On June 8, voters in Santa Clara will have the rare opportunity to determine the future of a multi-million dollar franchise – the San Francisco 49ers.
If the stadium initiative passes, know as Measure J, will bring the NFL to the South Bay.
The 49ers and Santa Clara are by no means strangers. The team’s 11 acre practice facility and headquarters are located in the city’s north side, near Great America.
The proposed stadium will cost an estimated $937 million, with the 49ers and the NFL paying $493 million. Santa Clara city officials have agreed to pay $114 million, with this figure being paid by the city’s Redevelopment Agency. The other $330 million is to be paid for by the Santa Clara Stadium Authority.
The Stadium Authority is a recently developed branch of the city government, designed specifically to fund the stadium with the help of private investors. The excess amount not covered by them falls on the city to pay in the end.
The $114 million Santa Clara will pay doesn’t even take into account the $20 million the city’s electric utility, Silicon Valley Power, will be forced to spend to move the Tasman electrical substation away from the stadium site, or the other $17 million the RDA will have to spend on a new parking structure.
The 49ers have only eight home games in a season; at most they would have two playoff games and two preseason games. The revenue spenditure and the “usage” the stadium acutally sees is off kilter.
The No on J crowd, found at scplaysfair.com, uses figures that take inflation into consideration, unlike supporters backed by the team’s figures. The opposition adopted the name Santa Clara Plays Fair because rights to noonJ.com were bought by the 49ers.
According to Stanford Professor Emeritus of Economics Dr. Roger Noll, in an interview with Dr. Chris Koltermann, a Santa Clara Plays Fair board member and Stanford alumnus, the Stadium Authority stands a good chance of going bankrupt.
When factoring in the cost of this RDA diversion along with the cost in stadium upkeep, the annual fee to the city will be $98 million. The expected stadium General Fund revenues over the 40 year lease, including rent and all new taxes, totals $31 million annually. This results in a $67 million annual net loss, according to the Santa Clara Plays Fair website.
The 49ers will also retain their current “sweetheart” rent deal with the city and it will be expanded to include the stadium. This deal currently allows the 49ers to only pay $26 million in annual rent.
Voters in the “Mission City” need to decide whether or not they like gambling, because that’s exactly what this measure amounts to – a gamble. There is absolutely no guarantee that they will profit or break even on their investment. To be honest, they will not see profit on their investment. Even the 49ers know this. The impact on the city’s economic outlook would be a mere “drop in the bucket,” according to the most recent 49ers memorandum.
The 49ers chose Santa Clara because for them it’s all reward – while for the city, it’s all risk.