The dispute apparently arises over what the team should pay once it vacates Oracle and moves to a new arena in San Francisco in 2019, seven years before the bond’s 30-year mark. To complicate matte…
OAKLAND — Two years away from a move to San Francisco, the Golden State Warriors and the authority operating Oracle Arena are at odds over how much debt the team owes.
Coliseum authority Executive Director Scott McKibben said this week the two sides have a difference in opinion over the remaining $55 million debt and will resume talks once the 2017-18 season begins.
“Our position has been they owe the net amount,” McKibben said. “Their position has been they owe less than that.”
At the heart of the issue is a 20-year lease signed in 1996 to include upgrades to the arena, which were to be paid over 30 years. The Warriors have dutifully paid $7.5 million a year as required by the agreement and plan to do so during a two-year extension to play at Oracle inked in 2016.
The dispute apparently arises over what the team should pay once it vacates Oracle and moves to a new arena in San Francisco in 2019, seven years before the bond’s 30-year mark. To complicate matters, the 1996 deal was between the authority and the team’s previous owners.
The 20-year-old license agreement said the NBA franchise may terminate it after 2007 by “paying the authority a termination payment in an amount sufficient to retire all of the then outstanding bonds, as well as other debts associated with the Arena Project.” After the agreement expired last year, the Warriors had the option to extend it up to five years but opted for a two-year extension.
McKibben and a spokesman for the Warriors would not go into detail about how much the dollar-amount difference is, but authority board member Ignacio De La Fuente said the 1996 agreement is “clear as water.”
“They still have to pay whatever the bonds are — period,” De La Fuente said.
Warriors spokesman Raymond Ridder, in a statement, said, “As we’ve always said, the Golden State Warriors will fulfill their obligations under the License Agreement.” He declined to elaborate.
Earlier this month, Oakland officials said the Warriors had not paid a bill totaling almost $816,000 for the June NBA Championship parade through downtown. Representatives from the team said they had questions about the bill, specifically how the amount due tripled from an early estimate and why the city is also now asking for $244,000 in costs from the 2015 championship parade.
Oakland Councilmember Rebecca Kaplan, a former member of the Coliseum authority, said recent reports indicate the team is not hurting for money. ESPN this week reported the Warriors last season finished second in net income, taking home $91.9 million. Forbes has valued the franchise at $2.6 billion. Owners Joe Lacob and Peter Guber paid $450 million for the team in 2010.
“I think it’s incredibly inappropriate for them to be threatening not to pay the full amount they owe. The people of Oakland are struggling and this is the public’s money,” Kaplan said. “I would hope they care enough about their reputation that they wouldn’t want to be seen as a deadbeat.”
The city of Oakland and Alameda County currently face $83 million in debt from renovations made to the Coliseum to lure the Raiders back to Oakland from Los Angeles in 1996. The Al Davis-led Raiders were not obligated to pay the debt.
McKibben is hoping the NFL will help extinguish the football stadium debt by using the $100 million it offered Oakland to build a new home for the Raiders.
“It would seem to me a logical next step would be for the NFL to consider that the tenant left town and left us with the mortgage,” he said.
NFL executive vice president Eric Grubman said he had no comment.
The city and county, which is facing the strong possibility of losing the Raiders, A’s and Warriors as Coliseum complex tenants, almost lost McKibben too. The executive director received an offer from former Oakland city administrator and incoming Santa Clara City Manager Deanna Santana to oversee Levi’s Stadium Authority but opted to stay in Oakland after he was given a matching counter offer.
Last week, the Coliseum authority board approved a three-year contract extension which brings McKibben’s annual salary up $50,000 a year to $300,000 and sweetened the deal with a $500-a-month car allowance.
Authority board members hope McKibben can guide the Coliseum through a major transition, with the Warriors and Raiders leaving town and the A’s saying they are focused on moving to a site by Laney College.
“We appreciate the wisdom and experience that Scott brings,” Oakland Councilman and authority board member Larry Reid said. “We remain hopeful that we can create a long-term home for the Oakland Athletics at this world class property. Our East Oakland site is unique in its development opportunities and the ease with which we can create something unique for the A’s that does not disrupt a neighborhood or the flow of Bay Area traffic. Scott can help us get there.”
