Politics & Government

SC City Council May Shoot For Warriors D-League Team Tuesday Night

The deal could lose the city $625,000 at the most, a staff report says. On the flip side, it could gain "long-term economic improvement."

Pro basketball could be coming to Santa Cruz as early as November, if the city council takes its staff's recommendations Tuesday night and launches them toward the hoop.

As with anything in Santa Cruz, nothing is a slam dunk.

However, in more than a month of study, both the staff and a blue ribbon committee appointed by Mayor Don Lane have said that the benefits outweigh the risks and building the only tent in the country to house basketball could be a giant win for the city.

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The Blue Ribbon Commission, made up of six community members was unanimous in recommending the city go forward, because of "a reduction in financial risks from the initial deal terms including multiple Warriors financial guarantees, use of one-time, “non-General Fund” proceeds that would be repaid, the sound loan terms, and the potential to trigger long-term economic improvement to the community."

They also agreed that the location, midway between downtown and the Beach Boardwalk, could help link the two destinations, something that has been a problem the city has long wanted to solve to keep more tourist money here.

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At the center of the deal is a $3 million loan from the city to the Warriors, who would bring the D-League team from North Dakota to a spot at 140 Front Street, in a parking lot behind Wheel Works.

The Warriors would be required to pay the loan back at a rate of $250,000 a year for the first five years of the agreement. The lease is only for five years with an opportunity to extend and build a permanent structure at the site if all works. The Warriors will pay $133,000 a year rent starting in year three, and there are options to continue for seven years.

The Warriors and the city will split any shortfall after five years and the city will get all of the profits from concessions at the 25 games held there during the season that stretches from November to April.

The deal could start in November with a six-month temporary permit, but would need a more extensive environmental review to continue.

There are plenty of pitfalls to be worked out in an offer that sprouted quickly April 10. The stadium will need use permits and environmental review. There are economic deals that have to be worked out, such as how much the Warriors will pay toward the $3.5 million construction costs; how much the city will have to pay the Seaside Company, which owns the lot; how much will noise and traffic affect the area.

The city staff scaled back initial plans to operate the venue for concerts and events, favoring instead to start by letting the Warriors control what goes in there, with an option that the city will save some dates and pick up more later.


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