Warriors should stop trying to push off debt onto taxpayers
As the Golden State Warriors open the season tonight at their new $1.4 billion arena in San Francisco, they’re turning out to be sore losers across the bay trying to stick taxpayers with the team’s $56 million debt.
That’s how much is still owed to retire bonds the city of Oakland and county of Alameda issued back in 1996 to finance renovations the team wanted as a condition of staying at the Coliseum Arena.
The bonds were to be repaid over 30 years. The team has tried to claim that, when it left town, it could also walk away from the debt. An arbitrator has said no. A San Francisco Superior Court judge has said no. Now the team is taking the case to the state Court of Appeal.
So much for the team’s promotion of its efforts over the years to give back to the community. In the end, for the team owners, venture capitalist Joe Lacob and film producer and UC Regent Peter Guber, it’s apparently all about the dollar — even when it’s not rightly theirs.
The team’s dispute with the city and county comes down to the terms of a 1996 agreement that requires the team to cover the debt, after other arena profits, even if it “terminates” its agreement to remain in the Coliseum — as it now has.
The Warriors claim that they didn’t actually terminate the deal; they merely failed to exercise their option to renew it. But an arbitrator and a judge have both rejected that hairsplitting argument, saying the team’s action was a form of termination.
Moreover, the jurists said, the history of the deal, which of course was reviewed in great detail at the costly arbitration, showed that public officials were explicit when the deal was struck about their intent that taxpayers not be stuck with the tab.
Back then, the team was owned by Chris Cowan, who clearly understood the agreement’s terms and the intent. When he sold the Warriors to Lacob and Guber, he fully disclosed the obligation. Yet now they’re trying to weasel out of the debt on a twice-rejected legal ploy.
The team is now worth an estimated $3.5 billion, nearly eight times the $450 million sale price nine years ago. To be sure, Lacob and Guber deserve credit for building a winning team. But trying to stick it to the very communities, fans and taxpayers who backed the Warriors all those years is reprehensible.
Every dollar the team withholds is money that could be used to provide public services, like street repairs, help for the homeless and social services for the poor. On top of the disputed debt, the city and county have had to spend over $800,000 on legal costs trying to protect the taxpayers, for which the Warriors are now legally on the hook.
It’s time for the Warriors to do the honorable thing. Show respect for the community they left behind and pay the debt. Demonstrate to the Bay Area that in court, as well as on the court, they can lose with dignity.