Costs Rise For New Warriors Arena, Project Schedule Months Behind Targeted Opening
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).