Sonics owner wants public to pay for upgrades to Oklahoma City's arena
OKLAHOMA CITY -- Seattle SuperSonics owner Clay Bennett believes public funding is the most logical way to pay for upgrades to Oklahoma City's downtown arena that are aimed at luring the NBA team to town.
While the improvements could benefit the SuperSonics if their relocation bid succeeds, Bennett said Thursday that the city stands to gain more from a renovated building. Bennett said a lease to use the city-owned building would likely leave the ownership group with "a significant, if not total, equity component that is nonperforming."
"So you can go through the steps that then suggest, well, perhaps this is an appropriate use of public investment because it is going to provide such dramatic public return," Bennett said at a sports business conference at Oklahoma City University.
"Unlike maybe a handful of individuals building the building that would never see any of it back, they might perhaps rationalize some benefit to the company, but the broad benefit really goes to the community, and not just intangibles."
Oklahoma City voters will decide March 4 whether to back a proposal to extend a penny sales tax and use about $121 million to upgrade the Ford Center and build an NBA practice facility. While no organized opposition to the plan has emerged, one City Council member encouraged lease negotiators to insist on the team paying for part of the project.
Bennett, who wants to move the SuperSonics to his hometown, said the method of paying for sports arenas is "a decision for each market to make."
"There would be an immediate tangible return through sales tax, certainly around downtown immediately. Then you've got players coming that are purchasing homes, buying vehicles, a staff of 150 or so jobs that's developed," said Bennett, who runs Oklahoma City-based Dorchester Capital. He added that the "real benefits" over time are the prospects of more businesses relocating because they're attracted to an NBA city.
Bennett, who sought public financing for an arena in suburban Seattle that would have cost more than $500 million, said the upgrades planned in Oklahoma City would be "exactly what we need for the foreseeable future."
In his presentation, Bennett characterized Oklahoma City -- which would be among the NBA's smallest markets -- as a favorable place to play if the team is able to maximize its revenue streams and if local government and businesses rally around the team.
"No. 1, we would be the only pro sports team in the state," Bennett said. "We have a city government and a city leadership that understands the value of improving the building to make it a national-caliber building, they understand the value of constructing a lease that gets us competitive, and a business community -- and I think our citizenry, by and large -- understand the need to support the team."
He talked about brokering a "favorable lease" that would allow the team to "participate in most all revenue streams that it generates and that would pay operating costs perhaps on the building." While Oklahoma City might not be able to ask as much for naming rights as larger cities, Bennett suggested that a local company might go the extra mile to help overcome that potential revenue shortfall.
Local Ford car dealerships currently own the naming rights under a 15-year deal, but Bennett said the arrangement allows for those terms to be reconsidered after a team arrives.
Bennett suggested "maybe a local company paying a premium for a naming rights deal over what their math would suggest on an Oklahoma City population equation because of the investment and the importance of getting this deal done and the payoff that will occur through time."
When Oklahoma City University President Tom McDaniel expressed an interest in housing the practice facility on campus, Bennett responded that the team would likely need the building to be dedicated to the Sonics year-round and that it appears the facility would not adjoin the Ford Center.
"We're fairly heading in that direction just because of the configuration itself of downtown. With the expansion, we will completely consume the contiguous site, so it couldn't be an absolute contiguous configuration anyway," Bennett said. "So we then thought, 'Well, we'll go offsite with it' because it is a fairly significant building.
"We could put one court downtown, but we couldn't put the relative amenities that we need and the other things that we need."
Copyright 2008 by The Associated Press