The Truth about the 49ers' Luxury Boxes

Santa Clarans,

On the evening of June 7, we learned that our costs to subsidize the San Francisco 49ers are going to increase greatly before we even see a stadium finance plan next summer.

But the most jaw-dropping part of the evening's meeting came in one of the 49ers' own presentations before Council.  The team's representatives actually claimed that their contribution to the stadium's "development" was their costs for their own luxury boxes in that stadium!

Please note from the "Stadium Term Sheet", Section 11.2b, that ALL luxury box income for NFL events goes directly to the 49ers themselves - not to any Santa Clara City Agency.  Not only that:  The 49ers collect even their base luxury box fees for non-NFL events as well.  (You'll find exactly this language in your Sample Ballots of June 8, 2010, too - Measure J gives that luxury box dough only to the 49ers.)

This is worth noting because of the media coverage this weekend concerning the team's sale of those luxury suite leases.  At the same time that the 49ers are putting $138 million into their own pockets, they're forcing the Santa Clara Stadium Authority pay the PSL* marketer's fee of $6,000,000 - with interest.  See here and here, Section 7b.

What the San Francisco 49ers raked in this weekend compensates them many times over for any 'development' costs they may have spent on their luxury boxes.  But that isn't news, and it doesn't help Santa Clara's Agencies to raise a single penny for the stadium subsidy itself.

The real news is how much the 49ers will taking out of the stadium - and how little will be left for Santa Clara and for Santa Clarans.

Thanks for your support,

William F. "Bill" Bailey, Treasurer,

SantaClaraPlaysFair.org

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*Let's call them by their correct name:  They are indeed Personal Seat Licenses.

Same as they were in Oakland.

49ers' Stadium Subsidy Ticker: Over Four Years of Secrecy - And For What?

Santa Clarans,

Imagine that your city had loads of empty hundred-acre parcels.  Imagine that it's thinking about locating an arena somewhere within its city limits.  Imagine that the actual location is not yet determined.

Our elected leaders would seek to reduce to a minimum the public costs of the land, but the only way they can do that is to shield the ground lease negotiations from the rampant speculation which would drive up the costs to us taxpayers.

The Ralph M. Brown Act rightly allows an elected body to take negotiations over real estate - and personnel matters and bargaining-unit negotiations - into closed session in order to get the best deal for taxpayers.  No one claiming to advocate "taxpayer value" could sensibly argue otherwise.

But now I'm going to pop that balloon. 

If you look at our own City Council Agenda of May 1, 2007, you will see virtually the same wording as you'd see if you looked at the Agenda of two weeks ago. **   For over four years now, we have known exactly who the participants are.

But far more important:  We've always known exactly which five land parcels are involved and where they're located.

The ultimate costs of the 49ers' stadium subsidies to Santa Clara residents, then, are far more dependent upon the giveaways awarded by our City Council's "stadium boosters" than they ever will be on the base costs of the land.  Our "partners" aren't even a public corporation, in fact, but are the super-secretive San Francisco 49ers. 

Now, consider:  At the Council meeting of June 7th, we were finally told not only that our RDA will be taking cash advances from the 49ers and paying them back at up to 8.5% interest - but that our Santa Clara Stadium Authority will now be doing the same thing.  Both agencies will be paying far more money to the 49ers to service that debt than they would with any bonds they could issue.  In the case of the RDA, they'll be paying for it out of your tax increment money.

In fact, the costs of the massive 49ers' stadium subsidy to Santa Clarans are about to be greatly increased.

As taxpayers, the giveaways to the San Francisco 49ers are indeed our business.  However, the Closed Sessions of the Santa Clara City Council give the clearest indication that the 49ers don't want us finding out about these cost increases until it's way too late to do anything about them. 

If the secret, Closed Sessions of our City Council and our Agencies are in fact merely being held to conceal the increasing indebtedness of our Santa Clara Stadium Authority from us taxpayers, then they have no place in the All-American City. 

Santa Clarans who contacted City Hall before the June 14th Council Meeting were entirely right to do so.  Thank you all for speaking up.

In fact, the Councilman who went completely off-Agenda on June 14th in order to criticize your correspondence may have revealed a bit more about this entire process than he intended. 

Please.  Stay informed on the 49ers' stadium subsidy. 

