The Warriors, the city of Oakland and Alameda County
announced a $128M deal that keeps the Warriors in Oakland "for at
least 20 years and puts taxpayers at limited risk," according to
this morning's OAKLAND TRIBUNE. The renovated Oakland Coliseum
Arena will increase capacity to 19,200, with 60-72 luxury suites
and a lower bowl of 9,500 clubs seats. Fans would have to pay
PSLs on 7,500 of the best seats, which will be sold "for decade-
long or lifetime contracts at an average price of $2,500." About
$121M in municipal bonds will be sold to finance reconstruction
of the arena, a $3.5M Oakland practice facility, marketing
expenses, and $15M in cash to the team for the one year at the
Cow Palace in Daly City. Officials expect to replace most of the
bonds with bank loans within a year, "leaving the public with no
more" than $20M in bond debt. Although the lease calls for a 20-
year commitment with four five-year extensions, the Warriors can
leave Oakland after 10 years if the team pays off the debt
assumed by the city to renovate the arena (Robert Salladay,
OAKLAND TRIBUNE, 2/22).
DETAILS: The city and county will assume the risk of
construction overruns. Officials hope to sign a contract for a
fixed price below the $90M budgeted. If construction is not
complete by November '97, the localities must pay the Warriors
$125,000 per game. The team has guaranteed the city and county
$10M a year to pay off construction debt and facility operation
costs -- including $1.5M in rent, $7.4M in club seat fees, and
$1.5M from a ticket surcharge. The Coliseum will collect 50% of
all profits from Warriors games until a special reserve fund
reaches $7M, after which the Coliseum collects 25%. The team
will receive up to $3.6M of advertising revenue, most of parking
revenue, 2/3 of concession sales and 50% of gourmet food sales.
They also get 50% of profits from an estimated 130 ice shows,
circuses and concerts. The Warriors will donate 5% of basketball
profits to Oakland youth charities (OAKLAND TRIBUNE, 2/22).
Additional funding includes $7.5M from naming rights and $7M from
the concession contractor (S.F. CHRONICLE, 2/22). The team will
receive $2.5M for the first-year's PSL marketing expenses and
$500,000 each year after. East Bay officials consider the
agreement "a sweet one," especially by beating out San Jose
(Dennis Akizuki, SAN JOSE MERCURY NEWS, 2/22).
