49ers' Stadium Subsidies: "Let's go on a spree with the city's credit cards!"

Dear Santa Clarans,

We're already getting some diversionary spin on the outlandish debt which five City Councilmembers and the 49ers want to pile on the Santa Clara Stadium Authority.  Let's look at two of them, one unimportant, but the other one vital to the fiscal health of our city.

The first bit attributes to our group some imagined false focus on the increase in the total construction costs of the 49ers' stadium.  Well, yeah, it has increased from $937,000,000 to $1,020,000,000 (That's $1.02 BILLION).  That's an unadjusted increase of about 9%, but (maybe) 2-4% in "June, 2010 Dollars".

For us, that's not the real story.

The real story is that second bit of pap:  The utterly false claim that the 49ers and the NFL are somehow contributing "revenues" for the stadium.  They are not.  They are instead heaping an additional $520,000,000 worth of loans onto the $330,000,000 already down to the Santa Clara Stadium Authority.

That's public debt, and it's public money.

This should never have happened.   But there is a hard number of true out-of-pocket 49ers' contribution that the team, the NFL and their financiers can't hide:  The 49ers sent us to the polls last June with their own bought-and-paid for 'citizens' initiative.'  At the time, they "estimated" that they would be contributing $493 million toward a one-billion-dollar stadium.

Eighteen months later, our "business partner" now wants to pay only $152 million - and they want a Santa Clara Agency to service $850,000,000 in debt for a stadium that only benefits the team and the NFL.

You're entitled to ask the question:  Why are the 49ers now paying only a mere 15% of the total costs of their stadium?

Why are they not paying the 53% they told us when we went to the polls last June?

Santa Clara Plays Fair urges our City Council to take this DDA back to the drawing board.  The 49ers should at least be paying for their own stadium themselves, if they insist upon grabbing up all of the NFL Revenues.

They also owe Santa Clara MUCH more in Fixed Rent payments to the City's General Fund - a miserable $180 THOUSAND in the first year is unacceptable.  

Finally, they should most certainly be turning exclusive control of the Second Team Sublease over to our own Stadium Authority.  They shouldn't be calling the shots on the Second Team - we should be.

The five 49ers' Stadium Boosters on our City Council are letting the San Francisco 49ers go on a spree with Santa Clara's credit cards.   That's simply not the answer - not for our city, and not for Santa Clarans.

Please:  Come to City Council Chambers this Tuesday evening, December 13, at 7:00 pm - and speak out against the outrageous stadium subsidy.

Demand more from the San Francisco 49ers.

Thanks for all of your support,
Bill Bailey, Treasurer


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Any materials you find here in the blogs of Santa Clara Plays Fair and Stadium Facts may be forwarded to anyone, anytime.

49ers' Stadium Subsidies: The 49ers get Cafeteria-style financing from Santa Clara

Dear Santa Clarans,



From Friday evening, you were given 96 hours to review the 421-page Draft DDA on the City's website.  We've gone through it as thoroughly as we can.  It's complex, but an analogy might help clear the air about what it really means:


You've engaged a partner to help build a new home.  Your business partner controls nearly all of the negotiations with the architect and the General Contractor, so your partner's design demands come first.


You also thought that you and your partner were going roughly "halves" on the total construction cost of $937,000.00, with $444,000 down to you and $493,000 down to your partner.


You now learn that the cost to build is now a million and change.


Worse, at the eleventh hour, your partner is shoving much more of his cost onto your $444,000 line of credit.  He has the unmitigated gall to tell you that, since he doesn't drive, and because he eats out and shaves at work, he isn't going to pay for the construction of the home's garage, kitchen or bathrooms.


So, after four years of dickering, your partner says that he's only liable for $152,000 of the cost of a $1,020,000 new home.  He expects you to pay the other $850,000 - and he still expects to take 30-minute showers, set the thermostat to 78 degrees and use your microwave oven and flat-panel TV.


Sound bad?  It gets worse:  Multiply the dollar amounts above by 1,000 and that is exactly what the San Francisco 49ers are doing to us right now.  What the 49ers are saying is, "We'll pay for the locker rooms and our Team Store - but we don't use the rest, so we're not going to pay for it."


We must have missed something.  The 49ers will take well over $130,000,000 out of that whole stadium every year - but they won't pay for the bleachers, seats or club lounges that paying fans will be using?  Consider the billions they will gross from a stadium we're paying for, and then ask yourself why the total net present value (NPV) of their payments over forty years into our city's General Fund remains at a mere $8 million.


What's even more pathetic than the lousy $8 million:  The five 49ers' Stadium Boosters on our elected City Council actually give every indication that they're going to agree to the 49ers' outlandish "cafeteria-style" financing - even though it's much worse than the 49ers' own Measure J from last June.


It should be clear now why the 49ers' "J" put no limit of any kind on Santa Clara Stadium Authority debt.


Santa Clarans, please demand more.  See the SCPF homepage for details on the Study Sessions this Tuesday and Thursday - and for contact information for Mayor Matthews and the City Council.  It is vital that you make your views on the massive stadium subsidy known.


Especially since that subsidy has more than doubled in eighteen months.


Not even Measure J justifies that.




Thanks for all of your support,
Bill Bailey, Treasurer


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Subsidizing the 49ers: That $10 million We Don't Have is just the Tip of the Iceberg

Dear Santa Clarans,

Very shortly, our City Council will have met behind closed doors with the San Francisco 49ers exactly ONE HUNDRED TIMES since May 1, 2007.

