A California state appeals court has ruled what an arbitrator and a lower court already did: The Golden State Warriors owners still have to make $49 million in debt payments to Oakland and Alameda County to help pay off upgrade costs on their old arena as required by their lease, even after moving to San Francisco.
This should seem unsurprising — “as required by their lease” is normally kind of a tipoff — but the Warriors owners had been employing an interesting legal strategy that just because they agreed to make the payments in their lease, that shouldn’t apply once the lease expires. As we covered back in 2018 when the arbitrator first ruled on this:
The dispute, if you’re interested, was over this language in the Warriors’ 1996 lease:
“if the licensee terminates this … agreement for any reason prior to June 30, 2027, and there is a principal balance remaining on the project debt … then licensee shall pay an amount equal to the excess of scheduled debt service.”
Sounds pretty cut and dried, no? Except that the lease expired in 2016, even though it was later extended through 2019, so the Warriors owners argued that it no longer applied even if the lease clause said “2027,” and — know what, they lost, so we don’t have to think about this anymore.
Okay, clearly I was wrong about the “don’t have to think about this anymore” part, because when it comes to lawyering up, where there are appeals courts, there’s hope. It sounds like the team is finally going to pay up this time — a Warriors spokesperson told the San Jose Mercury-News that “we’re obviously disappointed with the court of appeals decision but, as we’ve always said, we will fulfill our debt obligation” — so maybe now we can never speak of this again. And maybe future arena lease negotiators will make sure that when a team says it’ll help pay off construction debt, they include a “no backsies” clause.