49ers' Stadium Subsidies: Making our General Fund Whole

Dear Santa Clarans,


If you caught Tuesday evening's Stadium Authority Meeting Agenda posted last Friday night and its media coverage, you would have seen a total capitulation in our Stadium Authority's bid to host Super Bowl L or LI.

Miami, a metropolitan area of 5.5 million, pushed back on some of the very demands that NFL Commissioner Roger Goodell made of Santa Clara when he visited us back in January.  Miamians said that they weren't going to give up any of their hotel taxes in order to host a Super Bowl.

Those negotiating for our Stadium Authority sprang into action.  As both the Agenda Report from Friday and the local news coverage made clear, those in charge of our bid to the NFL said that Santa Clara would leave all of that, plus waivers of the Youth/Senior Ticket Fee and the Off-site Parking Charges on the table for the NFL to snatch up.

But those hotel taxes are still a part of an $11 million revenue stream vital to our city's General Fund.  No one on our Stadium Authority and City Council had any business even considering such a thing.   Tuesday evening, I presented this one slide before the Santa Clara Stadium Authority and the City Council:

After all, a promise is a promise, even if Council made it over six years ago.

At any rate, I learned shortly after this, in Chambers, that during the day on Tuesday, the San Francisco Super Bowl Host Committee finally stepped up where the NFL itself would not.  There is now at least an agreement in principle that our city's General Fund will lose nothing because of what still remains a rather pathetic cave-in to the NFL's demands.

I was impressed but not terribly surprised that the Bid Committee and City government could move that fast.   As it turns out,  I was required by the City of Santa Clara Policy and Procedure Manual to submit the slide above in advance to City Hall so that it could be checked for compatibility with the equipment in Chambers.   This I did at 1:18 am Tuesday morning, a good seventeen hours in advance of the Special Session.

For whatever reason today's events unfolded the way they did, this resident is grateful.  But why bother?  350 hotel rooms in Santa Clara, let for a week with the 9.5% Transient Occupancy Tax waived, could amount to a mere $30,000 to $50,000 in losses to our General Fund.

Well, we've had no Fourth of July fireworks display in Central Park in 2011 or 2012 because our City's Government has lacked the $65,000 to $80,000 needed for it.   A resident learned that the City was spending about $10,000 to provide Santa Clara Police escorts for the 49ers on our dime.

Now, staffing the new Northside Library will cost the General Fund about a million dollars a year, and if we choose to finally rebuild the International Swim Center, we'll stretch to provide the $700K per year it will cost to operate it  (See the 2012-13 City Budget here , pp. III .)

In other words, $50K here and $50K there, and in no time at all, you're talking real money.

But the real reason why Santa Clara Plays Fair took this up was that the promise above had already been broken by our City Council two years ago, nearly to the day.

It was on March 15, 2011, that the Council voted the very SB 211 amendment which would take $19.5 million out of our General Fund over time by a diversion of  RDA money.  It may be called an irrevocable act on behalf of a now-defunct RDA.  But it was still done in order to grease the subsidy of Jed York and his stadium, and it is very much a real General Fund loss - as today's giveback almost was.

Two years ago, by the way, "make our General Fund whole" were exactly the words of Santa Clara Plays Fair.  Tuesday evening in Chambers and in the media, we were grateful to learn that City Staff agrees with us.



Thanks for all of your support,

William F. "Bill" Bailey, Treasurer,
SantaClaraPlaysFair.org

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49ers' Stadium Subsidy, Schools Money in One Pot - Who Knew?

Dear Santa Clarans,


In the wake of the dissolution of Redevelopment Agencies in California, every city has its own story, no doubt about it.  In a nutshell, this is ours:

Our former RDA couldn't subsidize the San Francisco 49ers to the tune of that original $42,000,000 without extending its own authority to hand your property taxes over to the team.   But our Council did just that in February of  2011 when they first proposed abolishing the debt-incurrence time limit for our RDA.  This was the so-called "SB 211" amendment.

The claim at the time was that this would enable the RDA to issue low-interest bonds to pay back cash advances from the 49ers.  Click on Agenda Item 6B here to see the video and get the reports.  The same claim was made when the SB 211 amendment was finally passed on March 15th, 2011.

Now, fast-forward to the City Council meeting of June 7, a mere eighty-four days later.  In that meeting, surprise!:  We learned that there was no way that the RDA could possibly issue any bonds at all.  The RDA would be stuck paying the 49ers for their "Agency Advance" at an interest rate of up to 8.50% - using our property taxes to do it.

