Tuesday, December 18, 2007

If you lived here, you would be home by now


You know those real estate for sale signs that are on a busy commute route? The ones that say, "If you lived here, you would be home by now."

In October, we compared the 49ers' subsidy request to a much more modest request from Nanosolar, a solar energy company ($222,000,000 vs. $1,500,000.)

Today, the San Jose Mercury News reported that Nanosolar has shipped its first product.

The construction crews that built the factory have already been paid. Those full-time manufacturing jobs at Nanosolar are already on the books. The tax revenues are already rolling in.

Meanwhile, we've spent 1/3 of what Nanosolar wanted, just to study the 49ers' subsidy request.

We at Santa Clara Plays Fair do not favor public subsidies for any kind of private enterprise, but we would like to point out, for those who believe in such things, that there are better ways to go about it.

"If you subsidized green energy, you would be making money by now."

Wednesday, October 10, 2007

A tale of two subsidies

(These remarks were addressed to City Council at their meeting last night.)

--

My name is Au Nguyen. I am a Santa Clara resident.

This is a tale of two subsidies.

In June 2006, Nanosolar of Palo Alto went looking for a location to build their factory. This new factory would be huge. Nanosolar estimated that it “would nearly triple the nation's solar manufacturing capacity.” The Mercury News reported that San Francisco, San Jose, and Santa Clara were considered.

Nanosolar eventually chose San Jose.

Five months later, just after Election Day, the 49ers said they want to build a stadium in Santa Clara. The city hired consultants to study the proposal.

On Sunday, the Mercury News reported that San Jose gave Nanosolar a subsidy of $1.5 million.

The 49ers want a $222M subsidy. This is 150 times more than the amount that Nanosolar got from San Jose.

Nanosolar said their factory will employ “several hundred people.” (SJMN, June 21, 2006)

The 49ers say the stadium will employ “316 people.” (KMA report, June 1, 2007, page 12.)

Also on Sunday, Julie Patel of the Mercury News reported that the total cost of our feasibility study may be as much as half a million dollars.

With what we’re spending just to examine the 49ers’ subsidy request, we could have been a third of the way to subsidizing a solar energy company. The two subsidies would have created about the same number of jobs.

Why are we so willing to spend money on professional football but not solar energy?

--


Epilogue


I am not in favor of any public subsidy for private enterprise, whether the for-profit corporation makes solar panels or puts on football games. I just want to highlight this comparison because of the similar number of jobs that would be created and the vastly dissimilar amounts of the subsidies.

In fact, the City of Santa Clara has a website to promote our city as a great place to do business. It lists the "top 5 reasons to move to Santa Clara:

  1. Lower energy rates
  2. Lowest combined utility rates
  3. Speed-to-market
  4. Easy access and transportation
  5. Highly educated workforce
A subsidy is not listed.

Last night, City Manager Jennifer Sparacino said it best when she remarked (in discussion of an unrelated subject) that we "just want all to be treated fairly and equally, without special favors."

Tuesday, October 9, 2007

Back to School


















It's been almost three months since the City Council last had any public agenda item related to the San Francisco 49ers' request for the City of Santa Clara to contribute $222,000,000 in public funds for a football stadium (although it seems that they have been having plenty of closed-door meetings.)

Tonight, however, the proposal will be back in public session.

At this evening's meeting, the City Council will consider the request to spend an additional $185,000 in public money to continue to study this proposal.

In case you've lost track of the total to date, this new request will bring the total to an even $500,000. And of course that figure doesn't include all of the staff time that has also been spent on this proposal.

I'm certainly in favor of studying and research, but before continuing to spend any more money, the City Council needs to get back to the Guiding Principles it established for itself back in January.

One of those principles was a requirement that Cedar Fair agree that they will not assert business interference or negative effects from the feasibility studies and that this agreement needed to be in place "prior to pursuing discussions with the 49ers."

The City does not yet have that agreement.

So, the problem with spending money NOW on a feasibility study is that conditions may change by the time Cedar Fair is willing to agree to moving forward with a stadium without any reduction in their payments to the City or any City agency.

Therefore, we shouldn't be spending money on a study now. We should wait until Cedar Fair has agreed in writing to not assert their own business interests. When Cedar Fair does sign such an agreement -- then we can take up the question of whether additional public funds should be spent studying it.

And there's one more issue.

The cost estimates in the San Francisco 49ers' proposal were based on the City Council approving the project in July 2007.

So once we have Cedar Fair's approval, the City Council needs to ask the San Francisco 49ers to submit a revised construction budget.

Once those two pieces are in place, then and only then should we even consider spending more money studying this proposal. Financial conditions can change, and there's no point determining whether or not the July 2007 estimate is feasible, since we are already well past that approval date.

What can you do?:

1. Attend the City Council meeting on TONIGHT at 7pm and speak out! Speakers will probably be limited to 2 minutes each.

2. Call the Santa Clara City Council at

(408) 615-2250

3. Write a Letter to:

Patricia M. Mahan, Mayor
City Hall
1500 Warburton Avenue
Santa Clara, CA 95050

4. Send an email to:

mailto:MayorandCouncil@ci.santa-clara.ca.us?subject=Concerns%20about%20stadium%20proposal

5. Spread the word! Tell your neighbors and friends and encourage them to get involved!

Monday, September 17, 2007

Who really profits?

I initially posted this article "Who really profits?" on the Stadium Facts website back in July, and I think it worth re-publishing here while the City is considering the feasibility of contributing $222,000,000 and 15 acres of land to build a professional footbal stadium for the San Francisco 49ers.

