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SBD/August 26, 2013/FacilitiesPrint All
The Warriors' plan to build a waterfront arena in S.F. is "months behind its original schedule, and the repair cost for piers to hold the venue has increased" by as much as $50M, according to a front-page piece by John Cote of the S.F. CHRONICLE. The team could "miss its 2017 targeted opening, and the new figure -- if it holds -- raises the question of who would cover the bill." However, Warriors reps "dispute the cost projection and downplay the delays as routine for a complex project." They maintain that the arena "will be ready for the start of the 2017-18 NBA season but acknowledge their schedule is tight -- and doesn't leave much room for unforeseen problems." A tentative financial framework between the Warriors and the city "calls for the team to pay up front to rebuild the slowly crumbling piers, which the city would continue to own and lease to the team for 66 years." The city would then "reimburse the Warriors up to" $120M for the rehab work from revenue generated by the project. A nonbinding term sheet is "months from being finalized, but team and city officials said they are scrapping a contentious provision that would have entitled the Warriors to 13 percent interest on unreimbursed construction costs." The team last spring replaced engineering and design firm AECOM with S.F.-based Rutherford + Chekene, but the Warriors "insist that their engineering shuffle won't delay" the projected '17 opening. An "unforeseen complication, though, could force the team to play at least another year at Oracle Arena in Oakland or another venue." That could be "tricky for the Warriors, whose lease is up in June 2017 and whose decision to move to San Francisco has displeased East Bay officials" (S.F. CHRONICLE, 8/26).
TESTING, TESTING: SPORTSBUSINESS JOURNAL’s Don Muret notes the Warriors are “building 16 theater boxes at Oracle Arena to fill the need for a smaller suite product and test the market in anticipation" of their new S.F. arena. The Warriors are spending $3M for the retrofit, a project that “includes construction of a new VIP Club for 240 floor-seat holders.” The franchise is “adding a second row of 114 floor seats for the coming season priced at $750 a seat per game.” The work will “be done in time for next season.” The four-seat theater boxes “replace eight regular suites on the south side of the arena’s mezzanine level.” The team is “offering both one-year deals for $90,000 and the four-year ‘Bridge to San Francisco’ package, starting at $80,000 a year and escalating to $95,000 in the agreement’s final year.” About 10 NBA teams have "introduced theater and loge boxes over the past five years." Warriors President Rick Welts said that as of last week, "two weeks into the sales process, the Warriors had sold two theater boxes and had commitments for two more units." Muret notes the 3,000-square-foot VIP Club "provides a new space for floor-seat holders." Welts said that the franchise "plans to sell naming rights to the club" (SPORTSBUSINESS JOURNAL, 8/26 issue).
Raiders Owner Mark Davis is "where he wants to be" in regard to the team staying in Oakland, and he "makes that abundantly clear," according to Tim Kawakami of the SAN JOSE MERCURY NEWS. Davis is "trying to repair and renovate" the Raiders and O.co Coliseum, "two institutions that have seen much, much better days." Davis "needs a long-term home for his franchise" heading into the Raiders' final year on their most recent lease at Coliseum. Davis said, "What I would like to do is build (a new stadium) right here and start breaking ground tomorrow." Kawakami wrote the "point is this: With stadium free agency beckoning, Davis is setting an unofficial countdown, either to get this done in Oakland or to move on." Kawakami: "We'll see if it jump-starts talks in Oakland, if he keeps to it, and what he might do if the Coliseum redo concept continues to lag. Is the possibility of sharing the 49ers' new Santa Clara stadium starting in 2014 definitely out of the question now?" Davis said, "For me, I would say it probably is." All indications are that Davis "has never been in favor of moving into the 49ers' stadium, despite the NFL's wishes." Davis when asked if the possibility of the team moving to L.A. was on his mind said, "Always. An opportunity for us to get a new stadium is always on my mind. Oakland is first, OK? That's all I can say." The "most likely short-term option, though, is extending the lease in Oakland." Meanwhile, Davis and his mother reportedly "recently bought out a limited partner to lift their stake in the team above" 50% (SAN JOSE MERCURY NEWS, 8/25).
Minnesota Gov. Mark Dayton said that Vikings Owner Zygi Wilf and his family's legal problems "should not keep" the team's new stadium from being built, according to Sid Hartman of the Minneapolis STAR TRIBUNE. Dayton: "I think that is extremely unlikely. Anything is possible, but I think we’ll have a stadium built." He added that the NFL is "taking a neutral position right now" on the topic. Dayton: "They obviously are supportive of the Wilfs, as they are of the other owners, but I think it's a case now where the investigative auditors need to go in and make sure that the people of Minnesota got a square deal." Dayton was asked if the Vikings could be relocated to a different city if the stadium deal were to fall through because of the Wilfs' legal issues and responded, "I certainly want them to succeed, I want them to stay in Minnesota and have a great season. I want to see a Super Bowl victory before I pass on" (Minneapolis STAR TRIBUNE, 8/26). In St. Paul, Brian Murphy reports Vikings co-Owner & President Mark Wilf is "confident the team's new stadium project will be completed in time for the 2016 season despite stalled lease negotiations" with the Minnesota Sports Facilities Authority, which is auditing the team's owners. Wilf "declined to comment" last night on the financial due diligence investigation the MSFA ordered in the wake of the family's legal issues. The team "expects groundbreaking to start on time in November." Mark Wilf said, "We see no reason why we're not going to be able to move forward. We're excited about the project and working hard to make the stadium something fans can be excited about" (ST. PAUL PIONEER PRESS, 8/26).
