Prairie Surf Studios (formerly Cox Center)

[Southsider2]

Does anyone know the basic terms of this lease? What is the city doing for them, what are they paying in rent?

Just got a chance to listen to the presentation. Not sure about the rent but basically it's a 5-year base term with three 1-year renewal options. PSM hopes at that point will be ready for a purpose-built facility. As far as the exterior it sounds like it's pretty much stuck as-is for now besides PSM adding their signage. Best of luck to them.

[shawnw]

https://oklahoman.com/article/567790...movie-business

Film production starting as soon as next month...

[Plutonic Panda]

Where is the money coming from to build the massive setup? Are there any cost figures?

[David]

That's an encouragingly quick start date. Any chance the city council knew that tenants were already lined up when they approved the lease this morning? I didn't see it reported in connection to that detail, but maybe it was covered in the meeting.

[shawnw]

From rent? The article I posted has the rent figures.

[Southsider2]

P Panda - Sounds like PSM is going to foot the bill for that therefore they're getting cheap rent in the first two years. Once they get the ball rolling the rent bumps consistently through the remainder of the lease.

[Plutonic Panda]

Oh okay cool yeah I was wanting to know the cost for building out the stage and production setup.

[Pete]

The first production is another by the same group doing Unbreakable Boy, staring the same lead actor and currently filming in OKC.

It's also a small faith-based film made largely for churches.

[Pete]

From that Oklahoman article:

The lease is for five years with three one-year extension options. It calls for stepped-up lease payments from Prairie Surf starting at $150,000 for the first and second years, $300,000 for the third year, $450,000 for the fourth year, $600,000 for the fifth year, and $825,000 plus all utility costs in excess of $1.1 million for each annual extension option.

So, about $12K per month for the first 2 years for the entire Cox Center.

[David]

Considering the mention of "all utility costs in excess of $1.1 million" for any extension past five years I have to wonder what the utility costs arrangement is for the first five.

[Pete]

Considering the mention of "all utility costs in excess of $1.1 million" for any extension past five years I have to wonder what the utility costs arrangement is for the first five.

That also means the city would be paying more in utility costs than they'd be receiving in rent.

[Southsider2]

I like that the city won't be paying for the buildout required for PSM to operate. My take is it's less risky for the city to give a lower introductory rental rate to offset the investment required than it would be for the city to pay for it and try to recoup the investment throughout the life of the lease. If PSM does flop in the next couple years then the city is just stuck with a building with little functional utility, which is already the case.

[Pete]

The Oklahoman has this completely wrong. They wrote:

The lease is for five years with three one-year extension options. It calls for stepped-up lease payments from Prairie Surf starting at $150,000 for the first and second years, $300,000 for the third year, $450,000 for the fourth year, $600,000 for the fifth year, and $825,000 plus all utility costs in excess of $1.1 million for each annual extension option.

They are confusing utility payments for rent.

This is the rent schedule directly from the lease agreement:

First Year Rent is $1.00
Second Year Rent is $75,000
Third Year Rent is $175,000
Fourth Year Rent is $225,000
Fifth Year Rent is $250,000
Option Year 6 Rent is $250,000 plus the CPI increase for the prior year up
to a maximum of 257,500
Option Year 7 Rent is Prior year amount plus the CPI for the prior year up
to a maximum of $265,225
Option Year 8 Rent is Prior year amount plus the CPI for the prior year up
to a maximum of $273,182

For utilities, the lease document says they run about $1.1 million per year and that PSM will be taking 75% of the Cox Center. This is what they'll pay in utilities:

Year 1: $150,000
Year 2: $150,000
Year 3: $300,000
Year 4: $450,000
Year 5: $600,000
Option Years
Year 6: $825,000 plus all utility costs in excess of $1,100,000
Year 7: $825,000 plus all utility costs in excess of $1,100,000
Year 8: $825,000 plus all utility costs in excess of $1,100,000

Their portion of utilities will be about $825,000 per year, but they will pay much less than that unless they go beyond 5 years.

So, this will be the cost to the city:




You can read the full lease agreement here:
HTTP://www.okctalk.com/images/pete/psmlease.pdf

[catch22]

Yikes.

[jedicurt]

now. you think about it though... the city will be getting money back in sales tax and hotel tax revenue... not that much over the next 4 years probably... but that will then offset the costs some.. plus if there is an influx of permanent crew, that could be even more. so i'm actually okay with that number.

[catch22]

now. you think about it though... the city will be getting money back in sales tax and hotel tax revenue... not that much over the next 4 years probably... but that will then offset the costs some.. plus if there is an influx of permanent crew, that could be even more. so i'm actually okay with that number.

I don't disagree with that logic, but the optics are bad. City departments will all likely be facing some huge budget cuts over the next several years as the economic repercussions are felt from the COVID pandemic. Is that the right time to be investing $2 million into a film business?

[shawnw]

We're already losing money on the thing sitting there doing nothing. We'll just be losing a bit less money over the next few years.

[Pete]

We're already losing money on the thing sitting there doing nothing. We'll just be losing a bit less money over the next few years.

They are having to move the Blue and other events elsewhere.

They still lease it out for all types of events.

[catcherinthewry]

The Oklahoman has this completely wrong.

Gasp!

[BoulderSooner]

They are having to move the Blue and other events elsewhere.

They still lease it out for all types of events.

the blue have a long term plan not involving the cox ... but not this quick ..



i do think the city is not allowed to book any event in the cox that could go in the new CC once it opens

[Plutonic Panda]

If this ends up a success and these people really do move out and build a major production studio in the city then it will be worth it. If they stick around a few years and burn out then yeah the city loses out. It’s a gamble and hopefully it pays off.

[jedicurt]

i do think the city is not allowed to book any event in the cox that could go in the new CC once it opens

i was curious outside of the Blue, how many events would be there once the CC Opens. that's why i think this is a smart move and the optics are right at the right time.. we have a CC opening soon and so lets start getting this building used, because it's better than empty.

$2 million is a drop in the bucket in this city. especially considering that number is over 4 years... that is a small amount of money for the positive spin and publicity it could give our city. heck, i don't think you could do a national campaign to make OKC look as good as a TV show or a few movies set here could for just 2 million

[Teo9969]

the blue have a long term plan not involving the cox ... but not this quick ..



i do think the city is not allowed to book any event in the cox that could go in the new CC once it opens

That's pretty key information for decision making. Given the likely sparsity in conventions for the next year guaranteed and more likely 2-3 years guaranteed, it seems the timing on this is really ideal.

[warreng88]

When it comes to the blue, I am not sure how long it will take, but remember we will have a new arena at the fairgrounds they could play in. Something to take into account.

[Pete]

the blue have a long term plan not involving the cox ... but not this quick ..



i do think the city is not allowed to book any event in the cox that could go in the new CC once it opens

The city is PAYING for the Blue to move out of the Cox Center to make way for this movie studio. Says so right in the lease:

The City, through the OCPPA, and PSM agreed to share the cost for relocating and/or
buying out booked events and those costs associated with relocating the OKC Blue basketball
team before the end of the team’s contracted term.