New Downtown Arena

[Teo9969]

They may be barely giving any money towards the stadium but they've painted Thunder logos on, like, at least 4 or 5 basketball courts in the city. I'd say they've given enough.

Either side of this, this is funny right here!!

[PoliSciGuy]

I am not a thunder fan ... but over 25 years the Thunder in USA and world wide PR alone bring well over 750mil in value ..

and then there is the actual value they bring to OKC which is also huge ..

I would love to see your math on that.

also the BUCKS team is the operator of the entire arena ... as in they get all the money from concerts and other events ... and only pay the city 1 mil a year (increased based on inflation)

that is a KEY difference in how we operate and some of the other examples given ..

You're absolutely right, that is a critical factor...which is why it is worth criticizing this proposal for a lack of transparency when these details are not yet known and may never be known publicly.

[PoliSciGuy]

Honestly the ownership could put up 0% and we still need to accept this. What is the magic number? I see posts in here saying 10%, 50%, 100%? When the estimated price tag of the arena was around $750MM, 10% would be $75MM. SO you want to die on a hill for $25MM?

Let's look at the newest NBA stadiums as some (admittedly not perfect) comparisons:

Intuit Dome (LA Clippers)
Cost: $2B
Owner contribution: 100%

Chase Center (GS Warriors)
Cost: $1.4B
Owner contribution: 100%

Fiserv Forum (MIL Bucks)
Cost: $1.2B
Owner contribution: 50%

Little Caesar's Arena (DET Pistons)
Cost: $862m
Owner contribution: 40%

Golden 1 Center (SAC Kings)
Cost: $558m
Owner contribution: 50%

Barclays Center (BKN Nets)
Cost: $1b
Owner contribution: 49%

Amway Center (ORL Magic)
Cost: $480m
Owner contribution: 10.5%


So what we see is that Orlando is an outlier, with most owners usually splitting the bill with the city if not outright building it all on their own. I think asking for 40%, or around $400m, would be appropriate. A significantly higher hill than $25m.

Sacramento is a great comparison here, as it too does not have any other major league franchises yet was still able to extract some decent concessions.

[BoulderSooner]

Let's look at the newest NBA stadiums as some (admittedly not perfect) comparisons:

Intuit Dome (LA Clippers)
Cost: $2B
Owner contribution: 100%

Chase Center (GS Warriors)
Cost: $1.4B
Owner contribution: 100%

Fiserv Forum (MIL Bucks)
Cost: $1.2B
Owner contribution: 50%

Little Caesar's Arena (DET Pistons)
Cost: $862m
Owner contribution: 40%

Golden 1 Center (SAC Kings)
Cost: $558m
Owner contribution: 50%

Barclays Center (BKN Nets)
Cost: $1b
Owner contribution: 49%

Amway Center (ORL Magic)
Cost: $480m
Owner contribution: 10.5%


So what we see is that Orlando is an outlier, with most owners usually splitting the bill with the city if not outright building it all on their own. I think asking for 40% would be appropriate. Sacramento is a great analogy here, as it too does not have any other major league franchises yet was still able to extract some decent concessions.

lets look at your example ..

fiserv was just over 500 mil for one ... and for 2 the city makes 1 mil a year from fiser PERIOD >. the team controls 100% of the arena .. and makes all money off of it ..

the NETS control all of Barclays center city doesn't make the money off of it

little ceasors the city doesn't make money off of it or control it at all .. not even lease money

golden one kings pay a lease and control the enitre facility ..

intuint and chase are private ventures in massive ciites .. (not comparable at all )



amway is run by the city of orlando it is the only one the is comparable ..

[BoulderSooner]

So what we see is that Orlando is an outlier, with most owners usually splitting the bill with the city if not outright building it all on their own. I think asking for 40%, or around $400m, would be appropriate. A significantly higher hill than $25m.

Sacramento is a great comparison here, as it too does not have any other major league franchises yet was still able to extract some decent concessions.

this is because in those other examples the cities are contributing a big % and in effect don't own the arena at all .. (basicaly the cities are taking a loan from the team to build the arena with terrible terms)

[BoulderSooner]

You're absolutely right, that is a critical factor...which is why it is worth criticizing this proposal for a lack of transparency when these details are not yet known and may never be known publicly.

we know how OKC will operate the new arena .. they will do it the same way they operate Paycom ..

[Pete]

Just because you keep repeating that the decision isn't binary doesn't mean it is or isn't. And Holt has zero control on whether the Thunder leave or not. There is a lease with the city that runs out in 2026, after that the team has no legal obligation to stay in OKC and the owners (financially) and organization (bigger market equals better chance at free agents) would be massively incentivized to move elsewhere.

