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..."