Dear Santa Clarans,
The 49ers' "We're-writing-our-own" ballot measure arrived at the City Clerk's office earlier this morning. This is only the "intent-to-file" stage - but there's enough in it, we feel, to be of serious concern to Santa Clara's voters. By the numbers:
Section 2.A.1 Generate new revenues for Santa Clara?
- The pathetic Fixed Ground Rent of $8M (TOTAL! Over 40 years!) comes nowhere close to covering the $67,000,000 General Fund LOSS that the stadium will cause. (Ref. 1)
- It will certainly never make up for the upfront stadium subsidy of $114,000,000. (Ref 2)
Section 2.A.2. Create New Jobs?:
- The last construction worker will walk off the job in the year 2014 - but we'll be paying interest and coupon for that poor job creation through the year 2053. For the money "in", the job creation "out" is miserable.
Section 2.A.3. Provide Taxpayer Protections?:
- We really don't think so. How does squandering $114,000,000 in "corporate welfare" to the 49ers really 'protect taxpayers'? How does a $67,000,000 LOSS to the General Fund 'protect taxpayers'?
Section 2.A.4. Generate Community Funding?:
- The Stadium Subsidizers are giving you only half of the "schools story". The TRUE story is: The City, the County and the Santa Clara Valley Water District LOSE $17.3 million in order to generate that "schools funding." (Ref. 3)
- Bad stadium funding scheme = bad schools funding scheme. Unfortunately, that's the "New Math."
If some "plan" to subsidize a $1,000,000,000 NFL stadium requires your RDA to stop paying your General Fund what it owes, then that stadium DOES rip off your General Fund.
Registered voters in the City of Santa Clara: You'll be asked in the coming months for your signature on petitions barely originated by Santa Clarans - but surely paid for by the San Francisco 49ers themselves.
Santa Clara Plays Fair asks only this of our fellow Santa Clarans: Please consider who's really behind this "initiative" - and who's really paying for it. Urge your neighbors to be skeptical, too. Don't settle for hazy claims and glib promises - the four bullets above should make clear what this "49ers-own" ballot measure is really all about.
And please bear in mind that this measure has been thrust at us for one reason only: To prevent any legal challenges to the badly deficient Environmental Impact Report, or EIR, that came before the Planning Commission on November 18th and before the City Council on December 8th.
That EIR certainly isn't going to be in any better shape by the time we finally see some sort of "project" some eight or nine months from now.
Thanks for your support, and best regards,
Bill Bailey, Treasurer
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Ref. 1: CITY COUNCIL - City Staff's Term Sheet Presentation, 6/2/2009 (SLIDE #48)
Ref. 2: CITY COUNCIL - Term Sheet, Exhibit 7, 6/2/2009
Ref. 3: CITY COUNCIL - Agenda Report on Tax Benefits, 6/2/2009 (Page 5)
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3 comments:
I think we in Santa Clara SHOULD consider putting the stadium here. IF...
San Francisco, the 49ers, and or its boosters pay 100% of the costs;
and,
they are called from henceforth the Santa Clara 49ers.
San Francisco wants to keep the team local and reap the benefits associated with being a "real city" which needs a football team, but they want to foist the costs and headaches of a new stadium onto Santa Clara residents.
And they give all the empty promises that have been found out, the hard way, not to ring true. There are not the new jobs or tax revenues people promise when they get tax payers to agree to pay for these nice shiny new digs.
Can you help me understand how you arrived at some of your numbers?
- The pathetic Fixed Ground Rent of $8M (TOTAL! Over 40 years!)
In the Term Sheet the Ground Lease appears to pay total $34,300,000 over 40 years to the City (more if a 2nd team plays at the stadium)
- $67,000,000 General Fund LOSS that the stadium will cause.
How does that happen?
The parts of the deal that are red flags for me are:
1) If the Stadium Authority (SA) falls short of the $330MM construction contribution from Seat Licenses, Naming Rights, etc - who fills in the gap?
2) 49ers "advances". The Mello-Roos Bonds (hotel tax) and the RDA funds are capped so the 49ers are "advancing" $20MM and $12MM respectively. The team gets a generous interest rate for advancing the funds. I perceive that as offensive. The team is getting tax money to build the stadium but since some of the cash is not on hand yet, they're "advancing it" and being paid interest on that. Weak.
To Thomas:
ALL of those numbers were arrived at by City Staff and the consultants to whom we've paid nearly $2,000,000 these last two years. They were presented to City Council in public session:
http://santaclaraca.gov/index.aspx?page=1359
Please go to the June 2 City Council Agenda Reports for the Term Sheet, and open up "Exhibit 7" - the $8M figure is honestly reported by City Staff themselves on the very first line. "Honestly," because Staff reports the return OVER FORTY YEARS in 2009 dollars. And note that it's NOT $8M a year, but $8M over ** 40 years ** .
On that same June 2 Term Sheet, open up the link "Staff Powerpoint Presentation regarding Stadium Project Term Sheet", and page down to slide #48. Note that building a stadium yields to our City's General Fund a return of $31M over the lease term - but that NOT building a stadium yields $98,000,000!
That General Fund "bleed" of $67,000,000 is caused directly by the stadium - first, because after issuing stadium bonds, the RDA can no longer honor its "Cooperation Agreement" payments to the City, and second, because of the SB 211 amendment we'll need in order for the RDA to issue those bonds.
As for your two “red flags”, I can only agree with you:
We can't get ANY information about the Stadium Authority because the 49ers and the City Council are hiding behind the Confidentiality Agreement of April, 2007. But my own guess is that, if the SA can't raise what it's supposed to raise for the stadium's construction, it will have to borrow money or issue still more bonds.
And I agree with you that the interest payments should make this so-called "deal" immediately suspect:
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Note from the Term Sheet (June 2, Exhibit 5, Section 7.4(c) ) that the interest rate is the lower of Corporate BB bonds or ** 8.5% **.
Since when is our RDA required to turn its tax increment into an ATM for the Yorks and the 49ers?
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Thanks for asking,
Bill Bailey, Treasurer
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