When San Francisco Mayor Ed Lee announced eighteen months ago that the Golden State Warriors would be leaving Oakland and relocating to his city, the team’s owners acted as if the move was a done deal. Billionaire co-owners Joe Lacob and Peter Guber were confident that their plan for a new waterfront arena in San Francisco would be completed in time for the 2017-18 NBA season. But they suffered a serious blow last week when San Francisco voters overwhelmingly rejected another waterfront development proposal that shared striking similarities. Indeed, the decisive defeat of that other proposal effectively dooms the Warriors’ plans for a waterfront home in San Francisco. As such, the team’s owners should rethink their options in Oakland — where opposition to a new arena likely will be much less intense.
Lacob, a partner in the Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers, and Guber, an entertainment mogul and part owner of the Los Angeles Dodgers, seem to be sensing the problems they face in San Francisco. Earlier this week, they unveiled a revised proposal for their arena development in an effort to mute opposition to it. The new scaled-down plan would increase the amount of open space in the project and would shrink the height of the arena from 135 feet to 125 feet in the center and 110 feet along the edges of the facility. The owners obviously realize that the other waterfront proposal — a condo development planned for nearby — sparked an intense backlash because of its proposed height: 136 feet.
But former San Francisco Mayor Art Agnos, one of the leading opponents of the Warriors’ plan, called the revised proposal “window dressing,” according to the San Francisco Chronicle. Agnos, who also spearheaded the successful campaign against the other development, noted that the Warriors’ proposal still includes two hotel towers that would rise to 105 feet on the waterfront, along with a luxury condo tower that would reach 175 feet — nearly 40 feet higher than the condo development that city voters just turned down. “The bottom line is that this is a mega real estate project,” Agnos said of the Warriors’ plan.
Lacob and Guber say they need the revenue that the condo tower and the hotels would generate in order to finance the new arena. But San Franciscans, as last week’s election proved, are not keen on the idea of tall buildings constructed along the water. Opponents of the waterfront project that was defeated last week, known as 8 Washington, labeled it a “wall on the waterfront.” And former city attorney Louise Renne argued that the project looked like it belonged in Miami Beach rather than San Francisco. Ultimately, 8 Washington lost 38 percent to 62 percent on Election Day.
San Francisco voters also didn’t like the fact that 8 Washington would have catered mostly to the wealthy. Some of the condos were slated to sell for up to $5 million, sparking accusations that the project was merely a playground for the rich. And the Warriors’ proposal likely will suffer the same fate — Lacob and Guber’s proposed condo tower is expected to fetch premium prices. As a result, their project will probably fall victim to the same populist backlash — a backlash that promises to intensify following last week’s disclosure that the initial public stock offering by San Francisco-based Twitter had created at least 1,600 new millionaires.
And while Lacob and Guber surely are counting on San Francisco wealth to make their project pencil out, their chances of getting voters to approve a giant real estate deal on the waterfront that is essentially no different from — and perhaps even more objectionable than — the one they just rejected seems remote.
The Warriors’ longtime home city of Oakland, by contrast, presents no such problems. Oakland not only is moving forward with its Coliseum City project, which now includes deep-pocketed investors who have expressed interest in financing it, but the city also has waterfront land to offer — if that’s what Lacob and Guber prefer. In fact, the Howard Terminal, at the Port of Oakland, which the city is pushing as a possible location for a new ballpark for the A’s, is big enough to accommodate the Warriors’ needs as well. At 51 acres, the site could easily fit both a new ballpark and a new arena.
Moreover, the adjacent Jack London district offers plenty of room for real estate redevelopment. In fact, Oakland, because of its intense need for economic growth, is much less likely to turn down a waterfront real estate development than San Francisco is. Plus, Oakland is currently suffering from a serious housing shortage — as rent and housing prices have skyrocketed in the past year — thereby creating the demand needed to finance a deal that would help Lacob and Guber pay for a new arena.
Of course, Oakland isn’t going to suddenly become a playground for the rich; the Warriors aren’t going to fetch $5 million for a condo in Jack London. But Oakland has several advantages over San Francisco — namely, land, opportunity, and much less resistance.
Plus, it has the fans. Indeed, the Warriors’ fans in Oakland are and have been among the most loyal in the nation. Yes, the team is terrific now, and so Warriors’ tickets are a scarce commodity. But even when the team was horrible during the past two decades, fans routinely packed Oracle Arena. And during last year’s playoffs, the Warriors may have had the strongest home-court advantage in the league thanks to their diehard fans in Oakland — fans who may or may not decide to attend games in San Francisco.
Oakland, in short, is the better option for the Warriors, and it’s time that Lacob and Guber realized that fact.