Of course it isn't binary. Why would it be? Why would this deal be the first in the history of sports to be non-negotiable?

And as you mention, there are at least 3 years to negotiate.

[PoliSciGuy]

we know how OKC will operate the new arena .. they will do it the same way they operate Paycom ..

Do we know that? Where in the release did they state that?

[bucktalk]

Would we be having this discussion if the Thunder was on a back to back winning streak?
I wonder......

[April in the Plaza]

Do we know that? Where in the release did they state that?

Isn’t it implied by the team signing a 25 year lease?

[BDP]

Let's look at the newest NBA stadiums as some (admittedly not perfect) comparisons:...

Of course, those are all the front end numbers and no details of the arrangements included. What are the leases, district overlays, tax exemptions, who actually "owns" the arena, operates it, and participates in what revenue and at what share, etc. etc.

For example with the Milwaukee deal:

The BucksÂ’ owners are credited with paying half the costs of the new $500 million arena, with taxpayers the rest, in typical media accounts. But that leaves out all kinds of other subsidies charged to taxpayers that lower the facilityÂ’s cost for the owners: a sales tax exemption on building materials, equipment and supplies to build the arena, a property tax exemption on the arena, a sales tax exemption on luxury suite revenue and all retail sales within the arena, the interest payments on bonds issued to pay for the arena, and various other charges that brings the total bill for taxpayers to at least $800 million as IÂ’ve previously estimated. These are all costs a for-profit business would normally pay, but the billionaires who own the Bucks will never be charged over the likely 30-year life of the arena.

https://urbanmilwaukee.com/2019/04/1...-brewers-rich/

So, yeah, the upfront contributions can be very misleading and certainly can't really be quantitatively or qualitatively evaluated without knowing everything else about the arrangement.

If the Thunder straight up give $50MM to the project without adding a myriad of concessions or grabbing more revenue streams from the arena while committing to a long term lease with substantial buy-out penalties, it could actually be a better deal for the city over the term of the lease than the Milwaukee deal. Fiserv is actually owned by the "Wisconsin Center District", which is defined as a "semi-autonomous municipality called a 'district,' meaning its Board members are appointed by elected officials, and it can issue bonds and collect taxes within strict limits established by statute." https://wcd.org/about-the-wcd/

If anyone wants to dig into Wisconsin statues and unpack that, be my guest. lol

Of course, none of that runs counter to the 'rich getting richer off the state' concerns. It actually sounds worse in a lot of ways, imo. But the point is, it is hard, and maybe even specious, to compare the Thunder's $50MM contribution to some other ownership participation without knowing what's on the other side of that money.

[Pete]

^

You keep bringing up the other terms like that will somehow make up for the lack of owner investment.

Based on every single other deal the City has done with the Thunder (hundreds of millions in upgrades, a free practice facility, willing to give them a plum deal for Thunder Alley, and what we know about the new arena), there is substantial evidence to suggest the opposite will be true.

[PoliSciGuy]

Of course, those are all the front end numbers and no details of the arrangements included. What are the leases, district overlays, tax exemptions, who actually "owns" the arena, operates it, and participates in what revenue and at what share, etc. etc.

For example with the Milwaukee deal:



https://urbanmilwaukee.com/2019/04/1...-brewers-rich/

So, yeah, the upfront contributions can be very misleading and certainly can't really be quantitatively or qualitatively evaluated without knowing everything else about the arrangement.

If the Thunder straight up give $50MM to the project without adding a myriad of concessions or grabbing more revenue streams from the arena while committing to a long term lease with substantial buy-out penalties, it could actually be a better deal for the city over the term of the lease than the Milwaukee deal. Fiserv is actually owned by the "Wisconsin Center District", which is defined as a "semi-autonomous municipality called a 'district,' meaning its Board members are appointed by elected officials, and it can issue bonds and collect taxes within strict limits established by statute." https://wcd.org/about-the-wcd/

If anyone wants to dig into Wisconsin statues and unpack that, be my guest. lol

Of course, none of that runs counter to the 'rich getting richer off the state' concerns. It actually sounds worse in a lot of way, imo. But the point is, it is hard, and maybe even specious, to compare the Thunder's $50MM contribution to some other ownership compensation without knowing what's on the other side of that money.

You are right, it is difficult to make a good comparison because we don’t have those details. Which is why it would be good to actually see the details of the lease before we sign off on spending $900 million in taxpayer money.

[BoulderSooner]

^

You keep bringing up the other terms like that will somehow make up for the lack of owner investment.

