Saturday, September 26, 2009

The 49ers Stadium WILL raid the General Fund!

Santa Clarans,

During our visit to Sacramento on September 9th to voice our opposition to Senate Bill 43, we happened to expose yet another "Stadium Subsidy Myth".

Stadium Spenders have apparently given up on that throwaway line, "No New Taxes" - but they've unfortunately put a falsehood in its place: Before the Senate Committee on Local Government, one stadium supporter actually stated - falsely - that the stadium won't affect Santa Clara's General Fund.

Nothing could be further from the truth - a 49ers stadium in Santa Clara WILL raid Santa Clara's General Fund, and it will do so in two ways:

1. The RDA has previously bought land from the City, and it is paying the General Fund back for it. That payback agreement is referred to as the "Cooperation Agreement". However, if the Redevelopment Agency issues construction bonds for a stadium, RDA proceeds will have to be diverted away from paying back our General Fund and toward paying off those stadium bonds. The result is less proceeds to our General Fund, compared to what we would see if we never built an NFL stadium.

2. In order to issue those stadium bonds, the Redevelopment Agency - which is our current City Council - must pass an SB 211 amendment which will divert even more RDA passthroughs away from the General Fund. The cost to the City, the County and the Valley Water District was estimated at over $17M over the term of the bonds:
(See page 5 of 5.)

To see the true impact of a subsidized stadium on our General Fund, please see:

...and page down to slide 48-of-55.

  • Over the long term, the Net Present Value of building NO STADIUM AT ALL is a $98 million increase to our General Fund.
  • Actually building a stadium REDUCES this to $31 million.

And settling for $67,000,000 less in our General Fund than we're entitled to?

on June 2nd, our City Council approved exactly that when they voted 5-2 to accept the Term Sheet "as-is".

Santa Clarans, the City's General Fund was running a deficit of at least $5 million for the fiscal year just ended, and this deficit is only expected to grow in years to come. Subsidizing a one-billion-dollar stadium for the San Francisco 49ers doesn't help that situation. It makes it worse.

So, when someone falsely claims that a stadium won't affect our City's General Fund - the fund through which we pay our police officers, firefighters and librarians - you will always be able to point to the truth above...

...and it's in the City's own Agenda Reports.

Thanks for all of your support,
Bill Bailey, Treasurer
Santa Clara Plays Fair