Santa Cruz will have its first professional basketball team and the first basketball arena housed in a canvas tent in the U.S.
After threats of a lawsuit looked like the city council voted Wednesday night to approve a $5.4 million building for the Developmental League franchise of the Golden State Warriors.
The team is set to play in a 33,000 square foot tent-covered arena that holds 2,950 for basketball or as many as 4,000 for other events. The season is scheduled to begin Dec. 23.
"I'm excited by this," said Councilman Ryan Coonerty, who made a motion to accept the team's proposal that was approved unanimously, with Tony Madrigal absent. "I think it will be a good project and we will address issues as they come up."
The first issue that came up was a threat of a lawsuit filed by Beach Hill neighborhood residents, whose homes look down on the arena from the hill that divides downtown from the Beach Boardwalk. They were worried about parking, noise and traffic.
A letter from the group's out-of-town lawyers stopped the public hearing that was scheduled for Tuesday. It was rescheduled after study by the city's staff for Wednesday, and residents packed the council chambers.
The city made changes requested by the neighborhood group, including providing permit parking in the neighborhood, adding parking staff to the area during games and dropping live electric music concerts. The city would also black out big arena events during all summer weekends.
While there won't be concerts, there could be youth basketball, roller derby, lacrosse, volleyball and UCSC sports games. The city council will meet again with Beach Hill residents in six months to check on the effects of traffic, noise and parking.
Warriors' President Jim Weyermann promised to have parking attendants spread throughout the area directing cars away from Beach Hill and toward downtown lots. The team will also provide parking directions and maps to people when they buy tickets, directing them away from the immediate neighborhood.
The neighbors, although not happy with more traffic in the area, softened their opposition.
"Despite what may have appeared as a threat I don't think any of the items we've asked for in a whole series of meetings that have gone on with several members of the council is a deal killer," said George Webber, representing the Beach Hill Association, which filed a letter threatening a lawsuit during Tuesday's meeting.
"We aren't deal killers. We like basketball. We are already people who suffer the negative effects of tourism."
During the week the council received 145 emails favoring the proposal, 23 against it and 12 that were neutral, according to City Clerk Bren Lehr. Those who spoke in the public hearing were mixed, but passionate either way.
"I really want this to pass," said Santa Cruz High School basketball player Walker Nodine, 17. "The D-League players are role models. There aren't many opportunities around town for teenagers like me to do stuff that is safe, legal and informative."
John McEnery, the brother of former San Jose Mayor Tom McEnery, spoke against the proposal, saying that the team should pay for all of its expenses itself. Ironically, his brother shepherded the Sharks through an election in San Jose and then went to work for the team on its board of directors. The family owns downtown San Jose benefits that profited from the arena.
Others who spoke against the proposal's finances noted that 15 D-League teams have moved or gone out of business, lasting an average of only three years.
The Warriors Developmental League franchise has been based in Bismarck, North Dakota but wanted to move closer to its Bay Area franchise, which is in the process of moving from Oakland to San Francisco. The team has a website, a storefront on Pacific Avenue and T-shirts proclaiming the Santa Cruz Warriors.
The Warriors have been affiliated in the past with the Chicago Bulls, Washington Wizards and Memphis Grizzlies. The Wizards started in 1995 as part of the International Basketball Association based in the U.S. and Canada before joining the D-League in 2001.
The financial arrangements include a 15 year loan of $4.1 million from the city to the Warriors with 3 percent interest. The money comes from the city's Public Trust Fund, which is money set aside from building projects, and it is now earning 1 percent.
The loan will be paid off by seven years of $250,000 payments by the Warriors. They will prepay rent of $532,000 for four years ahead of time. And, all revenue from concessions and rentals to other people who want to use the arena will go to paying off the loan. The name of the stadium has been bought by Kaiser-Permanente for $750,000 for three years.
Some of the city's costs will be paid by a $1 fee on every ticket sold. County treasurer Fred Keeley said he figured that the city was only risking $500,000 in a worst case scenario, a risk that was worth the upside.
DevCon Construction will donate $100,000 toward construction costs.
The city will have the right to 30 free events a year and the Warriors will contribute $50,000 for signs. If the Warriors relocate during the seven years it must immediately pay back the loan.
If the team leaves after seven years and the city wants to get rid of the stadium, the team is responsible for paying for demolition.
The Warriors will lease the building from the city and the city will rent the land from the Seaside Co. Seaside will relocate 122 parking spaces for its employees to the third floor of the Front Street garage from which they will shuttle the employees to work. Another 35 spaces used by UCSC students will be moved to a city lot.
"I know this feels rushed to some people," said councilmember Coonerty. "But the point was made that it might take this long to get a house permitted. It's not the length of this project that is the problem. It's the length of how long it gets to get a house permitted. If it's a year, that's a problem."
Said Mayor Don Lane: "We've answered some questions and solved some problems."
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