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to our city's General Fund, some $19,500,000 over time, cannot be reversed because the SB 211 amendment cannot be rescinded.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.
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.
Thanks for all of your support,
Bill Bailey, Treasurer,
-=0=-
1 comment:
The Santa Clara City Council needs to understand what can happen.
They also seem to reneger the people's views.
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