Who's counting the money?

Grow a backbone and actually negotiate with those who'd develop a new arena for the Warriors

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tredmond@sfbg.com

EDITOR'S NOTES A few months before the San Francisco Giants went to the ballot to ask the voters to approve a new stadium on the edge of Mission Bay, Peter Magowan, who was the managing partner, and Larry Baer, his chief aide who runs the show now, came by our office to talk about the plan. Magowan was no fool, and he asked me a simple question: What would it take for the Guardian to support a downtown stadium?

I had already written an editorial on the topic, and I was happy to share. We were all in favor of building a ballpark on the waterfront –with two conditions: No public money, and no parking.

Well, Magowan's plan was almost there. It was almost entirely privately financed. There would be no new parking, making it the most transit-friendly event center in the Bay Area. In the end, it involved a $10 million tax abatement from the city treasury, and $80 million in public amentities, which put us off a bit — but the Giants had the right idea. I voted for it. Turned out well, too.

That's where I am on the Warrior's deal: You want to build an arena on the waterfront? I'm not against that. But right now, I'm dubious. We can argue about the aesthetics and the impacts on people who live nearby and work on mitigations, but the bottom line is simple: If it's a bad deal for the city, we shouldn't accept it.

San Francisco isn't terribly good at negotiating deals with private investors for big projects. City officials get too excited — Mayor Ed Lee has already called the Warriors arena his legacy project. Building anything big creates construction jobs, which gets labor involved. The notion that people will come to town to see events gets the hotels and restaurants (and the speculators who own real estate nearby) all atwitter. And the taxpayers who might end up with a raw deal get pushed to the side.

What — you don't want a basketball team?

But let's remember: Oakland got so excited about bringing the Raiders back that the city gave away the store, and is still paying for it. San Francisco went overboard to get the America's Cup here — and so far, I'm not seeing the economic benefits. Five years from now, I think a lot of us are going to be wondering: What exactly did all the Twitter tax breaks really do for the city?

And the financing on this Warriors arena looks more than a little hinky. The city's paying $120 million — plus 13 percent interest — to the team, and when all the money is counted, I bet they make out better than we do.

You want to play real-estate deal-making in the big leagues, you have to get cold-blooded and hard-eyed and be willing to look across the table and say No. You have to be willing to look at a crumbling pier that desperately needs to be repaired with money you don't have and say: Better it falls into the Bay than the public gets taken to the cleaners for a sparkling project. If you can't do that, then you shouldn't represent the people of San Francisco.

And from everything I've seen, I don't think anyone in the Mayor's Office is thinking that way.

The Warriors aren't our partners; they're capitalists, looking to make the most money they can and take the least possible risk. San Francisco doesn't need to grovel and beg — this is a world-class city, and developers need our permission to come here and make their fortunes. This is public land that the team wants to use, public land in a first-class location that offers immense economic rewards.

The supervisors don't need to feel pressured to take the deal that's in front of them. They can do what the mayor won't, and say: Nah. We're good the way we are. Come back with something better and we'll talk. And you know what? That's exactly what will happen.

Comments

A little too late. The sups slobbered and tripped all over themselves yesterday to approve this "fiscal feasibility study". And during the dog and pony show in front of the BOS GSW flat out lied to Avalos. Who asked if "$30 million was a fair sales price for seawall lot 330".

He asked if GSW would be asking the city to increase the height limits , currently 105 feet , to 150 feet? And if they were going to do that, "wouldn't that increase the sales price on the lot?" Well he got it right. But GSW lied and said "no we can live with the current 105 feet".

At last nights GSW/Port dog & pony show on seawall 330 the question of the heights on the two towers came up. Guess what? "Our plans call for two towers at 150 feet and 50 foot podiums along the Embarcadero."

The city is getting screwed. The city should insist on a new MIA appraisal with the new 150 heights. I would bet the increase would yield a higher sales price for the public property. Most likely by 10 or 20 million dollars. Thereby saving the taxpayers of San Francisco 10 or 20 million of borrowed money. Borrowed money we happen to be paying the Hollywood billionaire owners a 13% rate of return on.

Posted by Guest on Nov. 21, 2012 @ 10:32 am
Posted by lillipublicans on Nov. 21, 2012 @ 10:57 am

The idea that we will pay 13% interest for this, at a time when the Fed is lending money to the big banks essentially for free, is obscene.

Posted by pdquick on Nov. 21, 2012 @ 11:36 am

Credit risk.

Posted by Guest on Nov. 21, 2012 @ 12:24 pm

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