Warriors development deal, financing taking shape

Courtesy RenderingsChange: An expanded proposal for a Warriors arena

Courtesy RenderingsChange: An expanded proposal for a Warriors arena

A development across the street from the proposed waterfront basketball arena could house a 200-room hotel, 125 residential units and 34,000 square feet of retail space, according to information the Warriors provided to The City.

The team wants to build a privately financed 17,500-seat arena and 105,000-square-foot retail complex on city-owned Piers 30-32, a waterfront site just south of the Bay Bridge on The Embarcadero. But the deal includes the team’s use of a triangular plot of land across the street from the piers, Seawall Lot 330, where the hotel and other developments would be located.

Warriors officials stressed that the ideas for the seawall lot site, including that it could contain two 150-foot towers to house the residential units and hotel, are preliminary and the focus of the planning so far has been on the piers where the arena would be located.

“We are not that defined yet on that side,” Warriors President and Chief Operating Officer Rick Welts said. “This is all under discussion right now with The City. We haven’t really put anything formally forward in terms of proposals of exactly what we are going to do.”

PJ Johnston, a spokesman for the project, said the team gave The City preliminary numbers based on what is legal and practical for the site in order for fiscal forecasting to be done for the project.

Under city law, San Francisco had to conduct what is known as a fiscal feasibility report for the entire development deal.

That report, which was presented to a citizens advisory committee Tuesday night, contains the broad outlines of the deal’s business plan, including what could be constructed, what the project’s costs and benefits would be, and how it would be financed.

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.

Matz said that such a public-private partnership is needed to refurbish the piers since the Port of San Francisco, which owns the land, does not have the ability to independently issue bonds for such an expensive project.

“To that end, we should make it feasible to develop there,” Matz said of the benefits of the pier ?refurbishment.

While no exact deal for the reimbursement has been finalized, proceeds from the sale of Seawall Lot 330 — which is valued at ?$30.4 million — could also be used to pay down the cost of the pier rehabilitation. The report also considers a 75-year lease on the plot.

If the entire project is constructed, it could eventually bring in revenue to The City’s general fund. Preliminary estimates in the report suggest that property and payroll taxes from the project could pump an additional $13.8 million into city coffers each year.

In addition, the report said, the project could create more than 2,800 permanent jobs and more than 5,000 construction jobs.

The fiscal feasibility report needs approval from the Board of Supervisors, and the entire project still needs approval from several local and state agencies. A final deal regarding the status of Seawall Lot 330 also has yet to be negotiated.

mbillings@sfexaminer.com

Bay Area NewsBay BridgedevelopmentGolden State WarriorsPlanningPort of San Francisco

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