Warriors’ arena to include $10m/year traffic fund, but read the fine print

The battle the last few months over the Golden State Warriors‘ proposed new arena on the San Francisco waterfront has been especially dull — basically, a bunch of rich donors to UC-Francisco opposed the plan because they were worried it would create too much traffic around the university’s hospital. This seemed like the sort of thing that was going to be easily compromised over when it first emerged in April, and sure enough, a settlement with UCSF (though not necessarily the donors) was announced yesterday. But it’s the details of the settlement that should be raising eyebrows:

At least $10 million in revenues from the 18,050-seat arena annually would be used to fund traffic mitigations for the life of the arena, pending approval from San Francisco’s Board of Supervisors.

Wait, $10 million a year? That is a huge amount of money, the equivalent of maybe $150 million in present value, which even on a billion-dollar project is a significant chunk of change. If Warriors owners Joe Lacob and Peter Guber really agreed to pay that much to ease traffic concerns, that would be unprecedented.

It’s not entirely clear, though, whether this is actually Lacob and Guber’s money: Mayor Ed Lee’s press release just said the traffic funds would “come from new revenues generated by the Warriors sports and entertainment center,” which could easily mean city tax money, not team checks. Neither Lee’s website nor the city’s database of legislation has the text of the bill that Lee introduced on Tuesday, and it’s 6 am on the West Coast right now, so your guess is as good as mine what this actually means.

Not that it makes much of a difference in terms of the project’s financing overall, which is still extremely city-friendly: Lacob and Guber are paying for the full construction cost, plus the cost of acquiring the land, plus property taxes on the whole megillah. If anything, it’s set to be a model of how much team owners can afford to cough up for a new building when public funding is off the table — though admittedly, San Francisco is a bit of a special case since it’s a city full of rich people who currently have no full-sized arena to go and drop $300 a pop on Eagles tickets at. Still, it’ll be interesting if someday soon the bayfront features two sports facilities built with effectively no public money — it’ll be like visiting England, only with better seafood.


8 comments on “Warriors’ arena to include $10m/year traffic fund, but read the fine print

  1. There is also a litmus test for the arena development coming up on the November ballot. Prop D has to do with the Giants’ Mission Rock development on the parking lots just south of the stadium (more specifically with increasing the height of said development beyond the normal limits for the area). The development/Prop seems to have pretty solid popular support. And if (more likely when) Prop D passes, it will be helpful the the Warriors’ development (which is within existing height limits).

    http://www.sfchronicle.com/bayarea/nevius/article/Mission-Rock-win-would-be-a-blow-to-foes-of-6557171.php

  2. The MLB schedule usually comes out in December so I always thought it would be a good idea to just make a deal that says you can’t schedule arena events on Giant game days but if they’re willing to let them do 12 dates that overlap then I guess we’ll have a trial run of sorts. If I’m the UCSF people, I would push for a clause that allows them to renegotiate the 12 day deal after 5 years or something. If traffic is a nightmare when events overlap, then they would justifiably have reason to eliminate arena events altogether on Giant game days. With the baseball schedule coming out in December, that gives arena management 4 months to book events in accordance with the MLB schedule.

  3. As some have pointed out, this might be a giant fudge.

    It is indeed not quite clear if this is new money or just earmarking sales tax money.

    At the same time, there are a ton of transportation changes happening down around Mission Bay and north into SoMa. The Mission Rock development is a big short-term one. To support Mission Rock and other developments, MUNI needs to up capacity on the T. Once the Central Subway is completed, the T will be a very different line, no longer running with the K by terminating in Chinatown anyways and it’s already forecasted to eventually become MUNI’s busiest line.

    Furthermore, the Mayor has been a big champion of running CalTrain and eventually California High Speed Rail to the (now under construction) Salesforce Tower. To make room for new tracks he’s proposed tearing down 280 North of 16th St, building a Boulevard (similar to Octavia Blvd), relocating the CalTrain rail yard and using the land the freeway would clear for new apartments/condos, which would then produce their own property taxes but need services (including transport).

    In short, tons on inflows and outflows in that part of town. My take would be UCSF just got a dedicated funding source for transport improvements, the Mayor got a slush fund for his plan for the area, and the Warriors got rid of the last credible opposition, though it’s not clear if that cost them anything.

    The reality is most of these things were going to happen anyways. At best it’s a win for SF taxpayers, at worst kind of a wash (unless you don’t like the Mayor’s Mission Bay plans, but that’s politics unrelated to the arena).

  4. If the quote was “At least $10 million annually in revenues from the 18,050-seat arena…”, that would clearly be $10 million per year.

    But the quote is “At least $10 million in revenues from the 18,050-seat arena annually…”, which applies the term annually to the number of seats in the arena. It can easily be interpreted as $10 million in total but the arena will continue to have a capacity of 18,050 each year.

  5. The actual quote from the mayor’s press release (linked above) is:

    “The new Mission Bay Transportation Improvement Fund will ensure that at least another $10 million will be available annually to spend on traffic mitigations, for the life of the arena.”

    But maybe you’d suggest this means $10 million lump sum that’s *available* annually, until the $10 million is gone? Language has no meaning anymore, so sure, could be.

  6. Man, it sure doesn’t look like an “in lieu of”-arrangement to me.

    IF I’m right, two things will happen:

    1) Hell will have frozen over, given my track-record; and
    2) This is basically the best arena deal I’ve ever seen.

    If this is not some sort of PILOT, this is a great deal. And in San Francisco, EASY 200 nights/year. No problem.

    I’m trying to come with objections. I got nothing. And this is from a guy who is convinced the Sacramento deal has about 8 opportunities to crater.

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