Publicly, however, there's been only four years' worth of total hype about the stadium's financing.  In early December, at least some preliminary Disposition and Development Agreement, or DDA, for the massive subsidy of the 49ers' stadium, will finally come before Council.  Can you residents, ratepayers and taxpayers attend some or all three of these meetings at City Hall, and speak out against the 49ers' Stadium Subsidy?:  

• Tuesday, December 6th, 2011:  "Council Committee of the Whole" Study Session I 
• Thursday, December 8th, 2011:  "Council Committee of the Whole" Study Session II 
• Tuesday, December 13th, 2011:  Public Hearing, City Council Meeting 

Time:  7:00 pm     Location:  City Council Chambers, 1500 Warburton Drive

Santa Clara Plays Fair urges Santa Clarans to attend as many of these meetings as possible - and to speak out.

So, what's a DDA, and what's a Term Sheet?

The DDA is the binding Development Agreement, which places massive amounts of public subsidies - and control over the stadium itself - in the hands of the 49ers.  The Term Sheet of June 2, 2009 is its predecessor document --- which gives away the store to the 49ers:

1.  The wretched Ground Lease with the City pays only $180 thousand the first year any stadium opens - but the 49ers will easily gross over $130 million in television rights and luxury box rents that same first year.  Not a penny of those "NFL Revenues" benefit our city or its agencies - it all goes into Jed York's pockets.

2.  We voted away any right to sublease to a 2nd NFL team - and we gave that exclusive right to Jed York and the 49ers.

3.  It's unlikely that the Santa Clara Stadium Authority can generate enough revenue to operate the 49ers' stadium for them year-round - so, on June 7th, City Staff acknowledged that the Stadium Authority will probably give up control of the stadium for six months of every year.  Calling the 49ers's stadium a "municipal stadium" is simply inaccurate - virtually every development we've seen since Measure Jed merely proves how little control we have over "our" stadium.

4.  We were assured that the team would be paying 'substantially' more than the pathetic $5 million a year that the Stadium Authority was supposed to get originally - but we won't know what the 49ers will be paying until the Study Session Agenda is issued, probably on Friday evening, December 2nd.

5.  The $10,000,000 in Stadium Authority money voted for "make-ready" work this last Tuesday?  The Stadium Authority does not even HAVE $10 million.  It may have most of the $4 million that it got from the RDA after our Council "parked" that four mil with the 49ers themselves - but the remaining $6 million will have to be borrowed from the 49ers themselves, with interest payable.  Make no mistake;  this is the start of a perpetual cycle of indebtedness for at least one Santa Clara agency.

It's become quite clear over the last seventeen months that the "deal" with the 49ers has only two purposes:  To saddle Santa Clara's agencies with all of the stadium debt - and to give the profits, power and control to Jed York and the 49ers.

If you can speak out on December 6th, 8th and 13th - will you tell our City's leaders that the 49ers are not paying nearly enough for their own stadium. ?  Public debt IS public money. 

Before they sign any legally binding "deal" with the San Francisco 49ers, the five 49ers fans seated on our City Council owe us Santa Clarans a much better deal that Measure Jed gave us over a year ago.

Nothing is stopping Council from fixing a horribly bad stadium deal - but they'll have to stand up to the San Francisco 49ers in order to do that. 



Thank you for all of your support, 

William F. "Bill" Bailey

Treasurer

1(877)703-4300 

Please visit our blogs at:
http://www.santaclaraplaysfair.blogspot.com/
http://stadiumfacts.blogspot.com/

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49ers' Stadium Subsidies: Sorry, they're not for you, Mark.

Dear Santa Clarans,

Gosh, will he or won't he?  Check out the pop press for the latest speculation on why Jed York will/won't agree to take on Mark Davis and the Oakland Raiders as his tenant.

That's the way the question should be phrased, because Jed York has far more power over the Raiders - and over Santa Clara - than any of us have over him.

The rule that never changes is a very straightforward one:  It's about the money, and it's never about the football. 

More than a few heirs of millionaire NFL team owners have learned that the hard way, as they've inherited fat assets with bare-bones cash accounts.  The children of Georgia Frontiere (St. Louis Rams) and Jack Kent Cooke (Washington Redskins) know exactly how this works.  They ended up selling controlling interests in their teams so that they could pay off inheritance tax bills for tens of millions of dollars that were due in mere months after the passing of the majority owner.

A Santa Clara stadium, with Jed York as his landlord, doesn't really solve that problem for Mark Davis.

Also, the subsidy that Santa Clarans are going into debt to pay?  It's up to at least $500,000,000 and will likely end up being much more than that.  Other than giving the Raiders a place to play, the subsidy - as well as that sublease - benefit the 49ers far more than it will ever benefit the Raiders.  Or us.

Note also that the 49ers will be making sure that any stadium they're in will be geared to market their brand - not Raiders jerseys.  The sale of NFL gear is big business, and all of the profits from those bobble-headed dolls go into the pockets of the 49ers (and not to a single Santa Clara agency).  It doesn't pay Jed York to have any brand-dilution going on in a stadium he controls.

Silly fan emotionalism doesn't mean a thing in any discussion of the Raiders' future (It certainly doesn't in any discussion of our futures).  When millionaire NFL team owners do that thing that they do, it may be an accidental sop to one fan constituency or another - but that is never the priority for the millionaire NFL team owners who are really calling the shots.

It's about the money.  Always is.