NEW ISSUES POPPING UP? In Minneapolis, Ragsdale, Kaszuba & Moore reported the Vikings' stadium project "encountered fresh problems on Friday" when MSFA attorney Peter Carter revealed that the Wilfs "have refused to prove they can pay their share." Carter said despite "multiple requests" for such information, the Wilfs to date had "refused to provide us with any personal financial information that our advisers need to obtain comfort that the New Jersey court case will not impact their ability to meet their financial obligations." MSFA Chair Michele Kelm-Helgen earlier Friday had "called on the team to return to negotiations over final stadium contract language or risk a construction delay that could push back the scheduled opening date of July 1, 2016, by at least a month." Kelm-Helgen said that talks "must resume while the authority’s lawyers conduct a review of the New Jersey litigation and perform extensive background checks on the Wilfs’ finances." Dayton on Friday said that he "strongly supports the authority's position." Vikings VP/Public Affairs & Stadium Development Lester Bagley said, "Until they complete this due-diligence inquiry and have the confidence that we are good partners, we can’t have partnership negotiations." MSFA members in response to the team's position suggested that they "stop negotiating and merely offer the state’s position to the team -- take it or leave it." Kelm-Helgen said that the authority "would like to have the agreements signed and the due-diligence report finished by Sept. 15" (Minneapolis STAR TRIBUNE, 8/24).
COURT OF PUBLIC OPINION: The Vikings on Friday posted a statement on the team's website that read in part, "Rest assured Vikings fans, the new home for Vikings football remains on time and on budget." It continued, "Since the MSFA’s inquiry, the Vikings and the Wilfs have fully cooperated with the due diligence process, providing detailed financial documents and background information. ... The MSFA must feel entirely confident about the Wilfs' ability to fulfill their stadium obligations. The ongoing inquiry makes it clear the Authority currently feels it does not have that assurance. How can we finalize fundamental partnership documents without the full trust of our partner? Until the due diligence is complete and the MSFA has complete confidence in the Vikings organization, negotiations shouldn't move forward" (VIKINGS.com, 8/23). ESPN.com's Ben Goessling wrote, "While news about a possible eight-figure ruling against the Wilfs, and the state's ensuing outrage, might make for good drama, it seems unlikely to be anything more than a brief hindrance to a stadium project that many powerful people wanted to get done" (ESPN.com, 8/23). But PRO FOOTBALL TALK's Mike Florio wrote, "The Vikings have taken a fairly aggressive position in response to a fairly aggressive ploy from the MSFA. It easily could devolve into a game of chicken, with the Vikings eventually flying the coop" (PROFOOTBALLTALK.com, 8/23).
The NBA Kings announced that they have "filled out their downtown arena construction team with the hiring of AECOM," according to Tony Bizjak of the SACRAMENTO BEE. Kings President Chris Granger said that the firm "will take the lead this fall and next spring" in designing a $448M arena in Downtown Plaza. The group "will work in a Sacramento studio to enhance local input." Granger said that the facility will be "the most technologically advanced and noisiest arena in the world." He added that construction is "expected to start next August or September." Bizjak noted AECOM "has been lead architect for 11 NBA arenas" (SACRAMENTO BEE, 8/25). A SACRAMENTO BEE editorial stated the STOP group, pushing for a citywide vote on the Kings' new arena, "lost credibility" when former Kings bidder Chris Hansen was revealed as the mystery donor who paid for much of the petition drive. The group previously was seen "blasting city leaders for supposedly concealing the true size of the arena's public subsidy." The editorial: "There's no avoiding that big money is a big part of our democracy. That makes it essential that voters know where the cash is coming from" (SACRAMENTO BEE, 8/25).
ALL ABOUT STEVE: In Seattle, Brier Dudley wrote Hansen's "local boy who loved the Sonics" image has been "tainted by revelations of his political skulduggery." Former Kings co-bidder Steve Ballmer now has the opportunity to "take a more prominent role in the campaign" to bring a team back to Seattle. Perhaps Ballmer, who recently announced he will step down from his role as Microsoft CEO, "will buy out Hansen’s stake and take over the effort." Ballmer "would be a force" in the NBA, and "not just because he’d be the wealthiest owner, but because of the rare combination of personal skills and analytical capabilities that have enabled him to steadily grow Microsoft sales and profits." Perhaps Ballmer "would also pursue an arena on the Eastside, closer to his home, rather than the complex and controversial commercial real estate venture anchored by an arena that Hansen is trying to assemble in Seattle’s industrial zone." Dudley: "Who knows -- maybe Ballmer could even take over Paul Allen’s sports franchises in Seattle and Portland if Allen decides to move on." Ballmer has been "spotted visiting Seahawks offices" (SEATTLETIMES.com, 8/23).