On the same day that developer Chris Hansen identified a business advisory panel for his proposed SoDo arena, the Golden State Warriors announced plans to move from Oakland to San Francisco by the 2017-18 season into a waterfront arena different from Hansen’s Seattle’s vision in two noteworthy respects — the $500 million arena will be completely privately financed and has no plans to accommodate an NHL team.
Hansen’s $490 million proposal includes up to $200 million in participation by the city and King County via general obligation bonds, essentially a loan to be paid for from taxes generated by the building’s operations.
In San Francisco, Warriors owners Joe Lacob and Peter Guber, who paid an NBA-record $450 million to buy the team 18 months ago, said at a press conference attended by Commissioner David Stern that they “have the money in the bag,” requiring no public contribution. “The financing is done,” said Lacob.
Total private funding was how the owners of the San Francisco Giants built their baseball park, after four rejections at the ballot box on proposals that would have included public money. AT&T Park opened in 2000 at a cost of $357 milllion — the first privately financed stadium in MLB since Dodger Stadium in 1962 — although it received a $10 million tax abatement from the city and $80 million for infrastructure improvements.
Spokesman Peter McCollum said Hansen hadn’t studied the San Francisco proposal, but noted that it is a “less ambitious” building in a bigger marketplace.
Lacob and Guber also have a big advantage: they already own a team. The lease at Oracle Arena in Oakland is up after the 2016-17 season and the franchise will be free to move across the bay. But the site they chose, two decrepit piers on the Embarcadero waterfront about a mile north of AT&T Park, will require an estimated $75 million to $100 million in improvements, not to mention negotiations with the city and various agencies that have a say in the project.
A formal plan has yet to be submitted, but the project has been under discussion with San Francisco officials for six months. The land is currently a parking lot in the shadow of the Bay Bridge. The Warriors’ owners declined to build within a $1.6 billion development nearer the baseball park. Oakland officials were irate, but Stern said there are several precedents in the NBA for moving teams within markets, most recently the move of the Nets from Newark to Brooklyn.
The Bay Area already has an NHL team in San Jose, the Sharks. Like Hansen in Seattle, the Warriors owners envision an entertainment district around the arena.
McCollum said he doubted the San Francisco plan will have an impact on Hansen’s project.
“He’s worked long and hard with the city and county in putting forward this proposal,” he said. “I don’t think what happens in San Francisco will make a difference. This is the best deal for all parties that can be put together in Seattle.”
Nevertheless, Hansen, a Seattle native but a San Francisco resident, described the public-private partnership as “one of the best” a city has been offered for an NBA/NHL arenas. At the moment, on paper, there is a new leader.
The advisory panel is loaded with top names from the Seattle business community, including Blake Nordstrom, director and president of the Nordstrom clothing store empire. Nordstrom was a minority owner in the ownership group that sold the Sonics to Oklahoma City in 2006, but reportedly voted against the sale. None in the new group, however, appears to have significant ties to the maritime, industrial or freight enterprises that have complained about the location as potentially damaging to their interests in SoDo.
McCollum said Hansen would not comment on whether any members are or would be investors with him in the project. He said Hansen hoped to announce the identities of his arena partners within two weeks. Disclosure of the group is not tied to the review process soon to begin with the Seattle City Council and King County Council.
Other members: Dwayne Clark, chairman and CEO, Aegis Living (retirement living); Andy Jassy, senior vice president, Amazon (publishing); T.J. McGill, co-founder and managing partner, Evergreen Pacific Partners (private equity); Nate Miles, vice president, Eli Lilly (pharmaceuticals); Jeff Wright, chairman of the board, Space Needle Corp. (developer); Eddie Poplawski, president, Barclays Realty and Management (property management; also owner of the Bellingham Bells baseball team in the West Coast League), John Meisenbach (founder, president of MCM financial services) and Stein Kruse, president and CEO, Holland America Line (cruise ship travel).
8 Comments
I always thought it was interesting that the NBA was in Oakland instead of SF. But I fully understand the city of Oakland and Warrior fans there not happy with this move. In the past several years the NBA has moved the Grizzlies, Sonics, Hornets, Nets (rather, will be moving the Nets) and now the Warriors. Is all this good business sense or is the NBA taking it’s fanbase for granted?
I can get behind this kind of financing moreso than what’s been proposed for the new Seattle arena. Hansen’s proposal being essentially a loan smells a lot like what Jeff Smulyan had with his purchase of the M’s to me, though that’s the skeptic in me talking. But Lacob and Guber have thrown down the gauntlet and you can but the city and county councils here are looking very closely at this. What Hansen needs to do is somehow sweeten the pot. Make his deal have so many benefits to the city that they go with it and it has to be more than just improving the quality of life in Seattle by bringing the NBA here because that alone won’t fly. Especially when the Sounders have more than replaced the loss of the Sonics and the Storm have won a championship since the team left for OKC.
I always thought it was interesting that the NBA was in Oakland instead of SF. But I fully understand the city of Oakland and Warrior fans there not happy with this move. In the past several years the NBA has moved the Grizzlies, Sonics, Hornets, Nets (rather, will be moving the Nets) and now the Warriors. Is all this good business sense or is the NBA taking it’s fanbase for granted?
