Lease deal inked for Oklahoma City bond-financed arena

A deal that will keep the National Basketball League's Thunder playing at a yet-to-be-built, bond-financed arena through at least 2053 won approval on Tuesday from the Oklahoma City Council.

Mayor David Holt said the 115-page arena use license agreement he signed "confirms in writing that the team will play in the new arena for at least 25 years."

"Further, the agreement includes penalties if the team leaves early, with penalties over $1 billion in the early years," he said in a Facebook post.

The 750,000-square-foot arena, which will replace the 586,000-square-foot Paycom Center, is targeted for completion in June 2028, with the team's 25-year commitment commencing when the facility opens.

The arena's operation and maintenance will be the city's responsibility, while the team will control its naming rights.

An estimated $787 million, mostly tax-exempt sales tax revenue bond sale by the Oklahoma City Public Property Authority is being prepped to help finance an arena with a minimum price tag of $900 million.

A late November, early December bond pricing by lead underwriter Goldman Sachs (GS) is being eyed, according to Brent Bryant, Oklahoma City's chief financial officer.

The bonds will be backed by a six-year extension of a Metropolitan Area Projects (MAPS 4) one-cent sales tax beyond its April 1, 2028, expiration that Oklahoma City voters overwhelmingly approved in December 2023 for the arena. The city has projected the tax will raise nearly $976.3 million during the six-year period, based on annual growth of 1.79%.

Oklahoma City will also contribute $78 million in MAPS 4 funds that had been allocated to the city-owned Paycom Center, while the Thunder, which has played there since 2008, is putting in $50 million.

Some infrastructure related to the project, including streetscape enhancements and a parking garage, would be financed as part of a proposed $2.7 billion general obligation bond program introduced at Tuesday's council meeting.

A council vote on placing 11 bond propositions for streets, parks, drainage, libraries, mass transit, as well as for public safety and city facilities on the Oct. 14 ballot is scheduled for July 15.

The city's previous GO bond program in 2017 totaled $967 million.