Demand more.

Thanks for your support,

Bill Bailey, Treasurer,

Santa Clara Plays Fair.org 

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Annotated Brown Act - brochure from 2003.  Dated, perhaps - but then again, something like the Brown Act probably shouldn't change much anyway.

** I mentioned the June 14th meeting on purpose - because it was "Not Held."   When we count up the number of Closed Sessions, we specifically exclude dates such as June 14th.  We count only the meetings that were actually held.  June 14th doesn't count.

May 10th, May 24th and June 7th, however, do count.  The total of secret, Closed Session Council/Agency meetings is indeed 91 as of this evening.  Really.

49ers' Stadium Subsidies: Putting the Stadium Authority's $1.5M in Perspective

Dear Santa Clarans,


Press coverage in today's Mercury News put quite a bit of ink on what the City Council would be paying itself to sit on the Santa Clara Stadium Authority.  However, that may not be the big story.

The additional $1,440 bucks a year per Councilmember works out to thirty bucks each for 48 meetings - the critical portions of which are likely to be held in secret Closed Session, thereby concealing the true functioning of the Santa Clara Stadium Authority from Santa Clarans.  We should be far angrier about that than about the dollar amount.

Let's set a few more decimal points:

1. From the June 7th City Council meeting, we learned that Santa Clara's subsidy of the San Francisco 49ers' stadium is now likely to be far more than the $444,000,000 we were originally led to believe.
2. Not one but two city agencies, the Stadium Authority as well as the Redevelopment Agency, will now be on the hook for high-interest cash advances from the 49ers themselves.  Can't issue your own bonds at 5.75%?  No sweat - borrow the dough from the 49ers at up to 8.5%.  The 49ers can use that cash flow to pay for the construction cost overruns they promised us they'd cover out of their own pockets.
3. Take the $950,000 that the Stadium Authority will pay to lawyers and accountants in the coming fiscal year, and add it to the $2,800,000 in RDA money that our city has already spent.  It's likely that we'll blow four million on those costs before a single shovel breaks ground.  That's tax increment money, by the way - property taxes essentially unremitted.
4. The $550,000 for City Staff can be added to the $612K in staff expenses we know of so far.  That latter amount is only a partial accounting, so we can probably count on those expenses easily exceeding $1.2 million.

Finally, bear in mind that this Stadium Authority budget is your money.  Recall that the City Council "parked" $4,000,000 in RDA cash with the 49ers Stadium Company while playing that old game of "RDA keepaway" with Governor Brown.  This $1.5 million should be coming back, and in fact, the remaining $2.5M should be put back in the accounts of Agencies our leaders told us were there to protect our interests.

The increased stipend to City Councilmembers should be noted, of course, as well as the cut they took earlier this season - but the costs of subsidizing the San Francisco 49ers are about to balloon for far different reasons.

That's the real news.


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

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49ers' Stadium Subsidy Ticker: Secret Meetings and RDA Cash , Too!

Dear Santa Clarans,


In late April of 2007, the San Francisco 49ers demanded that our City Council sign the "Confidentiality Agreement" with the team. This agreement forced our Council and Agencies to take certain dealings with the 49ers into Closed Session, out of the view of Santa Clara residents. The Closed Sessions are indicated, but not detailed, in the "Action Summaries" here.

Also, over roughly that same interval, the Redevelopment Agency has paid RDA cash to consultants on everything from the Feasibility Study to the Term Sheet - and now for the Disposition and Development Agreement, or DDA. A summary of those payments and to whom they have been made is here.

Santa Clara Plays Fair continues to track both the count of the secret Council/49er meetings, and the cash paid for "Stadium Studies." As of this date:

90: The number of secret, Closed Sessions that our City Council has held with the San Francisco 49ers and Cedar Fair since 5/1/2007.

$2,800,000: The total of RDA cash spent on 49ers consultants since 4/3/2007.

We'll publish this ticker periodically to keep Santa Clarans informed of the costs of the 49ers' stadium subsidy - both in dollars and in transparency.


Best regards,
Bill Bailey, Treasurer,
Santa Clara Plays Fair

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The 49ers' Subsidies and the Two-Team Myth

The rash claim over two NFL teams in Santa Clara appears to be making the rounds in our city yet again.

