With a 2017 opening lost due to increasing scrutiny and the threat of SF’s waterfront height restrictions proposition hanging over the Warriors’ arena project, many news sources, starting with SF Weekly, revealed today that the Warriors are completing a deal to purchase a parcel in Mission Bay from cloud computing giant Salesforce.com. The arena is expected to open in time for the NBA’s 2018-19 season.
Salesforce bought the 14 acre parcel at the corner of Third Street and 16th Street in 2010 for $278 million, an outlandish sum even for San Francisco. Soon, the company released plans for a new campus that eventually would’ve held nearly 2 million square feet of office space. As recently as last month, UCSF was in talks with Salesforce to acquire an adjacent parcel, which happens to be across the street from the bulk of UCSF’s Mission Bay campus. The sale price of the arena property wasn’t available, but with the spiraling costs of the waterfront site making it potentially cost-prohibitive, Mission Bay looks like a decent site given its availability. That availability became clear when Salesforce signed its own deal two weeks ago to occupy half of the massive Transbay Tower, which is currently under construction. Soon Salesforce will have its own “campus” within a few blocks of very dense SoMa, a pretty impressive feat of consolidation within a major city.
The arena site doesn’t have the picturesque Bay Bridge views of Piers 30/32. Neither is it downtown nor close to BART (30+ minute walk from Powell or 16th Street Mission stations). However, it is right along the the Third Street Muni line, which by 2019 will have a more direct BART link to the arena thanks to the Central Subway. Plenty of parking has already been built near the arena site, including over 2,400 spaces in two garages within a block.
Just as important, the site isn’t subject to the alphabet soup of regulatory agencies that rule over Bay Area waterfront land, such as the BCDC and SLC. Being a block away makes all the difference in the world. And since the land isn’t on the waterfront, it’s exempt from the likely-to-be-passed Proposition B, the initiative that seeks to have tall developments along the SF waterfront subject to a vote – ballot box planning to the extreme.
There will still need to be an EIR written and certified for the arena project, but that’s nothing compared to the waterfront process. Prior to Prop B, I thought that the arena could be done if SF Mayor Ed Lee used up some political capital to see through his legacy project. When the initiative was cleared for this year’s primary, the writing was on the wall. The Giants saw it too, because Prop B threatens their large development across from AT&T Park. Any leverage that the Giants had regarding sharing the arena with the W’s is gone, now that the Giants have to deal with potential legal challenges throughout the development process and at the ballot box. Should Prop B pass and be legally upheld, the Giants stand to lose a few hundred million against the potential of their China Basin/Mission Rock plans.
Should he get this built, Joe Lacob will deserve many accolades. He gave the waterfront a good effort for nearly two years and had an alternative at the ready if he felt the need to cut bait. He inserted himself into the Howard Terminal discussion, showing interest in buying the A’s and building a stadium on the Oakland waterfront. He even managed to get the Port of Oakland and local developers to get excited about a waterfront arena, even though Lacob had not shown any specific interest in one. They got so excited that the ENA signed three weeks ago allows land to be conveyed to a team other than the A’s. Meanwhile, Lacob did the Salesforce deal away from the spotlight. That’s a classic smokescreen, well executed by Lacob. Now I don’t doubt that Lacob would enter the bidding for the A’s if they were available, but Lacob’s first job is to get the venue built for the team he currently owns. He got the land without early leaks, which have a tendency to invite speculation in the real estate market.
Going forward, I wonder if Salesforce is still tied into the arena via naming rights or another sponsorship deal. Once rivals with Oracle, they are now partners on a number of enterprise integration initiatives. Oracle’s naming rights deal expires in 2016, with the W’s expected to leave after the following year. The big target for Salesforce these days is SAP, who happen to have naming rights on some arena in downtown San Jose.