A privately financed arena—something not done in recent history. Most arenas since 2000 have received some form of public funding:
| Team | Arena Name | Publicly Financed |
| Dallas Mavericks (2001) | American Airlines Arena | 30% |
| San Antonio Spurs (2002) | AT&T Center | 84% |
| Oklahoma City Thunder (2002) | Chesapeake Energy Arena | 100% |
| Houston Rockets (2003) | Toyota Center | 100% |
| Memphis Grizzlies (2004) | FedEx Forum | 83% |
| Charlotte Bobcats (2005) | Time Warner Cable Arena | 100% |
| Orlando Magic (2010) | Amway Center | 87.5% |
| Brooklyn Nets (2012) | Barclays Center | 40% |
Source: Marquette University NSLI Sports Facility Reports
Even the new Sacramento Kings’ arena, projected to cost $477 million, has the City of Sacramento contributing $223 million or 46.75%, while the Kings themselves will contribute $254 million.[1]
Joseph Lacob (“Lacob”), a Silicon Valley venture capitalist, and Peter Guber (“Guber”), a Hollywood entertainment mogul, purchased the Golden State Warriors in July of 2010 for an estimated purchase price of $450 million.[2] The Golden State Warriors currently play in Oakland at the Oracle Arena (originally known as the Oakland Alameda County Coliseum) which has a seating capacity of 19,596, was built in 1966 and then renovated in 1996.[3] In February of 2013, Lacob and Guber announced that the Warriors would be leaving Oakland for a new privately financed arena to be built on San Francisco Embarcadero Piers 30-32, near the foot of the Bay Bridge and a short walk from downtown.[4] The new arena was to be open for the 2017-2018 season.[5] The crumbling 13 acre pier is owned by the Port of San Francisco which now uses the site for parking.[6] The new proposed arena would not require any money from the city’s general fund or the imposition of new taxes.[7]
The model for the creation of the Pier 30-32 arena on the 13 acre parcel is the deal that was created in 1996 between the city and the San Francisco Giants, who were granted a 66 year lease of port land to build their new baseball stadium. Unfortunately Piers 30-32 never became a reality in that there were political hurdles, an outcry of public opposition, a myriad of governmental approvals and regulatory obstacles, infrastructure and parking issues, and environmental issues.[8]
Lacob and Guber changed their direction and announced that a new site had been purchased in Mission Bay, i.e. – 12 acres from SalesForce, in April of 2013. The site is bounded by Terry Francois Boulevard, 16th Street, 3rd Street, and South Street, and just south of AT&T Park. The projected cost of the arena is $800 million and, with associated commercial development, could exceed $1 billion. A waterfront park is planned across from the arena. The team and the site would be a prime benefactor when the Central Subway project is completed, allowing for much easier transportation access to the newly planned arena.[9]
The new arena’s features will include:
- 18,064 seat multi-purpose arena
- More than 100,000 square feet of retail space, mostly food-oriented
- 2 acres of plazas and public space – approximately 30% of the total site
- A 35,000 square foot public plaza on 3rd Street, larger than Union Square
- A 24,000 square foot public plaza of open space on the southeast side of the project
- A view deck with newly opened vistas to San Francisco Bay
- Approximately 580,000 square feet of office/biotech/lab space
- Approximately 950 Parking spaces (in three concealed/underground levels)
- 300 spaces of permanent bike valet parking[10]
The Warriors have a tremendous model to follow. AT&T Park is the first privately funded baseball stadium since Dodgers Stadium opened in 1962. No new taxes, and no money from the San Francisco general fund were used to build the baseball stadium. Giant owners basically had no choice but to use private monies in that voters defeated four referendums between 1987 and 1992 that sought public funds for replacement of the wind-swept Candlestick Park. The owner of the new ballpark is China Basin Ballpark Corp., a subsidiary of the San Francisco Giants. The cost of the baseball stadium was $357 million and opened in March of 2000. The private financing included the following components:
- $170 million loan from Chase Manhattan Bank;
- $70 million from the sale of charter seat licenses;
- $102 million from the sale of naming rights, sponsorships and other sources; and
- $15 million in tax increment financing by the city’s redevelopment agency.
The Giants indicated that private financing only worked in their case because they built a baseball stadium at a time when San Francisco and Silicon Valley were flush with cash from booming technology companies. “Giants’ President, Peter Magowan says most teams couldn’t build a stadium without public funds, and that even the Giants couldn’t do it now.”[11]
Lacob and Guber may have undertaken a remarkable feat in that the Warriors will not only own the property outright, but will finance construction of the new arena. “It might be the first time that there’s been a clear entire private funding of not only construction but also the land,” Andrew Zimbalist, professor of economics at Smith College, said. “It looks like Mr. Lacob is going the extra mile to get this deal done. And perhaps breaking new ground in terms of private financing.”[12]
It is also advantageous to have political support as Mayor Ed Lee was fully supportive of the new Mission Bay arena. “The legacy for me,” Lee said, “was getting the Warriors to come back to San Francisco.”[13]
[1] Walker, Don, Journal Sentinel, “With Parallels to Milwaukee, Sacramento puts faith in New Arena,” November 11, 2014, http://www.jsonline.com/news/milwaukee/with-parallels-to-bucks-sacramento-puts-faith-in-new-arena-b99386032z1-282295611.html
[2] Kirchen, Richard, Milwaukee Business Journal, “Note to Milwaukee: Golden State Warriors to Privately Finance New $600 Million Arena,” April 24, 2014, http://www.bizjournals.com/milwaukee/blog/2014/04/note-to-milwaukee-golden-state-warriors-to.html?page=all&r=full
[3] http://www.insidearenas.com/western/OracleArena.htm
[4] Matier & Ross, S.F. Gate, “Warriors to Build New Arena, Move Back to S.F.,” February 15, 2013, http://www.sfgate.com/bayarea/matier-ross/article/Warriors-to-build-new-arena-move-back-to-S-F-3575560.php
[5] Id.
[6] Id.
[7] Id.
[8] Id.
[9] Sorkin, Sam, SB Nation: Golden State of Mind, “Joe Lacob: Warriors aiming to Open San Francisco Arena by ‘Fall of 2017’,” December 7, 2014, http://www.goldenstateofmind.com/2014/12/7/7344707/an-update-on-the-san-francisco-arena
[10] Staff Report, CSNBayarea.com, “Lacob: ‘I worry about’ losing Oracle’s Vibe in New Warriors Arena, February 11, 2015, http://www.csnbayarea.com/warriors/lacob-i-worry-about-losing-oracles-vibe-new-warriors-arena
[11] The Associated Press, ljworld.com, “Privately Built Pacific Bell Park a Curse to Other Teams,” October 22, 2002, http://www2.ljworld.com/news/2002/oct/22/privately_built_pacific/ and http://www.ballparks.com/baseball/national/pacbel.htm
[12] Grossberg, Adam, Lisa Pickoff-White and Mina Kim, KQED News, “Warriors Shift Plans for New Arena to Mission Bay,” April 22, 2014, http://ww2.kqed.org/news/2014/04/21/new-warriors-stadium-mission-bay/
[13] Cote, John, S.F. Gate, “Warriors Shift Arena Plans to Mission Bay,: April 22, 2014, http://www.sfgate.com/warriors/article/Warriors-shift-arena-plans-to-Mission-Bay-5418579.php