The myth: "We're getting two NFL teams in Santa Clara."

Busted: Santa Clarans, you will get two NFL teams in Santa Clara ONLY if Jed York says you do.

Please remember that if you voted for Measure J last June, you handed the right of sublease to any second NFL team strictly to Jed York himself. NO Santa Clara Agency, and not one single elected official in our city, has the power to contract with any second NFL team. Only the 49ers and their goods-marketing brigades will be allowed to do that. Even if they do: The 49ers - and not our Santa Clara Stadium Authority - collect the lion's share of the money from that sublease.

The proof is in Section 16.1 of the Term Sheet.

You will find that the 49ers front office desperately needs to blame their own stadium financing problems on the NFL players they just locked out. However, that's just not going to work: For two years running, the NFL Commissioner himself has made quite clear that any NFL contribution to a Bay Area stadium will be to ONE Bay Area stadium, and not to two of them. As the San Francisco 49ers and the Oakland Raiders are in the bottom six of revenue producers in the NFL (see here), the other thirty millionaire owners are probably not very sympathetic to the Yorks - and certainly not to Al Davis. Putting the league off on this issue is another example of the 49ers' front office shooting themselves in the foot.

But in a broader sense, the "stadium boosters" - on and off of the City Council dais - might want to be real careful with their wildly inaccurate claims about any second team in Santa Clara.

They might finally be asked: "If you really think you're getting TWO NFL Millionaires in our city...

"...why are you demanding that Santa Clarans pay $444,000,000 to subsidize those TWO NFL Millionaires when the two of them together could obviously afford to build and operate their own stadium with NO public subsidy?"



Thanks for all of your support,
Bill Bailey, Treasure,
SantaClaraPlaysFair.org

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Why the 49ers' Term Sheet rips us off

The 49ers' Stadium Subsidies: Truth as a Casualty - Part II

Dear Santa Clarans,


After public comments on a motion before City Council, the Council gets the last word with their own comments.

There's no rebuttal to those - even if they contain distortions or even untrue statements.

Last Monday night, March 21st, Councilwoman Patricia Mahan claimed that the San Francisco 49ers paid for "half" of the infrastructure costs of the Tasman Drive/Centennial Way area. She made a similar claim at the Muslim Community Association debates of May 16th, 2010.

We believe that this claim is as untrue today as it was then. On page 3 of the original Training Center Escrow Agreement of February 12th, 1987, you will find that:

• Santa Clara ALONE paid to build Centennial Way.
  

• Santa Clara ALONE paid to connect all utilities up to the front steps of the 49ers' Training Center.

Extracts of that lease are here. A concise summary may be found here, too.

We're entitled to far more truth on this "sweetheart lease" than we got last Monday evening. If we can't get it from the dais of our own City Council on this issue, we're in serious trouble.

Santa Clara Plays Fair urges our fellow residents to ask questions - hard questions - when "stadium boosters" make unsupportable claims for the massive stadium subsidy.

Especially when they do so in City Council Chambers.


Thanks for all of your support,

Bill Bailey, Treasurer,
Santa Clara Plays Fair

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49ers' Stadium Subsidy Ticker: Secret Meetings and RDA Cash

Dear Santa Clarans,


In late April of 2007, the San Francisco 49ers demanded that our City Council sign the "Confidentiality Agreement" with the team. This agreement forced our Council and Agencies to take certain dealings with the 49ers into Closed Session, out of the view of Santa Clara residents. The Closed Sessions are indicated, but not detailed, in the "Action Summaries" here.

Also, over roughly that same interval, the Redevelopment Agency has paid RDA cash to consultants on everything from the Feasibility Study to the Term Sheet - and now for the Disposition and Development Agreement, or DDA. A summary of those payments and to whom they have been made is here.

Santa Clara Plays Fair continues to track both the count of the secret Council/49er meetings, and the cash paid for "Stadium Studies." As of this date:

88: Number of Closed Sessions, 49ers and Council, since 5/1/2007.

$2,800,000: Total of RDA cash spent on 49ers consultants since 4/3/2007.

We'll publish this ticker periodically to keep Santa Clarans informed of the costs of the 49ers' stadium subsidy - both in dollars and in transparency.


Best regards,
Bill Bailey, Treasurer, Santa Clara Plays Fair

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