NY Times: Public Financing of Stadium Deals Not Working Out

[Rover]

There is a HUGE difference in evaluating whether a venue is producing positive revenue on a standalone basis versus the NET POSITIVE EFFECT of having the venue and what it brings.

I am glad the Ford Center provides positive cash flow for the city, but am more pleased with the increased taxes like the sales and property taxes due to the increased traffic and construction in the area that is directly or indirectly tied to the Maps improvements of which the Ford Center is an essential element. Our city did a great job of PLANNING for this to be successful for the city. Indirectly, the PR our city is receiving is unbelievable. As I travel all over the country and work with large companies throughout, I can tell you the business leaders I deal with are much more positively impressed with OKC and inclined to look at expansion here. Our vision and action has been impressive. Nationally, NO ONE ever thought of OKC as positively as they do right now. And just wait till we engage in the Maps 3 development. People will be shocked at how much momentum this gives OKC.

[bdhumphreys]

Now, if there were debt servicing on it, that might be a different story.

Glad it is netting a profit on the operations. That is not necessarily a given. That said, I am glad you included the qualifier, because it is an important distinction.

[Stan Silliman]

Pssssttt.... can you keep a secret???
Promise?
(Ford Center has been a money maker for the city)

Totally correct. The Ford Center is the biggest construction bargain any city has ever got on an arena. First off, it was designed to be inexpensive. Secondly, it was built during one the most competitive construction markets and third, the contractor made an error and bid the job $ 6 Mil cheaper than its competitors and then honored their bid.

You don't get deals like that everyday.

[Stan Silliman]

While at it, might as well put up this article I wrote in 2004.
Here's a link: Edifice Complexes

[Larry OKC]

... the contractor made an error and bid the job $ 6 Mil cheaper than its competitors and then honored their bid.

You don't get deals like that everyday.

I vaguely remember the bidding snafu (happen to have a link on it?)

We thought we were getting a great bargain at the time because the City's budget was for $81M and the bid came in @ $64.8M. According to the City's website, final cost was $87.7M (during construction estimates had risen as high as $94M.)

Between the bid and the final cost, that is an increase $22.9M. How is that "honor[ing] their bid"?

Benham Selected for MAPS Sports Arena | Journal Record, The (Oklahoma City) | Find Articles at BNET
Benham Selected for MAPS Sports Arena (Journal Record, 3/22/95)
"... $81 million budget. That price is in the middle range of similar arenas that have been built between $37.3 million and $175.1 million."

Council launches $64.8 million arena, Journal Record, 4/7/99
Council launches $64.8 million arena | Journal Record, The (Oklahoma City) | Find Articles at BNET

Hopefully we don't experience the same thing with the Practice Facility (it's bid came in about half of what was budgeted which is a good thing, but as seen above something that looks good at first may not end up that way).

[rcjunkie]

I vaguely remember the bidding snafu (happen to have a link on it?)

We thought we were getting a great bargain at the time because the City's budget was for $81M and the bid came in @ $64.8M. According to the City's website, final cost was $87.7M (during construction estimates had risen as high as $94M.)

Between the bid and the final cost, that is an increase $22.9M. How is that "honor[ing] their bid"?
Benham Selected for MAPS Sports Arena | Journal Record, The (Oklahoma City) | Find Articles at BNET
Benham Selected for MAPS Sports Arena (Journal Record, 3/22/95)
"... $81 million budget. That price is in the middle range of similar arenas that have been built between $37.3 million and $175.1 million."

Council launches $64.8 million arena, Journal Record, 4/7/99
Council launches $64.8 million arena | Journal Record, The (Oklahoma City) | Find Articles at BNET

Hopefully we don't experience the same thing with the Practice Facility (it's bid came in about half of what was budgeted which is a good thing, but as seen above something that looks good at first may not end up that way).

The increased cost was due to change orders, not adjustments to errors in original bid.