49ers, City Of Santa Clara Reach Agreement For $937M Stadium

Proposed $937M 49ers Stadium Would Be Publicly Owned By Stadium Authority

The 49ers have reached an agreement with the city of Santa Clara on a term sheet for a new $937M stadium. The agreement still must be approved by the Santa Clara City Council and a vote of Santa Clara residents before the project can move forward. The facility would be publicly owned by a stadium authority, and Santa Clara would retain ownership of the land. The financial framework limits the city's investment to $79M, with no new taxes, no cost to Santa Clara residents and no money from its general fund. A $35M investment in the stadium would come from a fee charged to overnight guests at hotels near the stadium site, while the remainder of the cost will be covered by the 49ers, the NFL and stadium authority project revenues, including naming rights (49ers). The SILICON VALLEY/SAN JOSE BUSINESS JOURNAL's Katherine Conrad reported the plan is "expected to be discussed Tuesday at a special meeting" of the Santa Clara City Council at 7:00pm PT. Santa Clara City Manager Jennifer Sparacino said that whether the 49ers will purchase California's Great America theme park from Cedar Fair Entertainment Co. is "still under consideration, but not an issue the city is tackling" (BIZJOURNALS.com, 5/29).

MORE DETAILS: In San Jose, Mike Swift reported in a front-page piece the agreement would require $114M in public money, "almost 50[%] less than the two sides had earlier considered." Santa Clara City Council member Dom Caserta: "We didn't get tapped into the 49ers, and their history, and getting Super Bowls here and all that. We were methodical, we took our time and we pushed hard. And we got everything we wanted and more." Swift noted the stadium is "now slated to open in 2014, two years later than initially planned." Under the proposed deal, the 49ers and the NFL "would provide a combined" $493M, 53% of the project's cost, though 49ers officials "would not discuss how that contribution would be divided with the league." 49ers officials said that the "bottom line is that the team is accepting all of the risk." 49ers CFO Larry MacNeil: "The city's contribution at $79[M] is fixed. Ours is not. ... Why do we like this deal? Largely because it's one of the best sites in the Bay Area for a stadium. ... The existence of traffic infrastructure, and public transportation at this site, is really key for an NFL stadium." Also, the stadium authority would have to be "successful in booking college football games, international soccer matches, concerts and other non-NFL events," as a "majority of the rent Santa Clara's general fund would receive from the stadium is 'performance-based' during the first decade of the 40-year deal" (SAN JOSE MERCURY NEWS, 5/30).

GOOD DEAL FOR CITY: In S.F., John Cote noted the 49ers under the deal "would cover the cost of game-day law enforcement, any construction cost overruns, operating cost [losses] and front the city $12[M] for the redevelopment fund if needed." Santa Clara Mayor Patricia Mahan: "It's a great deal. This is an investment to get repaid. I do believe this is absolutely the best deal the city could have possibly negotiated." Meanwhile, approval of the deal by Santa Clara voters "could mark the death knell for San Francisco Mayor Gavin Newsom's efforts to keep the team in the city with a new stadium as the centerpiece of a revitalized Hunters Point Naval Shipyard" (S.F. CHRONICLE, 5/30). Santa Clara city consultant Keyser Marston Associates indicated that the stadium "would create 515 permanent full-time equivalent jobs and $41[M] a year in economic activity," and that "doesn't include 1,350 construction jobs the 49ers say would be created while the 68,500-seat venue is built, starting in 2012" (SAN JOSE MERCURY NEWS, 5/31).

REVIEW FROM ALL ANGLES: A SAN JOSE MERCURY NEWS editorial stated the public investment in the project is "far less than what was on the table a year ago and well under the amounts other cities have spent to win an NFL franchise," though direct investment is "just part of what voters need to evaluate." The editorial: "The financial challenge for a football stadium is vastly greater than for a [MLB] stadium. ... The 49ers would play only eight regular-season games and two or three exhibition games in Santa Clara every year, leaving the stadium available for some 350 days. Santa Clara officials and voters need to understand how the stadium would be operated during that time to cover its costs and ideally turn a profit. ... The success of the partnership will hinge on the city's and 49ers' ability to maintain the same level of professionalism that has brought the negotiations this far" (SAN JOSE MERCURY NEWS, 5/31).

Writer Says Santa Clara An Unlikely Home For Raiders, But Should Keep Option Open

WHAT ABOUT THE RAIDERS? In Oakland, Monte Poole writes, "Though neither the Raiders nor the 49ers will go broke without a new stadium, neither is positioned to stay with the rest of the NFL." An owner's obligation is to "remove sentiment from the equation and replace it with the necessities of running a successful business." Santa Clara is an "unlikely Raiders home for 100 reasons, the most significant being that it's not Oakland." But the Raiders' lease at Oakland-Alameda County Coliseum is "up after the 2010 season, after which they have three options." They can "agree to a short-term extension, which seems almost certain." The Raiders also could "agree to a long-term extension" or "move elsewhere." But the "first and most reasonable option would keep open the Santa Clara alternative" (OAKLAND TRIBUNE, 6/1).