Pricey Muni stop highlights the public cost of a our new “privately financed” arena

For those of us who follow the San Francisco arena developments closely, this recent article from Matier and Ross came as no surprise.

It turns out that the Muni Metro platform that is going to be installed at the arena is coming in over budget and the agency is asking for the city of San Francisco to pay for it.

A predictable pattern

Looking at the summary from the article, it’s clear that the initial cost proposal was way too low. In 2015, during the planning and approval phase of the arena, the new Muni stop cost was estimated at $27 million. $19 million of that cost was expected to be covered by the Warriors organization with the remainder supposedly coming from the “transit fund”, which would eventually covered by ticket surcharges.

But guess what? It’s a project in San Francisco. Cost overruns and scheduling delays are an expected event in these projects, not some out-of-the-blue issue that crops up without a contingency plan.

Well, actually... the Warriors did have a contingency plan and it was to leave the City of San Francisco holding the bag.

But before we dive into the root cause of this situation, let’s just quickly summarize the project and why it was necessary.

Although we may not think of it much, the infrastructure required to move all of us and our goods around is significant. That’s why regional agencies identify certain areas for high growth, or heavy activities like a stadium. In their push to move the team to San Francisco, the Warriors abandoned the existing infrastructure — in more than one way — and pushed into a part of the City that is hard to get to, and isn’t all that well served by transit.

Rather than building on an area served by transit, Golden State ended up settling on the Mission Bay area. Which is just close enough to existing facilities to seem reasonable, but does indeed require a fair amount of system expansion. So Muni is working to expand the existing stop (which is essentially a raised concrete platform as shown at the top of this article) at the cost of around $33 million, but there’s more:

...Muni has to realign the tracks that serve the stop, and that will require modifying nearby streets. All of which will add $18 million to the bill.

That’s $51 million, or about $160,000 per foot of platform.

But wait — that’s not all. Muni will spend an additional $11 million for new Metro cars, bringing the total cost of setting up light-rail service to the arena to $62 million.

Now, obviously the Warriors aren’t in charge of construction, but what they have done is structure their deal so that they don’t have to cover any of this.

Traffic mitigation measures that didn’t go far enough

In the most basic terms, the project impact review process works like this: the impact report summarizes the identified impacts, all of which are categorized as “significant” or not. Then the project proponent (i.e. the developer) must include mitigation measures - policies, procedures, and investments designed to reduce or remove these identified impacts “to the maximum extent feasible.”

The Chase Arena lawsuit brought up traffic, but I could never tell if this specific issue was one of their points. In the planning world, “deferred mitigation” is a catch-all phrase used to describe measures that are proposed at a later date, and it is one of the ways that opponents often challenge a project’s impacts.

At the arena, traffic is going to be an absolute nightmare. Just ask anyone that has lived, worked or traveled through the arena area — it already sucks and adding in another 20,000 or so people is going to make it even worse.

Normally, project proponents would have to provide mitigation if there is a “reasonable nexus” between the project and the identified impact. But you can imagine that for a project on the scale of Chase arena the costs begin to quickly spiral

To get around this, there are a number of improvements proposed - from an expanded underground subway line, to additional transit capacity (such as the one we are discussing here). Normally, a project applicant would pay for most of this, but the Warriors got away with a “transit fund” that will eventually serve as a coffer for various transit improvements in the arena area.

The only issue? They aren’t using their own money. Instead Golden State managed to put this on fans, proposing a ticketing fee that will be charged to all attendees at Chase arena.

And guess what? That fund doesn’t start accruing money until us fans start seeing Warriors games in San Francisco and paying our money into it. Until then, the transit fund is empty. Leaving Muni and the City of San Francisco scrambling to cover the ballooning construction costs.

While Muni and the City of San Francisco were planning on expanding their systems anyways, the arena development is putting pressure to add capacity faster than normal. Depending on who you ask, the Warriors were either very smart, or very devious in getting this deferred mitigation accepted.

While they will continue to wage a broad-spectrum PR battle, I just hope that we fans and local citizens understand exactly what Joe Lacob means when he talks about his “privately financed” stadium.