Arena quest

Mayor Bill LaFortune and the committee overseeing the construction of Tulsa's new downtown sports arena are starting Monday on a seven-city tour to gather ideas for our new arena. (Whirled story here, jump page here.)

It's interesting that most of the arenas the committee will visit are smaller, and all of them are more expensive:

So the three arenas that are closest in size to what Tulsans were promised cost far more than has been allocated for Tulsa's arena, and the most recent arena costs twice what we were told to expect to spend on ours. Remember that the $183 million has to be divided between arena construction and renovation and expansion of the convention center -- the money allocated for just building the arena is closer to $125million.

The project director for Tulsa Vision Builders, Bart Boatright, has a solution for making up the difference:

The budget could be significantly expanded by private funding through the sale of arena suites, advertising and naming rights, Boatright said.

The story goes on to say that OKC's Ford Center naming rights went for $8.1 million for a 15-year deal. That won't quite cover the gap.

The problem with using the sale of luxury suites to offset construction costs is that those dollars have already been assigned to cover operating costs. The feasibility study done before the vote (see my analysis here) assumed the annual rental of 20 luxury suites and 2000 club seats at annual fees of $32,500 and $1,100 per year, respectively, as a major source of operating revenue. If these very optimistic assumptions were met, the study projects an annual surplus. But if they only manage to sell five suites and 500 club seats, the arena will lose nearly $1 million a year. If premium seat fees are assigned to construction costs instead of operating costs, the facility is projected to lose $1.6 million a year.

Another interesting thing -- Mayor LaFortune is quoted as saying he hasn't spent much time in arenas: "I've only been in two arenas in my life, so I really want to be there to get a feel for everything." (Tulsa has five arenas -- downtown, the Pavilion, the Reynolds Center, the Mabee Center, and UMAC. Which three hasn't he been in yet?) What that tells you is that attending spectator sports and major concerts isn't part of his life, although he enjoys playing basketball and going to smaller performances at the Oklahoma Jazz Hall of Fame. I wonder how many people promoted this arena and voted for this arena thinking, "I'm rarely or never going to go there, but lots of other people will use it"? What if it turns out that the vast majority of Tulsans aren't interested in arena events?