NBA arena plan finalized, OKC Thunder agrees to 25-year commitment, mayor says

Oklahoma City officials announced that they've finalized a highly awaited proposal Tuesday, which outlines plans for a new NBA arena for the OKC Thunder basketball team, expected to cost at least $900 million.

The proposal, city leaders said in a news release Tuesday afternoon, will illustrate preliminary plans for how the construction of the new arena will be funded and the benefits of retaining the NBA team's contract with the city.

Holt also said he and City Manager Craig Freeman would present the plan formally to the city council at the next meeting on Sept. 26. A majority vote of approval by the city council is required for a special Dec. 12 election, where residents can vote on whether or not to pass the package.

As part of the proposal presentation, the city council will receive a letter of intent signed by Oklahoma City Thunder Chairman Clay Bennett that commits the Thunder to play 25 years in the new arena if the vote passes.

Cost, timeline, and more: 6 things to know about OKC's proposed new Thunder arena

After MAPS 4 expires, temporary sales tax would take its place to pay for arena

The new arena would be primarily funded by a six-year extension of the city's temporary one-cent sales tax, which is currently funding MAPS 4 and was set to expire in 2028. The tax rate would be expected to stay the same as it is currently, with no tax increase, either, according to officials.

In addition, at least $70 million from MAPS 4 that was previously earmarked to go toward the current arena, Paycom Center, will now be used to fund the new arena.

The owners of the Oklahoma City Thunder have also said they will contribute $50 million toward the new arena, the first time such a contribution has been made to a publicly financed arena in the city's history, Oklahoma City Mayor David Holt said.

"The people of Oklahoma City have overwhelmingly expressed to me two desires — 1) keep the Thunder for as long as possible, and 2) don’t raise taxes if it can be avoided," Holt said in the news release Tuesday. "We have accomplished those two priorities with this plan, and it is truly a win-win for all of us."

In the meantime, the OKC Thunder is expected to continue playing at Paycom Center while the new arena is designed and built, with intentions of opening the new NBA venue by the 2029-2030 season, if not beforehand.

"For fifteen years the Thunder has been honored to help lead the transformation of Oklahoma City and enhance the tremendous pride our citizens have in their community,” Bennett said in a statement Tuesday afternoon. "We now have an opportunity to build on that progress, advance our status as a true big-league City, continue to grow our economy and secure the long-term future of the Thunder."

How they will build the arena by the 2029-2030 season while the sales tax won’t start until after MAPS 4?

Holt told The Oklahoman a short-term bank loan will be used to allow work to start prior to sales tax collections.

“We’ll utilize short-term borrowing methods, not bonds, and the upside of that is compared to our typical side of financing, there will be significantly lower borrowing costs,” Holt said. “It’s the difference between paying back over 30 years compared to payback over five to six years.”

More: How OKC Thunder ownership's contribution to new arena compares to NBA peers

City Manager Craig Freeman said the city will use a selection process to choose a bank and negotiate lending terms if the sales tax is approved by voters. The loan will likely be a line of credit, Freeman said, to allow the city to only borrow as much as is needed as the project proceeds.

Holt said all borrowing costs are being included in what will be raised by the sales tax.

“We had a choice to raise taxes or delay the project until 2034,” Holt said. “We wouldn’t have an NBA team if we did that.”

City seeking new arena to replace aging structure, keep Thunder in town

Since July 2022, Holt has been calling for construction of a new arena, in hopes of retaining the Thunder in Oklahoma City and further bolstering the city’s economy as a major tourist destination. Paycom Center is now two decades old, and is the smallest and second-cheapest arena in the NBA.

“My children will be my age when this agreement ends,” Holt said. “For a generation, we will retain the economic impact and quality-of-life benefits we have enjoyed as a big-league City. It is an investment that pays for itself many times over.  With this new arena, we will also continue the aspirational investments in ourselves that our residents have made for a century.”

Leaders with Oklahoma City and the Thunder had been engaging in “collaborative dialogue” for 14 months, according to the news release. But Ward 6 City Councilwoman JoBeth Hamon told The Oklahoman she was not involved in those conversations, and would have appreciated more time to contribute feedback and present the proposal to residents in her ward.

Hamon also voiced frustration with nearly $1 billion of taxpayer money, funded by the MAPS 4 penny-sales tax, going towards an arena, with other major concerns, like homelessness and mental health, not seeing nearly as much investment.

“There are a lot of other things that we can do with that penny that are critical infrastructure needs,” Hamon said. “I think we have a lot of competing needs in this city that regular everyday residents have expressed to me that we prioritize, and none of them include almost $1 billion toward subsidizing a new arena.”

A location for the new arena was not mentioned in the news release, but Hamon said she was told during a briefing Tuesday that the space currently occupied by Prairie Surf Studios near the Paycom Center would be the new site. The mayor's office, however, said other locations had not been ruled out.

Contributing: Steve Lackmeyer and Jana Hayes

This article originally appeared on Oklahoman: OKC NBA arena plan finalized, OKC Thunder to stay for next 25 years