Oklahoma City ‘close’ to agreement on Thunder arena proposal

Oklahoma City Mayor, David Holt, has said a deal is close to being reached on a “jointly agreeable proposal” that will construct a new downtown arena for NBA basketball franchise the Oklahoma City Thunder.

The future of Paycom Center, the Thunder’s current home, made up a significant proportion of the State of the City speech Holt delivered yesterday (Thursday). Holt’s latest comments come a year on from when he called for discussions on a potential new arena.

Paycom Center opened in 2002 and the team has played at the arena since 2008, when it relocated from Seattle. In 2008, the city signed a 15-year lease agreement with the Thunder, and last year the team activated a further three-year option, ensuring its future at Paycom Center until at least 2026.

However, in the hyper competitive world of US arena development, Holt knows the city’s current venue is falling behind modern-day standards. He said: “I can report to you that we are close to a jointly agreeable proposal that will construct a new downtown arena that meets the modern standards of the NBA and the concert industry. We believe we can and must present this agreement before the end of summer, with an election before the end of 2023.

“It is worth noting that more time has gone into this conversation than any of the previous similar conversations that occurred in 2005 and 2008. In 2005, the discussions to relocate the Hornets to Oklahoma City lasted mere weeks and the City Council had only a few days to consider the main points of the agreement.

“In 2008, the City Council and the public only had two weeks to consider the main points of an arena upgrade package before it was sent to the voters. Those were unique circumstances. Fortunately, here, we had more time here and we have used it.

“Though an agreement remains to be finalised and much remains fluid, I can still share some important takeaways that we believe will hold true. We believe our new arena can be funded without raising tax rates above their current levels. We believe we can accomplish this vital project simply by paying the exact same sales tax rate we pay today. No tax increase will be necessary.

“The public funding necessary to build the new arena will be supplemented by remaining MAPS 4 dollars that are already earmarked for the downtown arena, as I mentioned last year. And for the first time in city history, these public funding commitments will be joined by a significant financial contribution from the ownership of the Oklahoma City Thunder. 

“You’ve heard me speak today about the way our city’s new arenas have inspired us in the past. All of us in today’s process are committed to a building that inspires like never before, that raises the bar for public spaces and the user experience. The architectural ambitions of this new arena will exceed anything our residents have ever experienced.”

In March 2022, the city council outlined plans for a $105m (£81.7m/€94.4m) renovation of Paycom Center as part of a wider project to enhance the guest experience at the arena. The venue is owned by the City of Oklahoma City, which selected global architecture design firm Populous to develop a masterplan for the renovations.

Despite this planned work, Holt believes the Paycom Center building is a “growing liability”. He added: “As we sit here today, Paycom Center is sitting right at the average age of all NBA arenas. Twenty-one years is about the average. A new arena seems to open every year, and several teams are currently planning new ones, so that average age probably won’t get too much higher, but our arena will keep getting older.

“Other than Madison Square Garden, the oldest of all NBA arenas is just 32 years old. Ours is 21 and if you paid any attention a few moments ago to the pace of our history, you know that a new arena would not open for years, even if we started planning today. Without action soon, we’ll eventually be sitting on one of the oldest arenas in the NBA.

“Another comparison. Paycom Center is the second-cheapest arena in the NBA, having received at this point a total investment of around $200m. I know that sounds like a lot of money, but to give you some sense of perspective, the most recent NBA arena to open was Chase Center in San Francisco in 2019. It cost $1.4bn.

“The year before that saw the opening of Fiserv Forum, home of the Milwaukee Bucks. That cost $524m. The next NBA arena to open will be the new Los Angeles Clippers arena, slated to open next year. It will cost $2bn. The Philadelphia 76ers recently announced new plans for an arena expected to cost $1.3bn.

“After the Clippers arena opens, a third of all NBA arenas will have construction costs that were originally in excess of at least $475m, a number that is more than twice what we have invested in our arena.

“We’re not in the junior NBA, we’re in the real deal, and these are our peers. But if those comparisons are sobering, I don’t even want to tell you about the billion-dollar arenas that exist or are planned in American cities that don’t have an NBA team.

“In fact, there are 18 metropolitan statistical areas larger than Oklahoma City that don’t have an NBA team, and several of them have existing or planned arenas that dwarf ours. I don’t want to give them any ideas so I won’t mention their names, but use Google and your imagination.

“We always have to remember three things – there are a dozen North American cities that used to have an NBA team, there are 18 metros bigger than ours that would like to have a team, and remember how we got this team.”

Commenting on Holt’s declaration, Dan Mahoney, Thunder vice-president of corporate communications, told The Oklahoman: “The Thunder is proud of our partnership with the city of Oklahoma City and our community over the past 15 years.

“We commend Mayor Holt for his leadership and vision and look forward to advancing the discussions for a new arena as a centrepiece of a downtown Oklahoma City of the future.”