An arbitrator has ruled against the Golden State Warriors in a dispute over Oracle Arena debt, leaving about $40 million to the team once it departs the venue.
The Warriors are in the midst of what is expected to be their final season at Oakland’s Oracle Arena, as they are on track to open the currently under-construction Chase Center in San Francisco in time for the 2019-20 NBA season. Leading up to their impending departure, the Warriors and Oracle Arena owner Oakland-Alameda County Coliseum Authority have been in dispute over which side will be on the hook for outstanding renovation debt when the team vacates the facility.
In 1996, the Warriors committed to a 20-year lease that featured $150 million in renovations to the arena that were to be paid off over a 30 year-period (the Warriors extended that lease). Under that arrangement, the team was to pay toward the debt annually and assume remaining debt if it terminated the lease, and the termination language was where the two sides were at odds. While the Warriors believed that it applied only to an early end of the original 1996 agreement, the authority contended that the Warriors would be responsible for the debt if they left Oracle Arena at any time before it was paid off.
In a ruling issued on Monday, arbitrator Rebecca Westerfield sided with the authority, meaning that the Warriors will be on the hook for an estimated $40 million in debt once they leave the venue. More from The Mercury News:
“This was an after-the-fact attempt by the Warriors to rewrite the parties’ deal, and it would have left the people of Oakland and Alameda County holding the bag,” said Daniel Purcell, a partner Keker, Van Nest & Peters, which represented the city and county. “We are grateful that the arbitrator saw it our way.”
In a statement, the Warriors said the team disagreed with Westerfield’s interpretation of the license agreement with the Coliseum authority.
“Of course we are reviewing our options at this time, but as we’ve always said, we will fulfill any debt obligations that we owe,” the team said.
The debt is currently estimated at about $55 million, but it should be around $40 million once the Warriors leave Oracle Arena. Under the terms of the agreement, the Warriors have paid $7.5 million annually toward the debt. The Warriors will be allowed to pay off the current debt incrementally until 2027.
RELATED STORIES: Warriors, Authority Still in Dispute Over Oracle Arena Debt; Warriors, Authority Disagree Over Oracle Arena Debt; Future of Oracle Arena Still Uncertain; Warriors Hit With 67% Oracle Arena Rent Increase