I can get behind this kind of financing moreso than what’s been proposed for the new Seattle arena. Hansen’s proposal being essentially a loan smells a lot like what Jeff Smulyan had with his purchase of the M’s to me, though that’s the skeptic in me talking. But Lacob and Guber have thrown down the gauntlet and you can but the city and county councils here are looking very closely at this. What Hansen needs to do is somehow sweeten the pot. Make his deal have so many benefits to the city that they go with it and it has to be more than just improving the quality of life in Seattle by bringing the NBA here because that alone won’t fly. Especially when the Sounders have more than replaced the loss of the Sonics and the Storm have won a championship since the team left for OKC.
If it all falls into place, the arena that would be built in SoDo is still an extremely good deal compared to what other communities have to pay. Of course you’ll get the crowd who a) doesn’t want an arena built at all around here and b) have no real concept of money sit there and say “see, San Francisco has a couple guys who will pay for it all out of their own wallets. Why don’t we make Hansen do the same thing?”
I say congratulations to San Francisco and Seattle for having people willing to put so much money into these projects. I’m not even interested in comparing them to each other or concerned about which side is getting the better deal. It’s a pretty sweet thing for both areas, so why does it even matter?
Can’t wait for the Memphis Grizzlies and Florida Panthers to make their respective debuts in our brand new arena!
If it all falls into place, the arena that would be built in SoDo is still an extremely good deal compared to what other communities have to pay. Of course you’ll get the crowd who a) doesn’t want an arena built at all around here and b) have no real concept of money sit there and say “see, San Francisco has a couple guys who will pay for it all out of their own wallets. Why don’t we make Hansen do the same thing?”
I say congratulations to San Francisco and Seattle for having people willing to put so much money into these projects. I’m not even interested in comparing them to each other or concerned about which side is getting the better deal. It’s a pretty sweet thing for both areas, so why does it even matter?
Can’t wait for the Memphis Grizzlies and Florida Panthers to make their respective debuts in our brand new arena!
Seriously guys? What’s not being said here is that after 30 years, the city of San Francisco owns…nothing! In Seattle, the city, and to a lesser extent, the county, are just putting up bonding ability (the $200M loan) and taking on highly-mitigated risk of project failure. After 30 years of this new arena paying for itself (and creating a whole lot of other economic and civic pride benefits) the city OWNS THE WHOLE THING…land and building. How is the SF deal better? It’s just different, but not better in the long run.
Seriously guys? What’s not being said here is that after 30 years, the city of San Francisco owns…nothing! In Seattle, the city, and to a lesser extent, the county, are just putting up bonding ability (the $200M loan) and taking on highly-mitigated risk of project failure. After 30 years of this new arena paying for itself (and creating a whole lot of other economic and civic pride benefits) the city OWNS THE WHOLE THING…land and building. How is the SF deal better? It’s just different, but not better in the long run.
The SF deal is better because the City of SF will be able to collect taxes on parking, admissions, concessions, etcetera (unless there’s a trade-off of sorts involved) from the new arena, so it becomes a revenue producer at minimal cost to taxpayers. I like what Hansen’s proposing, along with the financial parameters being suggested, but owning the arena after 30 years wouldn’t necessarily be a bargain to the City of Seattle/King County because there’ll be the expense involved with upgrading and maintaining a three-decades old facility, standard operational costs AND a new lease for an NBA and/or NHL team might be drawing down.
And, jafabian, the NBA may be in Oakland because the Cow Palace (which IS still open) was built in 1941 and considered antiquated even in the 1970’s, while the Coliseum Arena in Oakland was 5 years old when the team moved. It’s now the NBA’s oldest arena, though it got a $121 million upgrade (very similar to KeyArena’s) in 1996-97.
I feel bad for Warriors fans in Oakland because they’ve given great support (18,000+ average attendance each of the past five seasons) to a poorly-run franchise with one winning season since 1994…it’s been a far better NBA city than either Stern or Warriors owners have deserved.
The SF deal is better because the City of SF will be able to collect taxes on parking, admissions, concessions, etcetera (unless there’s a trade-off of sorts involved) from the new arena at minimal cost to taxpayers. I like what Hansen’s proposing, along with the financial parameters being suggested, but owning the arena after 30 years wouldn’t necessarily be a bargain to the City of Seattle/King County because there’ll be the expense involved with upgrading and maintaining a three-decades old facility, standard operational costs AND the lease for an NBA and/or NHL team might be drawing down.
And, jafabian, the NBA may be in Oakland because the Cow Palace (which IS still open) was built in 1941 and considered antiquated even in the 1970’s, while the Coliseum Arena in Oakland was 5 years old when the team moved. It’s now the NBA’s oldest arena, though it got a $121 million upgrade (very similar to KeyArena’s) in 1996-97.
I feel bad for Warriors fans in Oakland because they’ve given great support (18,000+ average attendance each of the past five seasons) to a poorly-run franchise with one winning season since 1994…it’s been a better NBA city than either Stern or Warriors owners have deserved…but then we know how that works, don’t we?