Warriors kick off campaign for $500m San Francisco arena

The official announcement is in for the Golden State Warriors‘ arena plan for San Francisco, and we have some more details — a few, anyway — on what it will cost and who it will be paid for:

  • Construction will cost $500 million, including $100 million to shore up Piers 30-32 to be able to support an arena.
  • The Warriors will get a long-term lease on the city property. The San Francisco Chronicle says “the model for the deal is the 1996 agreement between the city and the Giants“; in that case, the city gave the Giants waterfront property for free while the team paid for all construction costs and pays property taxes.
  • The team also, according to the Chronicle, “hopes to recoup the [construction] money eventually in the form of rent credits from the port or other givebacks,” as well as from arena revenues. This implies further public subsidies, but with no other details forthcoming, it’s hard to say exactly what.

All this would put the public share of the arena cost at somewhere between reasonable (the public ended up putting up about 10% of the Giants’ stadium cost, via land subsidies) and, well, we don’t know, pending what those “givebacks” might be. As discussed yesterday, an arena operating year-round in the heart of San Francisco is one of the few locations that could conceivably generate enough profit to pay for this kind of hefty private price tag — plus, let’s not forget, the $70 million the Warriors would still owe to Oakland on their old lease — but “conceivably” is the key word here.

In any event, this is only the very, very beginning of a planning and political approval process that’s expected to take at least two years, with the arena itself not opening until 2017. Oakland city officials have already said they’ll issue a counterproposal (though they have no details yet), and the Warriors still have the San Francisco Plan B of building on land controlled by the Giants to consider. At the very least, this being San Francisco, we have years of exciting environmental impact statements and board of supervisors hearings to look forward to — somewhere in there, we should be able to find out exactly who’d be paying for what.


10 comments on “Warriors kick off campaign for $500m San Francisco arena

  1. What is the current lease with Oakland? Everything I’ve read makes it sound like it expires after the 2016-2017 season, allowing the team to walk away after that. Where does the $70 million figure come from?

  2. “Currently there’s about $95 million of debt outstanding at the Oakland/Oracle Arena. With each lease year completed $5 million comes off, leaving a shortfall of $70 million for the W’s to pay off if they leave at the end of the 2016-17 season.”

    newballpark.org/2012/05/21/sf-warriors-set-to-announce-arena-deal/

    “Deena McClain, executive director of the Oakland-Alameda County Coliseum Authority, which controls the arena, said that after the 2017 lease, the contract includes language for two five-year extensions running through 2027. During that period, any owner moving the team would be on the hook annually to pay any debt service remaining on the bonds used to fund the renovations the arena could not cover.”

    basketball.ballparks.com/NBA/GoldenStateWarriors/index.htm

  3. It sounds like a TIF to me, but arenas in California don’t produce much sales tax revenue. On the face of it, without that much information yet, I like it. Had Sacramento’s deal been about like SF’s deal, I would have supported it.

    Early buy in from ownership is essential. That is the lesson KJ must take from this. If the owners are not committed, walk away.

    My early prediction is that this arena will get done, on time.

  4. The City of San Francisco will get this done. I suspect the owners of the Warriors knew exactly what they were doing when they made their bid. If Santa Clara can get a crazy loan for their football stadium, I highly doubt the big money players in San Francisco will have a hard time getting the financing in place to build this arena.

    Who knows what kind of naming-rights agreement they’ll get as well. The NBA and Stern really need to strong-arm the Maloof Family into selling the Kings to get the Kings to stay in Sacramento. They had the framework of a deal ready to be signed and that would be really silly if Sacramento left a good market like that.

    I also think the City of Oakland is really dumb for trying to keep all these teams when they don’t want to be there. The only team that would want to stay is the Oakland Raiders but does the city really want to build them a billion dollar stadium?

    I personally let the Warriors move to San Francisco, let the Athletics move to San Jose and let the Raiders move to Santa Clara or Los Angeles. After that they can get rid of those terrible facilities and if they’re still stuck on sports then why not try to recruit an Major League Soccer team and build a soccer-specific stadium with an LA Live type district.

    You can also build it with a soccer academy for children/teenagers since the BART access would be perfect for a site like that plus it would be much cheaper then trying to build a new basketball arena, baseball park and football stadium.