There is at least an equal chance they will get incredibly favorable terms on that part of the deal as well, based on every single other deal the City has done with the Thunder (hundreds of millions in upgrades, a free practice facility, willing to give them a plum deal for Thunder Alley, etc.).

Milwaukee bucks pay 1 mil a year (increased yearly by inflation) and then get all revenue from every event at the arena .. all year long .. the thunder new lease will not be like that ..

[Teo9969]

Milwaukee bucks pay 1 mil a year (increased yearly by inflation) and then get all revenue from every event at the arena .. all year long .. the thunder new lease will not be like that ..

I'd love to see those details to know that's the case

[PoliSciGuy]

Milwaukee bucks pay 1 mil a year (increased yearly by inflation) and then get all revenue from every event at the arena .. all year long .. the thunder new lease will not be like that ..

You sure seem to be speaking like someone who has seen the lease and know itsdetails. Would you mind sharing with the rest of class? Or at least couch your comments in the fact that you are merely speculating like the rest of us, because there are no details.

[Teo9969]

The fact of the matter is that OKC is the third smallest NBA market and the team finished dead last in attendance last year.

If you want the team to stay in Oklahoma City, you are going to have to pay. It's not a great deal, but it is the deal you have and should take it.

It's almost like people found plenty of other things to do with their money and time.

Would you say Tulsa is pretty awful since they don't have a professional franchise? How about Austin?

I want the Thunder. I'd even be okay with spending a billion to do so. I'm not okay with the level of risk the city is holding onto for what amounts to a decade of developmental progress.

[BDP]

I'd love to see those details to know that's the case

the “Permitted Uses” by the Team
under the Team Agreement, (iv) to host other Events, including other professional or amateur
sporting and competitive events, exhibitions and tournaments . . . concerts and other musical
performances, theater performances, family shows, other forms of live entertainment, award
shows, charitable events, private parties, conventions, trade shows, exhibitions, markets, fairs,
meetings and community- or civic-oriented events,

https://law.marquette.edu/assets/spo...%208-14-18.pdf

So, basically, it sounds like the WCD has leased the arena outright to the team. They operate it and can host, and presumably profit from, events such as those listed in the lease summary above.

And, they can do so with the tax exemptions and subsidies created by statute for the district and listed in the article I linked to above.

[Jersey Boss]

With a city owning the arena that means 0 in property taxes

[chssooner]

It's almost like people found plenty of other things to do with their money and time.

Would you say Tulsa is pretty awful since they don't have a professional franchise? How about Austin?

I want the Thunder. I'd even be okay with spending a billion to do so. I'm not okay with the level of risk the city is holding onto for what amounts to a decade of developmental progress.

You can't compare OKC and Austin. They are on different levels. And OKC is basically a bigger Tulsa without the Thunder. Nothing unique about OKC, blasé, a flyover city that no one outaide Oklahoma would care if a tornado destroyed. OKC needs the Thunder.

[chssooner]

With a city owning the arena that means 0 in property taxes

But, all the revenue from events there. Unlike most public-private partnerships.

[Teo9969]

You can't compare OKC and Austin. They are on different levels. And OKC is basically a bigger Tulsa without the Thunder. Nothing unique about OKC, blasé, a flyover city that no one outaide Oklahoma would care if a tornado destroyed. OKC needs the Thunder.

"Hyperbole for effect usually has a negative impact."

Most cities are not that unique. Successful cities are about quality of life. Professional sports is only one aspect of a continually improving QoL in OKC. Losing it does not make this city suck.

[BoulderSooner]

https://law.marquette.edu/assets/spo...%208-14-18.pdf

So, basically, it sounds like the WCD has leased the arena outright to the team. They operate it and can host, and presumably profit from, events such as those listed in the lease summary above.

And, they can do so with the tax exemptions and subsidies created by statute for the district and listed in the article I linked to above.

thanks for posting that .. the full lease is searchable as well ..

[PoliSciGuy]

https://law.marquette.edu/assets/spo...%208-14-18.pdf

So, basically, it sounds like the WCD has leased the arena outright to the team. They operate it and can host, and presumably profit from, events such as those listed in the lease summary above.

And, they can do so with the tax exemptions and subsidies created by statute for the district and listed in the article I linked to above.

Note that this is the lease that expired a couple years ago. There’s no indication that this framework is what will be applied to the new arena. Given how little leverage the city has, I would not be surprised if the Thunder push to make the lease even more team friendly. Which again is why it is so critical to see the actual details of the new lease before signing off on this.

[Jake]

https://www.fieldofschemes.com/2023/...t-raise-taxes/