An economic impact study on the OKC NBA arena is out. Do the numbers justify a new one?

Debate intensifies around the proposal to build a new NBA arena in downtown Oklahoma City to house the Thunder basketball team. Crucial to the issue is the economic justification for constructing a new facility, at a proposed minimum cost of $900 million, with most of it to be funded by a six-year, one-cent sales tax from Oklahoma City residents, set to begin after the current MAPS 4 tax expires in 2028.

With one month left to campaign for the proposal before a Dec. 12 election, the Greater Oklahoma City Chamber unveiled last Wednesday the results of an economic impact study on the city's current arena, Paycom Center. The study's findings are expected to drive discussion about the arena in the weeks ahead of the vote and beyond.

What does the study say?

Conducted by Applied Economics out of Phoenix, the study encompassed an analysis of personnel activity and sales revenue at the current arena, as well as the possible economic impact of a new downtown arena.

The study drew from data provided by ASM Global on more than 40 of the Oklahoma City Thunder's home games, the Oklahoma City Blue's 23 home games, and about 50 other concerts and sporting events at the Paycom Center. Researchers said more than 1 million people attended events at the venue during the NBA 2022-2023 season.

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What is the economic impact of the current arena?

According to the study, Applied Economics found an estimated annual impact of $590 million in support of more than 3,000 jobs.

The operations at the arena by the Thunder team and staff amounted to an estimated impact of $513 million, directly and indirectly supporting nearly 2,500 jobs and $273.8 million in annual wages, salaries and other labor income every year, according to the study.

Research in the study also suggested that the arena supports an estimated $45.5 million in yearly visitor spending outside the arena for lodging, food, retail and transportation. That activity also generates an additional $77 million in "induced," or household, spending per year, supporting 795 jobs at local businesses.

"This study, using real inputs from arena activity, makes it clear that the impact on our economy is significant," Christy Gillenwater, CEO of the Greater OKC Chamber, said in a statement recently. "There is an important impact to the families dependent on the arena activity — those that work in the building, along with restaurants, hotels and companies that provide goods and services to the arena."

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What could the economic impact of a new arena be?

Researchers also estimated the potential effect of a new arena's construction for Oklahoma City's economy, which would cost a minimum of $900 million. The study said the "hard costs" of building a new arena amounted to at least $693 million, which would carry further economic impacts.

The study claims that, due to the multiplier effect on local spending, the total impact from a new arena construction could increase to nearly $1.3 billion in economic activity over the years it takes to build it. Also, the project could support an estimated 10,250 jobs through contractors and suppliers, along with more than $572 million in labor income, according to the study.

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How much local tax revenue might be generated by the arena?

Applied Economics also outlined sales tax totals paid by locals, non-local visitors, Thunder players and staff, and arena workers.

According to the study, the arena supports a total of $9 million in city taxes annually. County, school and other local district taxes total $4.1 million, while state taxes total more than $17 million annually.

Eric Long, the Greater OKC Chamber's research economist, told The Oklahoman that the numbers indicate the arena's importance in helping support the city's services and quality of life. Ultimately, however, the study “doesn’t try to solve the lifelong question of if we should use government or public funds to build something,” the economist said.

“It really comes down to the fact that you’ve got residents in Oklahoma City who are going to get together and they’re going to decide if they want to spend that one penny (sales tax) on something special,” Long said. “Do they want a new arena? Do they want a nicer place to go for music concerts that may attract new venues? And do they want to ensure that the Thunder are going to be around for years to come? That’s really a decision that is made by the individual citizens, and that impact study is not going to tell us one way or the other.”

This article originally appeared on Oklahoman: Study claims NBA arena could boost OKC economy by up to $1.3 billion