Warriors’ Arena Leaves Taxpayers on Hook for $29 Million in Unfunded Costs, City Admits
New City Analyst Report Shows Arena Won’t Make Nearly as Much Revenue as Previously Reported, Will Cost $10 Million Annually
San Francisco – New revenue projections released by the City of San Francisco’s Budget and Legislative Analyst shows the proposed Golden State Warriors’ Arena would leave taxpayers on the hook for at least $29 million in unfunded transportation improvements – a budget shortfall that would be financed through the sale of revenue bonds or other taxpayer-funded sources.
The same budget analysis, posted on the City’s website a day before the Budget and Finance Committee reviewed a transportation ordinance to support the proposed arena, also revealed that the city would incur $10.1 million in annual operating expenses related to the arena, which would produce only $1.5 million in net revenues. These numbers conflict with the City’s previous net revenue estimate of $8 million – a figure that City representatives have widely touted in presentations to neighbors and interest groups for more than six months.
“After months of perpetuating bloated revenue estimates and partial truths, the City is now revealing that this project won’t generate much income at all and in fact will force San Francisco taxpayers to go into debt to pay for this ill-conceived arena project,” said Bruce Spaulding of the Mission Bay Alliance, a coalition of UCSF stakeholders, healthcare workers and faculty who oppose the proposed Warriors’ arena.
The Board of Supervisors is now tasked with considering whether to authorize the City’s upfront investment of nearly $60 million to pay for additional light rail trains and other transit improvements to accommodate an influx of 18,500 visitors to the proposed arena.
While the arena project is expected to generate $25.4 million to cover some of these costs, City officials are now scrambling to identify ways to cover the $29.9 million balance.
An analysis conducted for the Alliance by Jon Haveman of Marin Economic Consulting found that an alternative development, one suited to biotechnology, for instance, would bring in anywhere between $2 million to $7 million a year in additional revenues and accommodate 2,000 jobs, compared to less than 500 low-paying jobs produced by the arena. This revenue could help the City pay for more affordable housing or improvements to other parts of the Muni system, for example.
“Based on the numbers, it is clear that the proposed arena project would not result in a substantial economic benefit to the City,” Haveman said Wednesday to the Board of Supervisors’ Budget and Finance committee.
The committee voted to recommend approval of the proposed transit improvement plan, but the Board of Supervisors have the final say. The item is scheduled to be discussed during the Supervisor’s Dec. 8, 2015 meeting…
The Mission Bay Alliance is a coalition of UCSF stakeholders, donors, faculty, physicians and the working men and women of San Francisco who are concerned about the impact of the proposed Golden State Warriors’ stadium on the future of the vibrant community and medical campus at Mission Bay. The Alliance has joined a coalition of world-renowned scientists from UCSF and the U.S. National Academy of Sciences and the California Nurses Association in calling the proposed Warriors’ Arena a “disaster” for Mission Bay. For more information about the Mission Bay Alliance, visit www.missionbayalliance.org.