Norman Taxpayers would shoulder most of Arena Project costs

 

As details of the proposed arena in northwest Norman roll out, the one thing that is clear is that the cost-split of the arena project lays the bulk of the costs on Norman Taxpayers.  

The project plan sets out how much tax revenues would be obligated for the arena project which includes the arena, parking structure and district infrastructure. The project plan would create a contractual obligation for the City of Norman.  

The overall financing plan is sketchy and evolving.  At a recent meeting, OU Foundation/developers claimed the cost of the arena project would be $330,000,000 (https://nondoc.com/2024/06/05/what-progress-looks-like-ou-president-promotes-tif-for-new-norman-arena-entertainment-district/)

The project plan covers $230,000,000 for the arena + parking + district infrastructure and up to $370,000,000 for the financing costs.  The extra $100,000,000 is not mentioned.   (https://mccmeetingspublic.blob.core.usgovcloudapi.net/normanok-meet-eaebc81b6d61454bbc1bc633acde53f2/ITEM-Attachment-001-da77d9383b714c2d9a392d770de125fc.pdf)

Would OU would pitch in $25,000,000 upfront and commit to paying $75,000,000 over the next 25 years? Would these payments be in the form of venue rental?  The Hunden Partners report (page 80) speculates that OU would pay $500,000 in rental payments in year 2029 with 3% increases over the following 25 years.  Perhaps the hope is that leverage act funds could be used to cover the gap?

 The chart below shows the arena cost split between City of Norman taxpayers and other parties. Taking $700,000,000 ($600,000,000 + $100,000,000 from unspecified origin) as the total arena project costs leaves the taxpayers shouldering 86% of the costs. In fact, if state funds from the leverage act are used to cover the $100,000,000 then ALL of the arena project construction and financing costs would be publicly funded. 

The project plan does not detail who would own the arena.  Early conversations speculated that a city-county authority might be created to own and operate the arena.  At the recent meeting, OU representatives suggested that a private party might own and operate the arena. 

Thus, taxpayers are being asked to commit a large amount of public funds for an asset that may or may not be publicly owned and that OU may or may not contribute to the financing.