Thank you for all of your support,

Bill Bailey, Treasurer,

Santa Clara Plays Fair.org

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49ers' Stadium Subsidies: A Cult of Secrecy

Dear Santa Clarans,


This writer asked at the July 5 meeting of the City Council and Agencies that any dollar amounts taken in by the Santa Clara Stadium Authority in the sale of stadium Personal Seat Licenses, or PSLs, be public information.  Santa Clarans in Chambers that evening, plus television viewers on Channel 15, were told by City Staff that this is confidential information - even though those PSLs are being sold by a Santa Clara City Agency and not by the 49ers.

Some months ago, I asked in Chambers that the dollar amounts actually committed to in any Letters of Intent for the parking overlay on private lots be disclosed publicly.  Santa Clarans were denied that information also. But what was most disturbing on that occasion was that we were refused not by our own City Staff, but by Lisa Lang, VP of Communications for the San Francisco 49ers - who had no business even speaking for the Stadium Authority.

A few weeks ago, CalAware petitioned City Hall for the release of the public safety report for gameday security in a billion-dollar-stadium paid for mostly by us.

And they were refused.

(A correction  --- Neither CalAware nor the First Amendment Coalition were refused this report because they were not the ones who requested it.  But you can still follow the trail in the link above to find out just who that shy party was.  We might even find out why the source of the original request is mentioned virtually only in the last sentence.  Thanks to several members of Santa Clara Plays Fair for pointing this out.  -- BB, 10/11/2011)

This is a big deal.  After the shootings, beating and parking lot brawl at Candlestick Park on August 20th and September 18th, we as residents are absolutely entitled to know that, of 160 police officers handling a massive traffic jam of over 20,000 vehicles, some portion of them will be protecting members of the public, and in particular residents on the north side of our city.

The refusal of the Stadium Authority even to tell us how they're going to protect us during NFL events at a stadium we're paying for simply isn't acceptable.  The 49ers - and the NFL - have no business telling us what we can and cannot see.

The use of the Closed Sessions of our Council and our Agencies to conceal this as well as the true costs of the stadium subsidies from us is simply another nail in the coffin of open government.  We have a culture of secrecy that's rapidly becoming a cult.

Surely, the All-American City deserves much better. Will you please speak out?  Contact the Council directly .

Demand more.




Thanks for all of your support,

Bill Bailey, Treasurer

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49ers' Stadium Subsidies: Selling out Great America does not help Santa Clara

Dear Santa Clarans,

We can quickly put the sale of the Great America theme park to JMA Ventures in perspective.

The San Francisco 49ers are pulling the strings, of course, and they've solved their legal problems with Cedar Fair with a $70 million grease job.  But based on our city's treatment of Cedar Fair these last several years, I'm not surprised if CF is glad to be out from under the Great America theme park.

The upshot is this:  None of what happened today makes the 49ers stadium subsidies a better deal, or even a good deal, for Santa Clarans.  We're still down for what will probably be well over HALF A BILLION DOLLARS in corporate welfare for the 49ers.  We'll still be getting peanuts in return.

There are some other points to bear in mind.  The theme park still pays our city's General Fund of $5.3 million, minimum, every year.  Over the life of the proposed "give-away-the-store" stadium lease, the theme park will pay us TEN TIMES as much as the San Francisco 49ers ever will!  Whatever JMA - and the 49ers - are planning, we as residents should insist that the current lease continue to pay off at its current level.  Any renegotiated lease should be as good or better for our city - and NO development rights should be surrendered to JMA or to the 49ers.

However, based on the sweetheart deals that the Stadium Boosters on our City Council have already struck with the 49ers, both for the Training Center and for the stadium, any reasonable resident should be deeply suspicious of where the sellout of the Great America theme park is really going to take us.

Note also that the theme park lease requires that a recognized amusements firm be the actual operator of the park.  JMA and/or the San Francisco 49ers most certainly do not qualify.  They better have a plan for theme park operation by a third party, paid for by either or both of them and not by us.

In fact, in view of the beating and shootings at Candlestick Park on August 20th - and in view of the brawl in Candlestick's parking lot Monday Sunday evening - we should be drilling the 49ers hard on this one point alone.

After that:  There will be the care, upkeep and improvement of the theme park so that it continues to be a credit to our city's Entertainment District rather than a gamepiece for the 49ers.  Let's face it:  The 49ers aren't going to pay football dollars to keep up a theme park with returns far less than an NFL team - so look for the whining, givebacks and bad deals to begin shortly after the press buzz on today's sellout wears off.

JMA Ventures and the San Francisco 49ers really do owe Santa Clarans some solid answers.  The 49ers and their "stadium boosters" have spent close to three years whining that Cedar Fair stood in the way of "their" stadium, so it's going to be very interesting to see how this crowd rationalizes the 49ers' treatment of that same theme park.

If they and JMA let Great America degenerate to the condition that Candlestick Park is in today, we Santa Clarans are going to find ourselves in a lot of trouble.

Thanks for all of your support,

Bill Bailey, Treasurer,

SantaClaraPlaysFair.org

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Traffic, More Traffic and the Cooked Numbers behind the 49ers' EIR

Dear Santa Clarans,




It's taken nearly two years.  But someone is shining some bright lights on the completely insupportable claims that the San Francisco 49ers have made concerning the massive traffic jams and private-parking mess they'll be causing in Santa Clara.  If you can, pick up a copy of today's Sunday San Francisco Chronicle, and see: 


49ers' stadium plan stirs debate over parking 


The Stadium EIR was the perfect example of consultants telling a client just what they were paying to hear - but those cooked numbers did a great disservice to Santa Clara and to Santa Clarans.  Now, a real traffic analyst from Walnut Creek, Mr. Steve Abrams, has analyzed the 49ers' claims the way this should have been before the team ever presented their EIR.  He's done so at no cost to anyone.