    I think a Bay Area City Soccer Club would be a nice addition for MLS and would give San Jose a natural rival for derbies. That’s if Oakland would still want to be in the sports game. I think they should just get rid Oracle Arena & O.co Coliseum allow the highest bidder to get a hold of the land allowing developers to put it to good use. That’s prime real estate.

  5. Darren:

    Regardless of where the Kings play, the NBA needs to get rid of the Maloofs. They are an embarrassment to the league.

    I agree that Oakland probably can’t support the two remaining franchises they’ll have… but which do they try to keep?

    Wolff has essentially refused to deal with Oakland no matter what they offer him which suggests it might be time to up his rent at the coliseum… if he isn’t staying there’s no reason at all to continue to rent to him once the current lease is up), whereas the Raiders seem to want to stay in the city with which they are most identified… but only if it’s really profitable for them to do so.

    Does Oakland take that $70m and try to find a way to entice the Raiders to stay at the present (likely heavily rebuilt) site using additional tax money? It would mean eating the bond payments on the arena, but it might be a wise move (assuming the coliseum can be heavily redeveloped for $250m or so, which is likely on the low side even for a Mt Davis duplication).

    Or, as you say, they could forget about the sports facilities and sell the real estate for a tidy sum… just not yet, in the case of the baseball stadium.

    As for MLS… well, Oakland is already in somebody’s territory… and I bet you can guess who, right?

  6. @ Darren…The Oakland Raiders will be playing football in the City of San Francisco, bet on it. Even former Mayor Willie Brown has mentioned this fact. The new stadium at Hunters Point will have a retractable roof, and will be built on the order, & design of Jerry Jones stadium in Texas. The stadium at HP will be the 1st west of the Mississippi that will be on the NFL’s regular rotation for Super Bowls.

    Therefore making the Stadium at HP a muti-purpose venue. The Stadium at HP will on rotation for Super Bowl regularly (as said b4), will hold events such as NCAA’s March Madness, Democratic/Republican Conventions, Concerts, Auto Show, Oracle & Apple Shows…and many more events.

    The Yorks thought on a small scale, and their undersized venue will become nil & void when the stadium at HP is built. And of course, as with any Sports Venue in SF, the stadium will be “privately finance.”

  7. Not a bad dea for the cityl. A San Fran arena will kill it. The whole Mission Bay area has a nice setup

  8. The public response to these arena plans will be very interesting. S.F. residents, after all, were able to prevent the federal government from building freeways in their city so many years ago. There are some residents on the Embarcadero who will be none too pleased about losing their fantastic view of the Bay because of an arena. (And I checked it out on Google Street View; man, what a view!) But, overall, I think it’d be great for the city.

    I listened to some of the press conference yesterday, and the overused phrase of the day was “state-of-the-art”. A facility is only state-of-the-art until a newer and better facility is built somewhere else. Forget state-of-the-art, what they should strive for is “iconic”. Dodger Stadium is 50 years old, but no one cares because it’s iconic (and well-maintained). They need to have the mindset of replicating the Sydney Opera House on Pier 30. Let’s hope they have the guts to do it.

  9. The public response to these arena plans will be very interesting. S.F. residents, after all, were able to prevent the federal government from building freeways in their city so many years ago. There are some residents on the Embarcadero who will be none too pleased about losing their fantastic view of the Bay because of an arena. (And I checked it out on Google Street View; man, what a view!) But, overall, I think it’d be great for the city.

    I listened to some of the press conference yesterday, and the overused phrase of the day was “state-of-the-art”. A facility is only state-of-the-art until a newer and better facility is built somewhere else. Forget state-of-the-art, what they should strive for is “iconic”. Dodger Stadium is 50 years old, but no one cares because it’s iconic (and well-maintained). They need to have the mindset of replicating the Sydney Opera House on Pier 30. Let’s hope they have the guts to do it.

  10. Justin:

    “state of the art” clauses are as stupid as “must be the highest paid player” clauses in player contracts.

    If cities are dumb enough to agree to such things (hello St. Louis/Cincinatti…), they deserve to be punished. The only sad part is that the city’s poorest residents tend to be punished as a result.

    It’s what billionaires (particularly sporting billionaires) do… offload their expenses onto those who earn so little they can’t afford tickets.

    At some point in future, people will look back on this period of staggering stupidity the same way we look back on the great railroad swindles of the late 19th century.

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