The city of San Francisco issued a fiscal feasability report on its proposed Golden State Warriors arena last night, and as I predicted yesterday, it’s going to involve a TIF:
The entire construction cost for the arena and the adjacent parcel would run between $875 million and $975 million, according to the report. Of those costs, an estimated $120 million would be needed for the repair and stabilization of the piers, which date back to the early 1900s.
The deal calls for the team to receive a 66-year lease on the piers and pay for their renovation upfront, but then be reimbursed. To do so, The City would likely issue a bond that would be repaid through future property taxes from the development and not from The City’s general fund, according to Jennifer Matz of the San Francisco Office of Economic and Workforce Development.
The amount of property taxes kicked back would be limited to the $120 million needed to prepare the piers for development, and the city claims it will make its money back on increased tax revenue from the arena and retail, hotel, and residential buildings that would be built nearby. (The city could also be asked to kick in about $30 million from the sale of land across the street from the piers.) All of which may well be true, but it’s still not exactly the all-private money that had been promised earlier.
Meanwhile, local residents who attended last night’s community advisory committee meeting were less than thrilled with the project, with one calling it “a nightmare.” If the Warriors were expecting smooth sailing … well, given that it’s San Francisco they would have been foolish to do so, but it sure looks like this project has a long way to go before anyone can start printing up “S.F. Warriors” jerseys.
I’m confused that people would move to downtown San Francisco, then complain about the noise and traffic. I’m sorry, but I just don’t get that.
They probably complain about the Chinese food, too.
If the Warriors limit the public share to just the $120M repair of the piers, I think they can this done pretty easily. For reference, Larry Ellison attempted to get a deal done on the same pier (30/32 is actually one parcel) for the America’s Cup. His deal collapsed under scrutiny of subsidy demands beyond the repair of the pier infrastructure.
Also of note, some city supervisors were against the Ellison plan because the development on 30/32 obstructed the views and access to the public park being constructed on an adjacent pier. It will be interesting to see if those same supes voice those same concerns when this plan makes it way to chamber.
Tommy, I agree. Given that the structure is very similar to the deal that built AT&T Park, it seems very likely this will succeed in the end. As for the NIMBY’s talking about it being a “nightmare” they’ll soon be shouted down, as they should, by the majority. If they really had concerns about traffic, etc… they would not have bought property on the Embarcadero 2 blocks from AT&T Park.
Just a general comment – why do some people think it’s so cool to put indoor stadiums along a scenic waterfront? Baseball stadiums, I get. Condos with a view, commercial real estate outdoor shopping/restaurant areas… makes total sense. Even a football stadium makes a shred of sense, albeit only for 8-10 days a year. But a basketball/hockey arena? Why????
Greg,
All I can muster is that these stadia don’t generate socio-economic impacts as much as follow the success already being seen. Areas like you describe are areas that many would like to entertained in.
Seizing on this someone wants an arena there before its impossible to cash in on this opportunity.
That’s my hunch.
Like the 49ers new stadium this will be built. The hotel and ancillary development are not necessary therefore the 875M number is not accurate.
The Warriors own the wealthiest market in the US to themselves. Once the Sacramento Kings relocate out of Nor Cal the Warriors will then re-do their TV deal to extend to all of Nor Cal and Nevada. Right now it is Bay Area only. That extra money will be more than enough to get not only the arena built but the ancillary development as well.
Hence why Stern wants the Kings gone. He wants new arenas in Seattle and San Francisco and for these two teams two become financial powerhouses on the West Coast.
In reality the Kings if they were smart should move to San Jose and doa shared TV deal with the Warriors for all of Nor Cal and Nevada. But the NBA will not let them because of this new arena project the Warriors are undertaking. In classic David Stern style he wants the big market Warriors to get richer and force the beleaguered Maloofs to sell to Hansen in Seattle and move away from small market Sacramento.
David Stern besides Bud Selig is the worst commissioner in all of sports. He favors big markets and lets small market teams suffer. This is just another example of it.
If they’re about to get a TV windfall regardless, why would they blow it on arena construction costs? Either the project makes money, or it doesn’t. Coming up with capital is almost never a problem for sports team owners.