SBD/November 13, 2012/Facilities

Critics Of Warriors' Arena Proposal Upset Over 13% Interest Rate

City of S.F. would be responsible for reimbursing Warriors up to $120M
The Warriors' proposal for a new waterfront arena in S.F. goes before the Board of Supervisors budget committee tomorrow, but "critics of the arena proposal have latched on to the 13 percent figure as an example of what's wrong with the framework deal being negotiated for the $1 billion project," according to Coté, Lagos & Knight of the S.F. CHRONICLE. Under the "conceptual agreement between the team and the city, the Warriors would pay for all up-front costs, with the city responsible for reimbursing the team for up to $120 million to rebuild the slowly crumbling 13-acre pier." The reimbursement money "could come from only three sources linked to the project." But the team would be "entitled to a 13 percent rate of return for any unreimbursed construction costs, and exactly when that rate would start applying is still subject to negotiation." Former S.F. Chief Administrative Officer Rudy Nothenberg yesterday wrote a letter to supervisors titled "Reject the 13% Interest Rate!" However, city officials said that the rate is "actually quite reasonable when talking about private developers building public infrastructure" (S.F. CHRONICLE, 11/13).

CITY IS MISSING OUT: In a special to the S.F. BUSINESS TIMES, S.F. Travel Association President & CEO Joe D'Alessandro writes, "One of the largest gaps San Francisco has in meeting the needs of convention and meeting planners is the lack of a large, indoor facility than can accommodate 18,000 attendees or more." A facility of this size "gives us an opportunity to host marquee events." This is an "opportunity that [is] too good to let slip by." It is time to "build an arena in San Francisco and bring the Golden State Warriors basketball team back home" (S.F. BUSINESS TIMES, 11/9 issue).
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