The issue of the massive traffic jams on NFL game days - and the use of a 160-officer traffic force to manage about 20,000 private vehicle-trips - is rooted in one of the biggest howlers we heard in the fall of 2009:  The claim by the San Francisco 49ers that mass transit utilization would be 26% at a stadium here at the same time that it was less than 19% at Candlestick Park.


Keep in mind that CalTrain at the time was going through a severe financial crisis.  Only this March, before that crisis had abated somewhat, CalTrain was actually proposing to close College Park, Santa Clara and Lawrence Stations - the three stations closest to the proposed Santa Clara stadium site!**


Bye, bye, mass transit crowd.


If you have a moment, please give a fair reading to what Mr. Abrams has written about the 49ers' traffic jam plans.  The increase in private vehicles packing our streets north of U.S. 101 is not merely incremental - it will have a serious effect on the level of service, or LOS, at intersections which even the 49ers themselves were finally forced to acknowledge are already among the worst in our county.


As for the statement that the 49ers took the issue up "conservatively," and that the infrastructure here is "equal to or superior to any in the NFL," I'll simply refer everyone to this one figure from the 49ers own EIR.    I'll then ask, "If our infrastructure is as good as you're claiming, why are you closing four streets, barricading 31 intersections, and demanding identification from residents in the Agnews area as they try to return to their own homes?" 


Note that none of this is required at Candlestick Park today.  Note also that the 49ers will be reimbursing us only a portion of what game-day traffic management - and public safety - will actually be costing us.  In view of the shootings and the beating at Candlestick last weekend, we're entitled to ask hard questions on that second point alone.


At any rate, four years from now, let's ask Santa Clarans who make their homes in the Agnews and Lafayette corridors if the 49ers told the truth in 2009.


By then, of course, it will be way too late.


Santa Clarans, you have a stake in this wherever you reside in our city - but if you live north of U.S. 101, this will affect just about every aspect of your daily lives, both during the construction of a subsidized NFL stadium and in its operations after that.  Santa Clara Plays Fair urges all Santa Clarans to inform themselves on just what the stadium subsidy is truly costing all of us, and not just in dollars.


Please take a moment to share your concerns with the Mayor and City Council here, and contact Santa Clara Plays Fair anytime if you have questions about the EIR or about the stadium subsidy itself.




Thanks for your continuing support,

Bill Bailey, Treasurer

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Ref. available early 8/29/11:  http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/08/28/SPV81KRMCC.DTL

** Front page, San Jose Mercury News, Feb. 4, 2011

Comments by Santa Clara Plays Fair on the 49ers's Draft EIR of July, 2009

49ers' Stadium Subsidies: Our RDA is now the 49ers' ATM

Dear Santa Clarans,

It's about the Stadium.  Really.  It is.

When Council voted this evening to hand over to Sacramento, EVERY YEAR, ten percent of the property taxes generated in our Redevelopment Agency, we were told about the hardship that would ensue if we couldn't operate the RDA in perpetuity and force it to dispense cash to the San Francisco 49ers all along the way.

Yes, other projects are at stake.  But the real purpose of Council's actions this evening is to protect the ability of our RDA to borrow cash from the 49ers and pay it back at a rate of up to 8.5% a year - using our property tax dollars.

The use of public monies to subsidize a millionaire's private enterprise, in fact, makes Santa Clara's RDA a poster child for eliminating RDAs in California altogether, which our City Council and RDA were obviously unwilling to do.

The blather, frankly, began almost immediately after the RDA Giveaway this evening.  One of the more absurd claims I overheard was that we were wrong to oppose the "new" RDA - because the money comes back from Governor Brown, freshly laundered and folded, 'for schools and stuff.' 

Don't you believe it. 

Balancing the State Budget will never favor local schools.  If you really want to protect local schools:  Phase out redevelopment so that those property taxes can finally be disbursed the way they were originally intended to be shared.

It won't happen immediately.  But forcing the RDAs to pay off their debts and clock out would mean at least $10,000,000 per year into Santa Clara Unified Schools EVERY YEAR - far more than the pittance being passed through by the SB 211 amendment the Council passed for the 49ers in February  (To get an idea of the dollars involved, see the July page in your City Calendar.).

There's an even darker side of the precedent that our Council-and-RDA chose this evening, though:  Imagine that day in the very near future when the next Governor decides that $2.7 million a year out of our RDA is not enough for his budget shenanigans in Sacramento.   He demands $6 million per year instead.  What then? 

We could imagine an even worse scenario:  A State Legislature so addicted to those RDA dollars that it actually prohibits the dissolution of local agencies in order to keep our local property tax money flowing their way.  Think Sac politicians won't interfere still more in our local affairs?  They certainly did with SB 43.

What the Santa Clara City Council did this evening is foolish and dangerous on multiple levels.

But worse than that, it protects the interests of the San Francisco 49ers far more than it protects Santa Clarans.

Thanks for all of your support,

Bill Bailey, Treasurer

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49er's Stadium Subsidies: Property Taxes now Payable Directly to Sacramento

Dear Santa Clarans,


This Tuesday evening, the Stadium Boosters on our City Council will probably cave in - again - on the 49ers stadium subsidy.