See page 5 of the "Committee of the Whole" report here :

By the time of the dissolution of the RDAs with AB 1x 26, the San Francisco 49ers had managed to suck over $10,000,000 out of our RDA.   But now, both the remaining subsidy for Jed York and property taxes to support Santa Clara Unified Schools have ended up in the same, identical "Redevelopment Property Tax Trust Fund," or RPTTF.   The Oversight Board of the Successor Agency is responsible for payments from that fund.

A majority on that Oversight Board - and the California State Department of Finance as well - have rightly refused to recognize the stadium subsidy to the 49ers as equal to needed funding for SCUSD schools.

Well!  Furious that they cannot bleed that last $30,000,000 out of our property taxes, the 49ers are suing the Oversight Board - and they've gotten the courts to stop payments to any other Agencies until they get payments to themselves.  One original estimate (5/3/2012) actually called for the Oversight Board to pay the 49ers more than $52,000,000 over time!:

 


How on earth did a plum payment to a millionaire NFL team owner end up in the same pot as the money we need to educate our children?  By what arrogant stretch of entitlement do the 49ers justify holding the entire RPTTF hostage and in making the Oversight Board responsible for acts of Sacramento?

Ask a 49ers Stadium Booster - if they voted for Measure Jed on June 8, 2010, then they voted for exactly the outrage above.**

We'll know more on March 22nd, when 49ers v. Oversight Board is heard in the Sacramento Superior Court.  Please stay in touch, and ask questions.  What we don't know, we'll do our best to find out.


Thanks for all of your support,
William F. "Bill" Bailey, Treasurer

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49ers v. Oversight Board:   Case 34-2012-80001192 may be searched here . Pull down for "Civil," check "CCMS," then enter the case number.  Smile.

**If you do ask a 49ers Stadium Booster, please don't settle for any weasel words.  That "Agency Advance" was amply covered in the June 8th, 2010, language for Measure Jed, §7.4(c).  I'm reading my old Sample Ballot now as I write this.  It was one of a myriad of reasons I voted a flat "NO" on Measure Jed then.

The NFL's Extortion of Santa Clara

Dear Neighbors,

 
We Santa Clarans are sinking the Santa Clara Stadium Authority $950 MILLION in debt to subsidize Jed York's stadium for him.  We're settling for miserable jobs, atrocious economic activity and massive traffic jams, and that's even after we've given in to the 49ers' demands again and again.

Our reward?   A DDA and a joinder agreement even worse than the previous proposal.   When we collected 5,500 petition signatures to put the $950,000,000 subsidy on a ballot after it increased from $114,000,000, Santa Clarans were told that they would not be allowed to vote again.

Now, get this:  The NFL itself has gotten into the act.  Their demands, from the Mercury News' coverage of late today, include:

'Give us the stadium, the Youth Soccer Park, and the surrounding parking for less than the going rate.'

• Just a minute:  The 49ers would pay us even less during a Super Bowl than they would during Regular Season play?

'Give us part of your hotel tax receipts.'

• A revenue stream absolutely vital to our City's General Fund, tapped by the NFL?  In no time at all, Roger Goodell's demands on our Transient Occupancy Tax, or T.O.T, will exceed that pathetic little Ground Rent paid by the 49ers.

'Waive the California Sales Tax on Super Bowl ticket sales, and give our VIPs a break on anything they buy while they're here.'

• So someone paying a thousand bucks for a football ticket gets to stiff us for $90.   Who on earth do Roger Goodell and Greg Aiello think are going to pay those taxes?  With Sacramento in the shape it's in, try to imagine the likelihood that the same State Government that shoved SB43 down our throats is actually going to forgive those taxes.   In fact, you can bet your bottom dollar that the State will hold Santa Clara responsible for any taxes we waive. 

The spinmeisters will soon be out in force telling us that the League and the 49ers are doing this for our own good - "Gosh, think of all of those cheeseburgers you're gonna sell!" 

Please don't fall for any of it - the NFL's demands boil down to simply this:

'Give us even more breaks for our millionaire team owners and their hanger-on guests, or we won't won't even look at your Super Bowl bid.'

Santa Clara Plays Fair urges Santa Clarans to watch the actions of the "stadium boosters" on our City Council carefully.  As we learn more, we'll share it as soon as we can. 

There is only one word for the actions of the National Football League, and Santa Clarans should repeat that word early and often:  This is extortion.
  
Please, Santa Clarans:  Tell our Mayor and Council :

NOT ONE PENNY MORE.

Not for Jed.

Not for Roger, either.


 
Thanks for all of your support,
William F. "Bill" Bailey, Treasurer,
Santa Clara Plays Fair

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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