Many onlookers say Chase Center, the new home of the Golden State Warriors as it opens play Thursday in the 2019-20 NBA season in San Francisco, will set a benchmark for arena construction in the U.S., with its versatile design and technological advancements.
For taxpayer advocates, the facility is more important for another reason – it’s the rare major sports venue that is privately funded.
The construction cost for the Chase Center and surrounding improvements is about $1.6 billion. This includes a facility that is designed to host both basketball games and concerts, as well as a theater design to host smaller events, Tim Newcomb at Forbes notes. The facility is on the waterfront in the Mission Bay neighborhood and owners also created a new community park beside it.
The Warriors shouldn’t sweat that nine-figure bill because they have a plan in place that will recoup that money, Neil deMause, who writes about corporate cronyism in sports venues at Field of Schemes, calculates.
To help pay for it all, the Warriors are charging season ticketholders an extra $15,000 to $20,000 per seat (on top of the actual ticket costs). A Warriors official told The Athletic that about 80 percent of current season ticketholders haven’t balked at the membership fees and agreed to pay the tab. The article noted that Chase will pay $20 million annually for the naming rights, which will help foot the bill.
The team will collect $700 million for just the membership fees and naming rights alone over 30 years, not counting other various revenue streams that include actual tickets, parking, concessions, television revenue – just to name a few, deMause points out.
Of course, taxpayers are footing the bill for infrastructure improvements – they can’t ever seem to get a break on that. Light-rail service has been extended to Chase Center at a cost of about $62 million. At least the Warriors are contributing $19 million to that bill.
“This is a massive undertaking, and my chief concern is how much money the arena will really generate for the city to pay this back,” Art Torres, a member of the Municipal Transportation Agency board, told San Francisco Chronicle.
Still, taxpayers won’t take it on the chin in San Francisco like they’ve been forced to in many other cities, including Las Vegas, where an increased lodging tax will be a major revenue generator for the $2 billion Reliant Stadium, future home of the NFL’s Raiders. Taxpayers will fund $750 million of that cost through the tourist tax in addition to many millions more in infrastructure improvements.
Can the Warriors expected success be duplicated elsewhere? DeMause isn’t as optimistic about that.
“Thanks to the crazy San Francisco market, it may well be the exception to the rule that most sports venues don’t even pay their own construction costs,” he writes.
It’s also not necessary to spend $1 billion or more on a sports facility. Owners should scale back these monstrosities if they can’t fund them out of their own pockets rather than raid the pockets of taxpayers.