Oklahoma City and the Thunder have put a development agreement in place to build a new $950M arena for the team after city council approved their proposal by a 7-2 vote during a Tuesday morning meeting. The deal allows the two sides to move forward on the arena project, including negotiating a lease and other important contracts like construction and design. During Tuesday morning’s city council meeting, Oklahoma City manager Craig Freeman said the arena project will complete no later than the summer of 2029, but they are targeting the summer of 2028 for completion.
The city will own and maintain the new arena, which it will build on the former site of the Cox Convention Center across Reno Ave. from the Thunder’s current downtown home, Paycom Center. The agreement allows the team to negotiate and purchase a development ground lease for any property in the overall site that exceeds the arena, a parking deck and a potential transportation hub. The city will direct any revenue it receives from the Thunder for a development ground lease of that property back into a capital improvement fund to maintain the arena long-term.
The development agreement does not allow the venue project cost to exceed $950M; the city and the team must value engineer any potential overages to bring the project back under the budget. The Thunder will cover any requests they make that do not allow value engineering into the project and cause cost overruns. If the project comes in under budget, any excess funds will go into the long-term capital improvement fund.
The city and PBC Sports and Entertainment LLC — the owners of the Thunder and the Oklahoma City Blue teams — modeled the development agreement after an original 2008 development agreement, which they used to make improvements to the current Paycom Center arena where the Thunder team plays its home games.
“Some changes that are there are just refreshing the document, but moving forward with the partnership that we’ve had before, the long partnership that we’ve had with the team,” City Manager Craig Freeman said. “This does include approvals for the team similar to 2008 on the selection of the A&E (architectural and engineering) firm, the construction manager, the designs for the arena, but also on an owner’s representative.”
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What we know about City, Thunder’s $950M New Arena Agreement
The new agreement aligns with a letter of intent that a city council majority approved in September 2023. It lays out various details on how the city will fund the upcoming arena, where it will locate the arena, and when it should open the arena.
Per the new agreement, the city will first use $78 million it reallocated from MAPS 4 that it originally intended to spend on improving Paycom Center. Then, the city will spend $50 million that the Thunder ownership contributed, before using a minimum of $772 million it expects to finance through the sales tax beginning on April 1, 2028.
“If we can’t get part of the project value-engineered within the budget, (Thunder owners) do have the ability to finance that part of the project, to be able to keep it moving forward,” Freeman said. “And then, after plans are completed, if the team makes any request at improvements that are over the project budget, the team agrees, if we can’t value engineer those into the project budget, that they would pay for those parts of the project.”
The city expects the Thunder’s new arena to be at least 750,000 square feet. The agreement also includes a new parking garage onsite with at least 650 spaces. Additionally, the city is reserving about 1.4 acres of the new arena site for a potential intercity transit hub in the future.
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