It's likely that they'll agree to pay 10% of the North-of-Bayshore's property tax increment to Sacramento, year after year.  That's after paying Sacramento $11.2 million dollars upfront.   The City's own Council Agenda REPORT is here.

Terribly sorry.  But this is the price of keeping  the RDA alive so that it can continue to subsidize the San Francisco 49ers.

A short background:  On June 7th, we were told that the RDA could not afford to write stadium subsidy bonds, but that it would have to borrow cash from the 49ers themselves at a much higher rate of interest.  On June 14th, the city's Fiscal Year Budget for 2011-12 was approved, and it was admitted then that Redevelopment Agency property tax increment would probably be 8-3/4% less this year than last.

The issue documents for the RDA's 2011 Tax Allocation Bonds paint a more serious picture than that:  Our RDA will collect approximately ten percent less in tax increment in the coming year than it did last year.  So, you may expect $27 million in property tax revenues - not $30 million.

Now, we hear that 10% of $27 million, or $2.7 million PER YEAR, EVERY YEAR, is now payable directly to Sacramento, an unprecedented redirection of local property tax money.  This is being done simply so that the Stadium Boosters in our city can continue to pile stadium debt on both the RDA, and in particular, on the Santa Clara Stadium Authority.

If someone had told me five years ago that our city would reach a point at which real property taxes would go out the door to Sacramento - simply so that our city's Agencies could then assume hundreds of millions of dollars in debt for a millionaire's football palace - I simply would not have believed him.  No City Council, and no Redevelopment Agency, I would have replied, would ever lose that much perspective over the mere bragging rights to an NFL stadium.

That, however, is exactly where we are likely to be after Tuesday evening's City Council Meeting.

Please note that this is precisely the loss of RDA funds to Sacramento that the Stadium Boosters told us that Measure J would prevent. 

Santa Clarans, please speak out.  Speak up.  Tell the City Council how wrong they really are on this issue. 



All the best, and thank you for your ongoing support,
William F. "Bill" Bailey, Treasurer,
SantaClaraPlays Fair.org


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A fragment from the Agenda Report linked above:

"To fund the initial year remittance of $11,151,131 the following fund sources are available:

• Forgo 2011-12 deposit into the Housing Fund, which should yield about $6 million...
• Use 11-12 Net Tax Increment, which should yield about $2 million
• Finally, use unspent...discretionary 10% Housing Fund monies..."

3. Subsidizing the San Francisco 49ers, One Year Later: "Sign here! We'll tell you what it costs next year..."

Dear Santa Clarans, 

On June 7th, the "Committee of the Whole" Study Session report on the stadium subsidy was presented before our City Council: 

"The current estimate for the total costs for the development of the Stadium is approximately $950,000,000.  Approximately 15% to 25% of the development costs will relate to tenant improvements within the Stadium and will be paid by Stadco.  As further detailed below, the Stadium Authority will fund the remaining development costs from a variety of sources..."* 

Have we got that right?  Santa Clara Agencies are now down for up to $800,000,000 of the costs of “developing” a $1,000,000,000 stadium for the San Francisco 49ers? 

It should be clear, then, why Measure J itself contained no cap of any kind on Stadium Authority liabilities.  The 49ers' Stadium Booster crowd sold Measure J to us with their claims of General Fund integrity – claims since proven to be false – but they couldn’t afford to have Santa Clarans pulling back that curtain and finding out that the Stadium Authority would then be stuck with the stadium debt that the 49ers refused to take on themselves.

Shocker #2:  This very same "Committee of the Whole" report tells us that our city will be signing the binding Disposition and Development Agreement, or DDA, sometime this fall - with a complete stadium financing plan not even available to Santa Clarans until next summer!** 

“Sign here,” the 49ers are saying.  “We’ll tell you what it'll really cost you sometime next year.” 

If a used-car dealer tried saddling you with debt on those terms, you’d tell him to go jump in the lake.  Why is it acceptable for the San Francisco 49ers to do such a thing to our city?

Santa Clarans, please start asking questions about the massive stadium subsidy for the 49ers.  It’s much worse than we were told on June 8, 2010 - and the “Committee of the Whole” report from June 7, 2011, is the clearest admission of that.



All the best to you this Independence Day,

William F. “Bill” Bailey, Treasurer,

SantaClaraPlaysFair.org 

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  * Committee of the Whole Study Session REPORT, Page 5 of 10 ("Page | 4", middle)

** Committee of the Whole Study Session REPORT, Page 2 of 10 (Second page, bottom)

The following slide set was also presented in Chambers on June 7th, and it's very informative: 

     PowerPoint Slides, Staff Presentation:  POST MEETING MATERIAL

2. Subsidizing the San Francisco 49ers, One Year Later: How to Lose a "Municipal Stadium"

Dear Santa Clarans:


When the 49ers' paid "stadium boosters" wanted your vote on Measure J last June, they went through some tortured verbal gymnastics to persuade us that this stadium was somehow "ours."  Now, a year later, we can finally see how untruthful that really was. 

The City Council formed the Santa Clara Stadium Authority to own and run the stadium for the team - and to protect the interests of Santa Clarans in the stadium deal.  That Authority was originally charged with selling subsidy bonds to get the stadium built.  We were also told that the Authority would be getting the naming rights sold and the concessionaire agreements signed.

This city Agency is even stuck with selling the very same Personal Seat Licenses, or PSLs, that left behind such a stink in Oakland.

