SBJ/April 27 - May 3, 1998/No Topic Name

49ers balk at stadium financing

The city of San Francisco has simple message for its professional football team: Show us the money – or risk losing the chance to host the 2003 Super Bowl.

At issue is how the Edward J. DeBartolo Corp., which owns the San Francisco 49ers, plans to pay for its share of a proposed $525 million stadium-mall project to be built adjacent to Candlestick Park, the team’s current home. City voters agreed by a narrow margin last year to pay $100 million of the projects’s cost, with the balance to be privately funded by the 49ers and Arlington, VA – based Mills Corp., a developer of outlet malls.

Although the Debartolo Corp., has made verbal commitments to move forward with the project and the 49ers have spent at least $7 million on ore-development work, the city has not been told how or when the $425 million in private financing will be raised, said Kofi Bonner, the city’s main negotiator on the project.

"We need to be assured that before we go to bond there is going to be money on the other side of the table," Bonner said.

If the issue is not resolved by the end of the year, Bonner said, the project will be in jeopardy of missing the deadline for completion required by the NFL.

Bill Duffy, 49ers’ chief financial officer, said the team was looking at ways to reduce the project’s cost, and that cost and revenue projections "have to match up" before the team takes steps to line up financing. Duffy said he did not know how much longer the cost analysis would take.

The league has awarded San Francisco the 2003 Super Bowl on the condition that it be played in a new stadium, said John Marks, president of the San Francisco Convention and Visitors Bureau and co-chair of the San Francisco Super Bowl host committee. The league wants the stadium to operate at least two full seasons before that Super Bowl, Marks said.

"There is a certain measure of doubt in the minds of the NFL at this point about the ability to meet a schedule to allow a season to be played in 2001 in time for a Super Bowl in 2003," Marks said. "Obviously there has to be some resolve within the 49er ownership scenario."

That scenario became muddled last December when it was revealed that 49er co-owner Eddie Debartolo was the target of a federal criminal investigation in Louisiana, prompting DeBartolo to step down both as team chairman and as a director and officer of the team’s parent company. DeBartolo’s sister, Denise DeBartolo York, took over as chairman of the team. It has been reported in recent months that a power struggle between the siblings could jeopardize the stadium project.

Bonner said that resolving ownership of the company and team isn’t as important for the stadium project as a firm financial commitment from the 49ers’ side of the table. Any further delay could throw the project off a schedule that calls for groundbreaking in the fall of 1999, he said.

Work apparently also has ground to a halt on the design front. Jim Morton, project director at NBBJ Sports Entertainment & Architecture, said the firm was asked to halt work on the project after completing a schematic design – but before starting on detailed design and construction design plans. DeBartolo Corp, declined to comment.

Edward Vinson, group vice president of development for the Mills Corp., said the company is committed to spending about $200 million to build the mall and the 49ers and city are expected to pick up the tab for the stadium. However, he added, as "lead" developer of the project, the 49ers must be ready to proceed before the Mill Corp. can proceed.

Vinson noted that although the stadium was originally estimated to cost $325 million, it is his understanding that more recent cost estimates came in higher than that by $50 million to $100 million.

"I know that presently they {the Edward J. DeBartolo Corp.} are uncomfortable with the numbers," Vinson said.

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