as well. Some love the arts or crave
professional sports, while others enjoy hunting or skiing.
There are some that enjoy a wide variety of shopping and
entertainment that only a big city can provide, while others
enjoy the bucolic setting of a small town with more
mundane pleasures. Some see a university as an
opportunity to provide many of these activities, as well as
educational opportunities, while others enjoy the college
sports. Identifying the target audience here is crucial
because tastes and preferences vary so much for this
factor."
Larry, I doubt that you will ever have a (non-ancillary) business make a public statement that they moved to or from a place because of professional sports or lack thereof. It wouldn't serve any positive PR purpose to do so. And in fact I can't imagine that it is ever the single reason anybody makes business location decisions. But it is a part of the overall picture.
But if you want a link from an independent source that acknowledges the importance professional sports holds for businesses making location decisions, check out the recent CNN/Money article on best places to launch a business. Despite the fact that Oklahoma City ranked number one in the U.S., the article pointed out that having only one pro sports team was in fact a shortcoming:
It's an important component in business location, and obvioiusly not just Chamber-types believe that.Oklahoma City has its drawbacks... ...forget about entertaining your visiting clients with top-notch sporting events: Oklahoma City has only one professional franchise, the NBA's Oklahoma City Thunder, which had its first season in 2008 and finished 26th in the league.
I don't think that any company will say that specifically, but you are essentially dealing with human nature. Companies often locate due to their access to quality human resources. While a company may not specifically be located somewhere because of sports teams or any other specific form of entertainment, individuals do make choices based on these factors and companies go where the people are.What companies have specifically said they were going to relocate or not relocate depending on a pro-sports team?
Now, of course, no one locates anywhere based on one specific sports team, but no one can deny that a great many people do locate places based on access to "stuff to do". Having professional sports is simply one piece of the puzzle in the "stuff to do" equation. In fact, I'd almost say that NOT having professional sports hurts more than having it actually helps, if that makes any sense.
Now, I think a lot of people here can list off the usual suspects of why living in Oklahoma City is good: accessible people, affordability, ease of living. However, I would bet that most college undergrads and grad students are not aspiring to live and work here as they are cities like LA, New York, or Chicago or even new growth cities like Dallas, Phoenix, Atlanta, etc. I mean to say that even if you asked them if they could have the same job with the same exact pay here as they could in any of those cities, most would choose those other cities, despite the added expense. Why?: Stuff to do. They want a good life which most people equate to having access to high quality goods and services, including entertainment, of which major league sports is a factor. I agree it is far from THE factor, but it plays a part, and it is, for better or worse, THE entertainment option with the highest profile. And, at the end of the day, many people simply want to be able to take their family to a ball game every now and then.
Now, Oklahoma City is in an inherently tough position because we can not sales tax our way to beaches, mountains, wilderness, weather or other highly valued natural beauty resources that seem to attract people. We have to build assets that are attractive to people in a way that makes them feel that, by living here, they can have access to the life they have worked to achieve.
Why? Because, despite our amazingly competitive cost of living, companies know that they still can not attract the top human resources they desire when their competitors are in New York, Chicago, or even Phoenix or Denver hiring from a larger talent pool with more higher educated people. And those people are there because of a higher perceived quality of life, in large part because there is simply more "stuff to do". More and more, people choose where they want to live after college and then find a job in that market.
The reality is that Oklahoma City, first and foremost, needs to keep its higher educated workers here. It needs people in the state's higher education system to want to stay here after they graduate. Does one specific sports team change that? No, but it does begin to change the tide in a positive way. It begins to make the city appear to be a viable option. When you begin to add in other higher quality services and entertainment that are supported by and made possible by large investments in public assets and you begin to have something you can sell to people. And if you can start selling it to people (without a chuckle in response), you can start selling it to companies.
Many may not want to hear it, but really our investment in the city over the past 20 years through MAPS and other measures have been more part of an effort in mitigation than true elevation. These projects have kept us from being completely irrelevant on the national stage, in terms of attracting human resources. And the only reason it has succeeded in doing that is because it was comprehensive and not focused on one specific project, like ONLY an arena or ONLY one sports team. It will probably take more investment if we want to ever be competitive with other regional large markets, like Denver or Dallas, but we have started and it is beginning to feel like Oklahoma City may have a future it can really be proud of and, while the Thunder is not THE reason for that, it is one piece of a puzzle that has many pieces.
Now, one can argue the pros and cons of the deal the city made with the Thunder, and there's definitely a lot of merit to that. I think we gave too much away in some aspects (naming rights!), but also have to realize our leverage position. You basically have Los Angeles and the privately financed Staples Center on one end of the spectrum and Oklahoma City on the other. In the end, we made a decision to collectively support the venture by taxing ourselves because we thought the benefit to our community was worth the investment beyond a simple direct cost/benefit analysis. Of course, no company is going to make a decision to move here specifically based on that ONE deal. But, hopefully, there are a lot more college students and people with the prospects of moving here thinking: "maybe it's not that bad after all." If so, then you have the very beginnings of what is hopefully an economic snowball.
so, about those Ford Center renovations...............anyone have any feedback after attending a preseason game?
Oh sorry, I didn't realize that Metro was finished with his participation in the tangent, so we were all supposed to stop as well...
The seats do seem roomier and comfier. The scoreboard is amazing, although, since I sit in the end fairly low, I have to tilt my head back to see the scoreboard well (no Bennett wedge for us cheaper seats). I think the terrace mini suites are a bit odd looking, with a solid white appearing wall dividing them, but haven't sat in them to tell if they're nice, which is probably all that matters. I'm sad that the Johnsonville fast food kiosk has been replaced by Schwab's as that was my bad for you food guilty pleasure a couple of times a week. I heard the Ice House looks the same, which I assume means you can still see the metal studs, but I would guess that is a next year improvement. I'll take a stroll up to Loud City tomorrow night and see how it looks.
Thanks for the feedback and will consider all that was mentioned.
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