Now, we learn that the original foundation of the Santa Clara Stadium Authority is built on sand:   Not only is it exceedingly unlikely that the Santa Clara Stadium Authority can possibly raise the $330,000,000 needed for the stadium's construction - it's not even clear that the Authority could possibly operate a Santa Clara Stadium for the $20 million to $30 million every year that will cost.

In violation of the Term Sheet itself, the 49ers have even taken control of the naming rights negotiations.

In fact:  For the first time last Tuesday, we actually heard that the Stadium Authority - this same City Council - is planning on borrowing money from the 49ers just as the Redevelopment Agency will be forced to do.  Any such cash advance to the RDA will have to be paid back at an interest rate of up to 8.5% per annum.  Wait until we find out what the Stadium Authority will be charged for the loans it takes from the 49ers.

But it gets even worse:  The "solution" to our problems, apparently, is now a "triple-net" lease which puts the stadium under the control of the 49ers themselves six months out of the year - and which actually includes periodic options for the Stadium Authority to hand the stadium over to the team for the entire year, every year.

Back in February, Mayor Matthews actually tried calling the 49ers' stadium a "municipal stadium." 

Last Tuesday evening - almost exactly a year after Measure J - our city's elected officials admitted that it's no such thing. 

That's how you lose control of a "municipal stadium" - a stadium they told us was "ours."

Next:  "Sign here - we'll tell you how much you're paying sometime next year!"

Thanks for all of your support,

Bill Bailey, Treasurer,
Santa Clara Plays Fair.org 

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1. Subsidizing the San Francisco 49ers - One Year Later

Dear Santa Clarans:


It's been a year since less than one third of Santa Clara's registered voters passed Measure J.

So, how about that $444,000,000 stadium subsidy for the San Francisco 49ers?  Well, this is what we learned on Tuesday night in City Council Chambers:

The good news is that the RDA will probably be unable to write some $28,000,000 in bonds to subsidize the 49ers' stadium for them.  However, the bad news is that the RDA may well end up borrowing from the 49ers themselves more than $30,000,000 in order to meet just the $40,000,000 commitment we made to the team when we approved Measure J.

This does matter.  If you could sell bonds and service their debt at 5.75% - no guarantees on that, by the way - then why would you borrow cash at up to 8.5%?  Because Measure J locks you into doing exactly that.  It allows us virtually no relief in a poor economy that's hammering homeowners as well as their city governments.

Wasn't the SB 211 amendment supposed to fix this by extending the authority of the RDA so that it could write those "stadium bonds"?  Apparently, that didn't work - and now, there's no going back:  The losses to our city's General Fund, some $19,500,000 over time, cannot be reversed because the SB 211 amendment cannot be rescinded. 

Anyway, that's us:  We're not only stuck with General Fund losses due to the stadium subsidy - but the costs of capital to our Redevelopment Agency are probably going to be significantly increased.  As the RDA is now authorized to collect tax increment through 2027, there will be a lot of RDA money flowing into the pockets of the 49ers, improving their cash flow but not helping Santa Clarans or any of their public agencies.

Measure J virtually assured that our Redevelopment Agency would essentially be turned into an ATM for the 49ers.  The news out of City Hall on Tuesday evening just underlined that in red.

Next:  How to lose control of a "municipal stadium." 

Thanks for all of your support,

Bill Bailey, Treasurer,

Santa Clara Plays Fair.org

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The 49ers' Subsidies: "They're a bad idea, so let's do 'em anyway!"

Dear Santa Clarans,




We link to Neil deMause's "Field of Schemes" website from our homepage because the guy really gets it.  Today, with this essay, he proved that once again.

You'll see some brief but straight-on-point paragraphs on the inane waste of public money that goes into sports palaces - and the illogical thought processes of journalists and Councilmembers who think they understand the issue but who really don't:

• "When newspaper columnists (and, presumably, elected officials) are able to think to themselves, "Sure, virtually every economist agrees that public sports facilities are a terrible deal, but this is a public-private partnership, so that's a totally different thing!" then there's really no reasoning with them. And as recent events have shown, when people really want to believe in something, they have an amazing capacity for cognitive dissonance. "

If you're still under the illusion that subsidizing a stadium for the San Francisco 49ers in Santa Clara is any kind of 'public/private partnership':  Ask yourself why the 49ers will walk out the door with over $130,000,000 in broadcast, luxury box and club seat revenues the first year - and why our city's General Fund gets only a stinking $180 thousand.  That's what Measure J really does to our city.

The principle is the same here as it is for any arena in Sacramento - only here in Santa Clara, we'll pay many times more per capita for the exorbitantly overpriced entertainment being served up by the San Francisco 49ers.  That's a massive public subsidy of $444,000,000 - all so that we can get jobs paying less than $7,000 a year. 

We're blowing a lot of public wealth on nothing but bragging rights.  Santa Clara Plays Fair urges residents to demand more - much more - from this City Council and from the San Francisco 49ers.




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


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The 49ers' Subsidies and Truth-in-Borrowing

Dear Santa Clarans,


On April 19th, the City Council, Joint Financing Authority and Redevelopment Agency approved the sale of bonds for ten-some "refurbishment" projects in our city's North of Bayshore Redevelopment Area. It's anticipated that this bond sale will raise up to $35 million, and that at minimum, $25 million will go toward fixing stuff up - but that any remainder will go directly to subsidize the San Francisco 49ers.

You can see all of that here by clicking on "POST MEETING MATERIAL." The "refurbishment" means just that. NO new projects are in fact being constructed.

