Oklahoma City voters consider 1% sales tax to build a $1 billion arena for NBA's Thunder

OKLAHOMA CITY — When a group of Oklahoma City investors moved the NBA's SuperSonics from Seattle in 2008 and renamed the franchise the Thunder, civic pride soared with the arrival of the state's first major league sports franchise.

Since then, the Oklahoma City Thunder have played their home games in what is now a modest arena by NBA standards. But the team owners want a new arena, and under a deal they struck with city leaders, they want taxpayers to pick up the bulk of the $900 million price tag.

Oklahoma City voters will decide Tuesday whether to approve a six-year, 1% sales tax to help finance construction or risk the same fate as Seattle: losing the team to another market. But some residents and experts who have studied public-private partnerships say the deal is much better for the wealthy team owners than for the average resident.

Under the plan before voters, the new arena would cost at least $900 million, with Thunder owners contributing 5%, or $50 million. The team would also agree to stay in the city for another 25 years.

Many city residents say the deal is far too generous for the Thunder owners, who include some of Oklahoma's wealthiest residents, especially at a time when most arenas are funded primarily by private investment or a much smaller public investment.

“It's such a huge amount of money for the citizens, which doesn't seem like a very responsible use of our money,” said Natalie Lucero, a 29-year-old Oklahoma City resident who said she plans to vote no.

“Moreover, it is a regressive tax that hits the poorest people,” she said. “It just doesn't feel right to me.”

The Oklahoma City Thunder, purchased by a group of local businessmen for $325 million, is now valued at more than $3 billion, according to Forbes' most recent estimate. A team spokesperson did not respond to multiple requests for comment on the proposal.

“These guys have made almost $2.7 billion, and they're going to tell us they can't afford a $1 billion arena?” said Nick Singer, a local real estate agent and organizer of the opposition group Buy Your Own Arena.

Singer and others also raised concerns about the lack of price caps in the $900 million cost estimate, saying there is no ironclad guarantee that the owners will remain in Oklahoma City even if the arena is built.

Oklahoma City Mayor David Holt, one of the plan's biggest cheerleaders, said there are many benefits to having a major league sports franchise that simply can't be calculated in a spreadsheet. He said when he talks to investors and job creators in other places, Oklahoma City has a tangible cachet that it didn't have before it landed the franchise.

“The point of having a major league professional sports team in American life is that it commands respect, that people realize that it is a city that has to have enough people, enough business presence, enough general resources to be one of to house the largest brands in the world,” the spokesperson said. said Mayor.

Jon Echols, a Republican lawmaker who represents the city's south side and said he plans to vote in favor of the proposal, said the team's impact on the city's overall renaissance cannot be understated.

When he was a young clerk 20 years ago, Echols said city leaders at the time hoped a store would come downtown. Other than an old jewelry store and a few lunch cafes, there was hardly any retail in the area and the city center was practically a ghost town in the evenings and on weekends.

“We've gone from that to an absolute economic explosion,” Echols said. “It's hitting everywhere.”

Since the arrival of the Thunder, a massive new public park and convention center has been built near the arena, development along the riverfront has taken off, and downtown shops, restaurants and housing have exploded.

“It's helped build a lot of city pride among everyone, and that's the momentum we need to keep going,” Echols added.

Yet economists who study arenas and their impact on cities say research consistently shows they have little tangible economic impact in the community and that government subsidies for arenas and stadiums far exceed any financial benefits they could have.

A group of more than two dozen Oklahoma-based economists and finance professors published a letter on Dec. 4 encouraging a “no” vote on the new arena, which they say would have no meaningful impact on economic growth and instead use public money would distract from the new arena. other needs and at the same time taking on new debts.

They also pointed out that for the twelve new arenas and twelve new stadiums built in the US since 2010, the average government expenditure was about 42% and that three arenas have been built without public money since 2020.

“Alternatives that involve greater ownership or private financing would be superior options for the city,” the economists wrote.

J.C. Bradbury, an economics professor at Kennesaw State University in Georgia who has extensively studied public policy toward arena and stadium construction, is even more blunt in his assessment of Oklahoma City's proposal.

“Whoever negotiated this for the city of Oklahoma City should be fired for incompetence,” said Bradbury, who said his main concern is the lack of price caps.

“If you tell me an arena will cost a minimum of $900 million, with no caps, you've just committed to a $2 billion arena,” he said. “It is by far the worst stadium deal I have ever seen negotiated from a public standpoint.”