Warriors must pay $1.2 million in legal fees from battle over arena debt

OAKLAND >> Two months after the California Supreme Court rejected the Warriors’ appeal of a ruling ordering the team to pay Oakland and Alameda County millions of dollars in debt from its arena renovations, the team also must shell out $1.2 million in legal fees, according to Oakland City Attorney Barbara Parker.

Oakland, Alameda County and the Joint Powers Authority approved a settlement Friday over the legal fees and costs associated with litigating the case.

After the city and county issued $140 million in bonds to finance the 1996 renovations at the arena, the Warriors made annual payments toward the debt under a contract that required them to continue paying off the bonds even if the contract to play at the arena was “terminated.”

When the team left the arena for San Francisco’s Chase Center in 2019, attorneys for the Warriors argued they had not “terminated” the contract, but rather exercised an option in the agreement to leave.

The issue took a long road through the court system. An arbitrator, a California Superior Court Judge and a state appeals court all ruled the Warriors must pay the debt owed, and in December, the California Supreme Court ruled the same by denying the Warriors’ appeal of the previous decision.

At the time, the Warriors owed approximately $50 million on the debt.

“Finally, the Warriors have agreed to start paying their debts,” Parker said in a statement issued by her office. “Their years of dodging their responsibilities are over. Now it is past time for them to start repaying the local governments that spent years fulfilling their part of the agreement to renovate the arena and support the team. This is a down payment and we look forward to the Warriors fully satisfying their obligations to their former home — and their loyal fans.”

The announcement comes on the same day the Oakland-alameda County Coliseum Authority, the body that oversees the coliseum and arena, voted to release $20 million — $10 million each for Oakland and Alameda County — that had been sitting in a reserve fund set up by the authority in case the courts ruled in the Warriors’ favor.

The city and county had each paid into that fund to satisfy the debt service until the courts had made a decision, but with the final order for the Warriors to pay off the debt service, that money will be distributed back to each public entity.

City leaders have celebrated the legal and financial victory as a chance to put a dent in the city’s budget shortfall, which Oakland’s finance director estimated in December would be $62 million, if the city did not start to cut the budget, which it has since done.

City Administrator Ed Reiskin in December directed $29 million in cuts, including deferring pay raises for nonunion employees, laying off part-time and temporary employees, reducing overtime for police and firefighters and enacting a hiring freeze.