In fact, you'll find in this "carve-out" an unspecified sum for the "refurbishment" of a North Side Library not even yet built! The cost of building the North Side Library itself will be an additional $19.7 million. Not one shovel has turned any dirt for that Library, for the reason that our City's General Fund cannot afford the approximately $800K to $1M every year it will cost to pay librarians and to put books on its shelves.

In other words: There's enough in our General Fund to suffer $67 million in losses over time in order to subsidize the San Francisco 49ers - but not enough to hire a Trainer for our Senior Center and not enough for a fireworks display in Central Park this 4th of July (voted down at this same City Council meeting, in fact). There's not enough money to pay any additional Librarians - or to keep our Central Library open for the 64 hours a week it was open only one fiscal year ago.

Just as troubling: On April 19th, one of the bond consultants for the city acknowledged verbally that the 2003 Tax Allocation Bonds are being serviced at a cost to the RDA of about 5% per year - but that the 2011 'Refurbishment and Stadium Subsidy' Bonds will have a cap of 8.5%. This greatly increases our debt service costs - either to the RDA or to any successor Agency. That candid admission didn't make it into any of the written records I've examined.

In fact, this rather begs the question of what our Santa Clara Stadium Authority will face when it issues nearly four times this face amount in bonds. Some $120M to $150M in Stadium Authority paper must not only be insured - it will not even be tax-exempt.

We better pray that the 49ers get us some decent Naming Rights proceeds, even as they violate their own Term Sheet by doing so. In particular, we better pray that every last one of those Personal Seat Licenses, or PSLs, gets sold...

...at $5,000 to $20,000 apiece, by the way. Can you hear us, "stadium boosters"?

Anyway you slice it: Forty-Niners' stadium debt, paid for by Santa Clarans through their Agencies, is going to be a killer.



Thanks for your ongoing support,
Bill Bailey, Treasurer

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The 49ers' Stadium Subsidies: There are Naming Rights, then there are Naming Rights

Dear Santa Clarans,


Open up the stadium's Term Sheet and note from the last line of Section 7.3(b) on page 10:

• "Unless otherwise agreed by 49ers Stadium Company, Naming Rights Revenue will not include revenue from rights to name or sponsor components of the Stadium, or from advertising or promotional activites, all of which are included in the Team Revenue." [Emphasis mine.]
  

The Santa Clara Stadium Authority will be paying massive debt service as a part of its $330 million portion of the 49ers stadium subsidy. Yet, less than an hour ago, one of the 49ers own representatives tried to tell me that every cent from the sponsorship of the overall naming of a stadium in Santa Clara will flow into the Santa Clara Stadium Authority.

Really? Check out this evening's "Stadium Naming Rights Marketing Agreement," part 2.2:

• "The Parties acknowledge that Stadco and/or the Team may also separately retain the Naming Rights Broker to perform sponsorship brokerage services for Stadco and/or the Team."

If they use that same broker - and the "halo effect" of the overall stadium naming rights - in order to inflate the naming rights take from any "Joe Montana Gate" or "Bill Walsh Concourse," the 49ers really will score - better than they did last playing season and probably better than this year.

Please. Let's not pretend for a minute that the Santa Clara Stadium Authority is going to get the best deal it can possibly get under those conditions. Putting even more cash into the pockets of the 49ers doesn't help us pay off the massive debts we'll have from the stadium's construction - or from operating it for the 49ers.

The massive stadium subsidy means well over $130 million in broadcast royalties, luxury box contracts and club seating for the 49ers in the first year of any stadium in our city.

It means a stinking $180,000 for our City's General Fund.

But - as usual - we saw this evening in City Council Chambers that the stadium subsidy "deal" isn't intended to benefit us.

It's only designed to benefit the 49ers.



Thank you for your continued support,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org

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49ers Stadium Subsidy: Fireworks of a different sort

Dear Santa Clarans,


Item 7C2 from Tuesday evening's Consent Calendar got pulled for discussion. Sounds innocuous - but it actually lit up the night sky, if only briefly.

City Staff informs that it will be virtually impossible for our city to have a fireworks display at Central Park this July 4th. Not only do we not have the $65,000 it will cost, we don't even have the City Staff to supervise and conduct it.

Click the icon here for the details.

Boosters of the San Francisco 49ers' stadium subsidy have made this quite clear: It's OK for our RDA (what's left of it) to abolish its own debt deadline to subsidize the stadium, causing our city's General Fund to lose a nominal $19,500,000 over time. (See table, last page.)

But we can't afford $65,000 from that same General Fund for fireworks this year?

If these are truly the priorities of the "stadium boosters," maybe it's time for "fireworks" of a different sort.

When speaking of fiscal responsibility in Santa Clara, it ALL goes on the table - the subsidy for the San Francisco 49ers as well as our General Fund's ongoing spending patterns. Anyone trying to attack one and not the other is simply not giving Santa Clarans the whole story.

You as residents of Santa Clara can help put that discussion back in perspective. Please get involved. Contact the Mayor and City Council and tell them what you think.

Look upon it as another sort of "red glare."



Thanks and regards,
Bill Bailey, Treasurer,
Santa Clara Plays Fair

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49ers Stadium Subsidy: "Parking" $4.5M of RDA Funds

Dear Santa Clarans,


"Thank you" to the public-spirited residents who spoke in this evening's Special Meetings of the RDA and the Stadium Authority. We got the meeting materials less than 90 minutes before those two meetings – so, not a bad turnout.