The 49ers have been more than willing to talk about the potential economic benefits a stadium might have for Santa Clara and the surrounding region.

They haven't been quite so open about how they will benefit economically from that same new stadium.

Why not?

Well, it's probably because the value of their team will increase substantially if they get a new stadium — an immediate increase in value of somewhere between $250,000,000 and $700,000,000.

That's a much bigger increase than your average bathroom remodel.

How does the team's value increase?

Each year, Forbes magazine assesses the value of all 32 NFL teams. In their most recent list, the San Francisco 49ers are valued at $734 million — near the bottom of the pack (29th place.)

As Forbes states, this valuation is a reflection of the fact that "the 49ers have some of the lowest revenues in the league thanks to an antiquated stadium that features no club seating, and an onerous lease that forces the team to share concession, luxury-suite, naming-rights and signage revenue with the city."

A new stadium with a better revenue stream would increase the team's value. Could the new value go as high as $1.423 BILLION — Forbes' valuation of the Washington Redskins (and the team currently at the top of the list)? Maybe not. But it is certain that a new stadium with more favorable revenue stream would markedly increase the team's value.

Mike Swift at the San Jose Mercury News analyzed this very issue back in November 2006, shortly after the Santa Clara proposal was announced.

As he wrote in his article "Deluxe Stadium May Enrich 49ers"

. . . in many markets, a new stadium has produced a windfall for owners.

Patriots owner Robert Kraft paid $172 million for the team in 1994. Today, with the Patriots playing in a new suburban Boston stadium partly financed by the NFL, in a market with wealthy demographics like the Bay Area's, the franchise is valued by Forbes magazine at $1.2 billion. That is the second-highest among the four major sports (football, basketball, baseball and hockey), more valuable than even the storied New York Yankees.

By the way, it's worth noting that the new Patriots stadium (in Foxboro, MA, a town of about 16,000) was paid for ENTIRELY by the team's owner, Robert Kraft. [State taxpayers did finance about $75 million in infrastructure improvements, but the team is responsible for paying back that debt.]

As reporter David Copeland noted in his article "Patriots teach lesson about stadium financing",

By conventional "wisdom" for financing sports stadiums, Kraft should be crying poor. That conventional wisdom says that teams -- no matter what the sport -- can't possibly pay for a new stadium on their own and remain competitive.

The Patriots finished the regular season with an NFL-best 14-2 record. On top of that, Forbes magazine valued the team at $756 million [in 2003] -- in large part because of the new stadium -- up considerably from the $158 million Kraft paid for the Patriots in 1994.

We need to remember that professional sports are a big business, just like any other business, and the example of the New England Patriots is clear evidence that teams don't need public money to succeed.

Friday, September 14, 2007

We're at the Santa Clara Art & Wine Festival

Santa Clara Plays Fair will be in the Free Speech section of the Santa Clara Art & Wine Festival on September 15 and 16. Stop by and talk with us between 10:am and 5:pm.

Wednesday, September 12, 2007

Some notes on the Sep 05 Commonwealth Club panel

Mayor Mahan was outnumbered 3-to-1 by the panel on the 49ers at the Commonwealth Club. Former 49ers General Manager Carmen Policy was clear about his preference for San Francisco, and he said that the NFL would prefer the 49ers to remain in San Francisco. Foreshadowing? Insider knowledge?

The SF Redevelopment Agency's Michael Cohen, who is in charge of the Hunters Point development project, made a strong case for that area. He mentioned contacts between Newsome and John York and said that the hazardous clean-up was mostly a "red herring" because the place selected for a stadium is one of the cleanest areas of the old Navy facility.

Ann Killion deflated some of Mayor Mahan's arguments for Santa Clara as a site but admitted that she believed that the 49ers should always be a "San Francisco" team.

On the face of it, Mayor Mayan did make a good case for the Santa Clara location, but she provided some data (such as the number of "available" parking spaces in the area) and assertions (a dozen highway exits within one mile of the stadium site) that are easily disputed.

No current 49er principals were on the panel, but there were one or more in the audience. Listening to the audience and talking to a few afterwards, I believe the majority of people there supported retaining the 49ers in San Francisco.

Friday, August 31, 2007

Welcome!

We are a grass-roots coalition of Santa Clara citizens and interested organizations who oppose the City of Santa Clara's subsidy of a stadium for the San Francisco 49ers. We seek to prevent the use of public assets or indebtedness to build or operate a professional football stadium in the City of Santa Clara.

Our city has long deferred more important projects. We believe that Santa Clara should not tax its citizens, increase its debt, or allocate land or any other valuable assets to build a stadium.

Our concerns include:

Public expenditure of at least $287,000,000 in cash, property, and other assets. This equals to a per resident cost of over $2,500.

Less than 10% facility utilization: The stadium will be empty most days, earning no money for the city.

No Comparison Shopping The City's own consultants, Keyser Marston Associates, concluded in their report that a hypothetical office building would generate 5 times the fiscal benefits to Santa Clara, while requiring no subsidy from the taxpayers.

Little, if any, direct return on investment. Most economists and studies that have addressed this issue and most cities who have funded sports stadiums agree that there is little benefit and often adverse financial impacts in underwriting new stadiums.

Reduction in our municipal power reserve fund. Building on the proposed site would require the city to relocate or reconfigure an electrical substation on the property, an expense not required for utility needs. Spending $20,000,000 on this unnecessary project would reduce our municipal power reserve fund.