The Golden State Warriors must pay off the estimated $40 million in remaining debt incurred by Oakland and Alameda County for renovations to Oracle Arena, an arbitrator has ruled.
A 1996 demolition and redesign of the arena’s interior cost about $150 million, to be paid over a 30-year period. Since then, the Oakland-Alameda County Coliseum Authority has collected an annual payment from the basketball team of $7.4 million to help pay off the debt.
But the Warriors are departing for San Francisco in 2019, and team leaders had planned to stop making payments at that time. Attorneys for the city and county argued the NBA champions were trying to “scuttle” the remaining debt, and both sides agreed to let an arbitrator make the final call.
“We are pleased by today’s ruling and believe that it’s the Warriors, not the Oakland and Alameda County taxpayers, who should repay this debt,” Coliseum Authority Chair and Alameda County Supervisor Nate Miley said in a statement. “We issued these bonds in 1996 in collaboration with the team and with an agreement in place. We’ve simply asked the Warriors to honor their agreement.”
The dispute came down to the interpretation of a 1996 contract signed by the Warriors and the Coliseum Authority — the joint powers entity created to finance and manage the sports complex that’s also home to the A’s and Raiders.
Essentially, the disagreement was over the sides’ interpretation of the word “terminates.” The paragraph at issue says that if the Warriors terminate the agreement prior to 2027, they are obligated to pay the outstanding project debt.
In a court filing, attorneys hired by the team said that clause would apply only if the Warriors were actually terminating the contract. Rather, they said, they are allowing the agreement to expire in June 2019, as they depart for San Francisco.