It’s been rumored for a while now that the Golden State Warriors owners Joe Lacob and Peter Guber were looking for a Plan B now that his proposed Piers 30-32 arena site was running into stiff opposition, but that still didn’t make yesterday’s news any less of a bombshell: The team owners have bought 12 acres of land in Mission Bay, south of the Giants‘ AT&T Park, and plans to build a new arena there by the 2018-19 season. And Lacob and Guber say the project will be entirely privately financed, including the price paid for the land.
This makes a lot of sense on many levels: The main opposition to the old waterfront site was from locals concerned about the arena and its accompanying condo towers blocking views of the bay, less of an issue in Mission Bay, which (for the moment, anyway) is mostly occupied by a hospital, office space, and old industrial sites. There’s a new Muni Metro underground streetcar line set to lead to Mission Bay by 2019. And by ditching the old site, the Warriors owners will avoid paying an estimated $200 million on shoring up the piers there.
Still, with the condo development now off the table — the 12-acre site will be barely enough for an arena — Lacob and Guber are now looking at building a roughly $1 billion arena entirely on their own dime, something remarkable enough that the San Francisco Chronicle felt it necessary to note it as “a rare instance of a modern sports venue that would use no taxpayer funds or public land.” The Warriors organization didn’t reveal how much it paid for the new site, but given it’s part of a 14-acre site that the land’s previous owners paid $250 million for four years ago, you have to figure the NBA team paid something close to that. So we’re talking $1.2 billion that needs to be repaid entirely from profits on running an arena — meaning the building will need to run something like $100 million a year in the black just for Lacob and Guber to break even.
That seems crazy, given that most arenas have trouble turning an operating profit at all. San Francisco, though, is a special market: Not only is it chock-full of wealthy people who can buy top-priced tickets (and whose eyeballs advertisers will pay a pretty penny for), but it’s the only major city in the nation that I can think of that lacks anything like a modern sports and concert arena: The Cow Palace is undersized and across the city line in Daly City, leaving Oakland’s Oracle Arena as the only real option for touring acts requiring a 20,000-seat indoor space. This means a Mission Bay arena stands a good chance of being full for the 200+ days a year needed to run a successful business — and also may avoid the fate of Brooklyn’s Barclays Center, which thanks to the presence of Madison Square Garden across town has had to offer cut-rate deals to artists to woo them away from Manhattan. And, of course, the Warriors stand to appreciate in value significantly from a move across the bay to a more fashionable address.
It still sounds like an awfully risky gamble to me, but fortunately it’s not my money at stake. And — at least if the Warriors owners live up to their promises, which isn’t always the case — it won’t be San Francisco residents’ money either, since a privately owned arena on privately owned land should even pay its fair share of property taxes. There are a lot of details still to be divulged — actually, pretty much all the details are still to be divulged — but so far, knock wood, this may actually be the rare case of a new sports facility that’s a win-win for both the team owners and the city. Maybe San Francisco’s penchant for voting down development projects that it doesn’t like isn’t such a bad thing after all.