Commentary: Streuli: Just a real estate deal

Journal Record, The (Oklahoma City), Feb 18, 2008 by Ted Streuli

The upcoming sales tax election that would raise $120 million to upgrade the Ford Center and build a practice facility is a much, much simpler proposition than the rhetoric flying from each side would have us believe. Sports franchises and taxes can stir emotions faster than an unsigned Valentine card in a sixth-grade classroom. But it's really a pretty straightforward business decision.

The Sonics are an NBA franchise owned by some local businessmen. As the franchisor, the NBA has some rules about where a franchisee can park his business. It doesn't matter how badly a franchisee wants to put his McDonald's in a given neighborhood; if the demographics don't support the business model, McDonald's isn't going to let him do it. The NBA isn't much different in that regard and it doesn't matter what the owners' personal net worth might be.

The hoopla here is really about a word: investment. We should invest in the Ford Center. We should invest in our community. This is an investment that will drive economic development.

If you believe this is an investment, please contact me regarding a beachfront condo development I have going in Guymon.

Remodeling the Ford Center is an expense, not an investment. When you make an investment you expect the asset to appreciate. Your stock portfolio is an investment. Your car is an expense. It's a justifiable expense because you need it - and you get value from its use - but it's certain to depreciate.

The Ford Center, ultimately, is going the way of your car. It's not as though some smaller city is going to come along in 2020 and say, "Hey! We need an arena in Lawton. How much you want for it?" No, in 2020 we'll probably raze it and build a new one.

The Ford Center is a publicly owned building, which means you and I are the landlords. Like any landlords, we want good tenants. The nicer we make our facility, the better tenants we can attract, the more of them we'll get, and the longer they'll stay. That applies whether we own a house, an office building or an arena.

Right now we have a potential tenant in the NBA, which is shopping for a home for one of its franchises. They want us, the landlords, to make some improvements to the house before they sign a lease and move in.

Like any landlord, we can choose to make the improvements or we can decline. And like any tenant, the NBA can choose to sign a lease or to look for a house that better suits them - the brand-new, $276 million 18,000-seat Sprint Center in Kansas City, for example.

That's all we're voting on: Do we, the landlords, want to incur this expense so we can attract that tenant?

Assume it will not drive economic development. Assume we'll be tearing it down in 2020. Am I still willing to pay a 1-cent sales tax for 15 months to bring a major league franchise to my city? Even if it's just for the intangible benefits I believe come with it?

Yes, I am.