The Golden State Warriors basketball franchise has announced plans to relocate to San Francisco in 2017, a move that will leave their current landlords in Oakland still facing bond payments on the team’s current home.
The National Basketball Association team has an agreement with Oakland and Alameda County to contribute up to $7.4 million towards debt service on $140 million of bonds sold in 1996 to refurbish what is now known as the Oracle Arena in an effort to entice the team to stay.
The lease revenue bonds sold by the Oakland-Alameda County Coliseum Authority mature in 2026 and $53.9 million of the debt is still outstanding, according to the city’s most recent audited financial statements.
For their part, the Warriors agreed to pay up to $7.4 million from premium seating revenues to help cover the cost of debt service on the variable-rate bonds.
The authority sold the bonds with the expectation the team would play basketball in the arena for 20 years starting with the 1997 to 1998 season, according to city documents.
However, just last week the team announced plans to build an arena on the San Francisco waterfront.
The Warriors owners said the team’s lease ends in 2017, which is when they plan to have the arena ready for a move across the Bay.
The bonds are also secured by a letter of credit from the Bank of New York, the California State Teachers’ Retirement System and Allied Irish Bank until July 25, 2012.
The city and county are responsible for bond payments in the event revenues fall short, according to bond documents.