We didn't win, but Councilmembers Kennedy and McLeod stood up for this very important principle: Let's not give public money to a private corporation with no signed development agreement - and with no guarantees from the San Francisco 49ers themselves. However, the vote still went 5-2 in favor of the 49ers Stadium Raid.

Summary: The "stadium boosters" on the Council are claiming that Measure J licenses them to do this - to essentially "park" RDA cash in the accounts of a private business to keep it out of the hands of the Governor. We call it "RDA Keepaway."

The rationalization? Sell the $4.5 million as being "only" for "make-ready" infrastructure - sidewalks, driveway cuts, paving, piping - which we "claim" we would do even if the stadium deal were to fall through.

You can drive a cement mixer through that argument: One doesn't need to hide funds with a third party to buy fire hydrants for Tasman Drive.

Footnote: Those meeting materials, by the way, included letters from the public on this $4.5 million giveaway - and of the 54 distinct responses I found, all 54 were AGAINST the handing over of public money to the (very) private 49ers. See here (click POST MEETING, see pages 26-96).

Thank you - everyone - for all of your support.


Bill Bailey, Treasurer,
Santa Clara Plays Fair

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49ers Stadium Subsidy: "Let's just give it to 'em right now!"

Dear Santa Clarans,


Please see the Mercury News' coverage of the Special Meeting of our RDA and Stadium Authority to be held on Monday evening:

Santa Clara's next idea to keep stadium money from state: Give it to 49ers

Do we understand this correctly? Our RDA - identically our City Council - is going to take $4.5 million in RDA cash and hand it to a stadium developer which just locked out their own NFL Players and which has not even come up with its OWN financing for the stadium?

In the bitterest of divorce actions, one spouse desperately moves assets around to conceal them from the other spouse's lawyer. Here, we're handing RDA cash over to the San Francisco 49ers simply in order to keep it out of the hands of Governor Brown.

Not only that: The Mayor himself informs that we cannot even view the text of the motion for Monday evening until Monday morning at the earliest. That's not open government, no matter what rationalization the "stadium boosters" on the Council are using this week.

If you can make it to City Hall at 7:00 pm on Monday evening, March 21st, please come and watch your city government in action.



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

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49ers' Stadium Subsidy: A promise is a promise

Dear Santa Clarans,


The promise: The General Fund of the City of Santa Clara will take NO hits - directly or indirectly - due to the 49ers' stadium subsidy.

This evening in Chambers, "stadium boosters" - on the City Council and off - become very uncomfortable addressing that broken promise, but it's still an inconvenient fact:

• We can't subsidize the San Francisco 49ers with $21 million in bonds paid off with tax increment - unless we extend the time limit of the Redevelopment Agency.

• That extension, or SB 211 amendment, utterly reduces the passthroughs payable to our City's General Fund. We lose a nominal $19.5 million over time.
  

There's not enough money to pay our city employees what we paid them a year ago, so they are foregoing this year's increase and taking 5.15% pay cuts. But at the same time, there's enough in that same General Fund to lose due to the 49ers' stadium subsidy?

Twice, I asked the city to demand that the 49ers make our General Fund whole, but twice, there was no direct response.

The passage of Measure J does not make any of this a "dead" issue, and it should not stop anyone from speaking out. Our city loses big time with the 49ers stadium subsidy - and Santa Clara Plays Fair urges residents to read up, learn, and tell their neighbors what this will truly cost us as a city.



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

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49ers' Stadium Subsidy: Common Sense gets Sacked.

Dear Santa Clarans,


On Wednesday, Tom Barnidge of the Contra Costa Times did an excellent job of covering the RDA extension which passed First Reading by our City Council on Tuesday evening:

Common sense takes a beating with redevelopment funding

"...So maybe this is not a simple yea-or-nay issue. Maybe cutbacks and reforms can reinvent redevelopment. But there's no way California should give $40 million to the 49ers."

Schools? Or stadium subsidies? As a city, we can't have lost that much perspective on this one issue.

Common sense got sacked like Alex Smith this last Tuesday evening - and so did a promise our Council made to us much earlier.



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

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49ers Stadium Subsidy - and a Broken Promise.

Dear Santa Clarans,


Last night, City Council voted to accept the First Reading of the RDA Extension. By doing that, they confirmed that they were breaking a promise that they made to all Santa Clarans four years ago.

Back in January of 2007, Council was very clear. They approved, unanimously, the Guiding Principles for the 49ers' stadium subsidy. The very first one was a pledge to us that the stadium subsidy was not going to impact our General Fund, directly or indirectly. See page 4/4, Guiding Principle "1."

Yet, last night, Council voted to bleed $20,000,000 out of our city's General Fund over the new RDA lifetime. Click the little icon here, and see page 15/15.

Note the "($19.5)" (MILLION) in the lower half of the table after "City of Santa Clara." That is what our General Fund loses, and those are real dollars.

But this isn't news to anyone, is it? We saw this same table on the evening of June 2, 2009, when the Term Sheet was presented - but only at that meeting, and after the news cameras were switched off. The General Fund ripoff was quietly buried.

Santa Clarans, we are not getting the whole story on the $444M 49ers' Stadium Subsidy, and certainly not on what it is really going to cost us as a city.

We may want to prepare ourselves for even more broken promises.

The Public Hearing on this SB 211 amendment, or RDA Extension, will be held on Tuesday evening, March 15th, in Chambers at 7:00 pm.

Can you make it?


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

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