SF Warriors arena project costlier, more risky than AT&T Park

The San Francisco Chronicle investigated the proposed Warriors arena dealin San Francisco over the weekend — or rather, asked sports economists Roger Noll and Andrew Zimbalist to investigate it — and found that, in Noll’s words, “the proposal really is more like the deal with the Giants than like other arena deals, including Oakland and San Jose, but the big difference is that the Warriors’ deal includes more stuff.” Because Warriors owners Joe Lacob and Peter Guber want to build a 630-car parking garage, retail, condos, and a hotel in addition to a hotel, the project would require more than 15 acres of city-owned property, and cost at least $1 billion, as against the $358 million the Giants spent on Pac Bell/SBC/AT&T Park.

This creates some problems from the city’s perspective, including the fact that Lacob and Guber want $120 million in renovations to the pier that their new arena would sit on, double the parcel’s entire value. The Warriors would pay rent on the site, but would also get property tax rebates that the team would use to help repay the city’s costs.

Because of all the additional develoment, this project is starts to look less like the Giants’ stadium deal than like Brooklyn Nets part-owner Bruce Ratner’s Atlantic Yards project, which similarly had so many moving parts that it became extremely hard to figure out precisely who was getting subsidized how much for what. Which isn’t necessarily a bad thing — as Noll also notes, while the city’s risk is greater because of the larger scope of the project, so is its potential benefit — but it does mean that this is going to require far more scrutiny than just “it worked for the Giants, it’ll work for the Warriors.”

One comment on “SF Warriors arena project costlier, more risky than AT&T Park

  1. After reading that article, it seems like it’s an even better deal than I thought. Yes, the City is contributing $120M to restore those piers, but it’s going to cost them $40M to take them out, if they take that option. On top of that, the additional $80M gets them a 66 year lease. I mean, wow, who wouldn’t do that?

    I usually think on-line petitions are bogus, and even when I agree with causes, I never sign them. But in this case, 214 signatures when the goal is 5,000 is very telling. This is San Francisco; they could have had those signatures in 2 days, if the public really opposed this. But, guess what: They don’t.

    Note the funny math around AT&T Park; you cannot compare 2000 dollars with 2012 dollars. That’s a real oversight in that article.

    All in all, that article strikes me as a pretty good argument in favor of that arena at that location.