49ers, Santa Clara stadium deal finally on the horizon
By Mike Swift
Mercury News
Posted: 04/01/2009 07:02:49 PM PDT
The San Francisco 49ers and the city of Santa Clara are on the brink of finalizing a stadium deal.
With terms significantly more favorable to the South Bay city than those discussed last year, both the 49ers ownership and city officials agreed Wednesday that most negotiating hurdles have been cleared and that a deal is at hand - if Santa Clara voters agree - to build a 68,500-seat stadium that would open for the 2013 NFL season.
The concessions by both sides, which sources familiar with the talks said include the 49ers paying Santa Clara to use city-owned land near Great America for the stadium, and a significantly smaller subsidy from the city's Redevelopment Agency, came through more than a year of steady negotiations. With the nation plunging into a serious recession, the deal appears to have been shaped by the political reality of winning taxpayer financing for a stadium in tough times. It would move the 49ers a big step closer to leaving San Francisco after seven decades and five Super Bowl titles.
"Until we get the deal done, we're not going to confirm any of the things that are out there," 49ers President Jed York said Wednesday, when asked about the concessions. "But I think we are getting pretty close to getting a deal done."
York, who has been increasingly positive about finalizing a deal with Santa Clara in his public statements in recent weeks, added: "I'd be disappointed if (the City Council vote) wasn't by
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June."
Santa Clara Mayor Patricia Mahan, who also declined to discuss the concessions in detail until a deal is finalized, said a turning point in the talks came in January. That's when city officials realized that the economic downturn would sap redevelopment agency revenue available for the stadium project, but the 49ers signaled they would accept a smaller stadium subsidy.
"At that point in time, I was fearful it could all fall apart," Mahan said of the talks. "Realistically, we all knew we were not going to have that kind of money to invest in the project, and they were willing to accept less as a direct investment from the city, and search for ways to still make the project work. I think we are inches away from getting the best possible deal we can get for Santa Clara."
Smaller subsidy
While any deal must be ratified by voters - probably in March 2010 - the good news to the city of Santa Clara includes reduction in the city's subsidy of the project and additional rent payments for use of city land. And the city still must solve the problem of appeasing the owners of the Great America theme park located right next to the proposed stadium.
But Mahan is so confident that a deal is near that she said the City Council could sign off on the outlines of a deal as soon as Wednesday - although a council vote could be several weeks off. The mayor also said a recent negotiating visit by City Manager Jennifer Sparacino to Ohio to meet with the corporate owners of Great America could mean an end to the theme park's opposition to use of its parking lots to build the $900 million stadium.
Last year, when the city entered into negotiations with the 49ers, it proposed allocating $109 million in redevelopment money and hotel tax receipts toward construction of the stadium. The city also would pay to move an electrical substation and to build a parking garage on Tasman Drive previously approved by the voters. But following the economic meltdown, the 49ers have agreed to a significantly smaller contribution from the city, one that would amount to less than $90 million from redevelopment and hotel tax receipts, sources close to the talks said.
In making concessions, the 49ers may be gauging the strength of voter support during a serious recession. The team will now be able to argue to voters that its commitment to the South Bay is so strong it is willing to accept tens of millions of dollars less than the $160 million the 49ers had sought in 2007, and that the contribution by Santa Clara taxpayers would be a smaller percentage than for other contemporary NFL stadium deals.
City politicians, meanwhile, many of whom receive sizable campaign contributions from unions who would benefit from the jobs created by the stadium, also have made concessions. One would be agreeing to a vote on changing the city charter to allow the 49ers to hire a construction contractor without a competitive bidding process.
Mahan predicted city voters would support the $900 million project when specifics of the deal are revealed.
"I feel more and more support from the community," she said. "I think as the numbers have improved and the city's investment has decreased, as (the 49ers') expectations of the city have decreased, and as we have built-in avenues to make sure our general fund is protected and we actually have some revenue streams coming to the general fund, more and more people have come on board, understanding that this is good for the city."
Team concessions
Among the concessions the team has agreed to in principle:
The 49ers would make a rent payment to the city for the use of city-owned land now leased for Great America's parking lots for the stadium site. The city manager had objected that the original stadium package proposed by the 49ers included no direct payment to the city's general fund.
The 49ers would agree to cover construction cost overruns through 2013. While the team had already made those guarantees through 2012, the stadium now is not expected to open until the 2013 NFL season.
While the city would own the stadium, the 49ers would agree to pay for its demolition at the end of its useful life, perhaps 40 years from now.
The team would agree to cover losses for unprofitable non-NFL events at the stadium.
For the 49ers, a deal with the city is crucial for many reasons, but one key reason is that a public subsidy would unlock NFL stadium financing.
York said a resolution of talks with Santa Clara appears to be so close that the main factor dictating the timing of a ballot vote is the state-mandated environmental impact report, which he said may not be completed until after November, the next possible date for a ballot vote. State law requires a completed EIR before a binding ballot vote.
"We can go in November," York said of the ballot vote, "but we want to make sure it's a binding ballot."
Politically, waiting until 2010 might also be more advantageous for the 49ers, allowing time for an economic recovery to take hold.
It also would allow time for a deal between the 49ers and Cedar Fair to jell - perhaps the team would buy the theme park. Sandusky, Ohio-based Cedar Fair recently announced that it is eager to sell properties across North America to cut its corporate debt. A Cedar Fair spokeswoman did not return telephone calls Wednesday.
While there were deep questions about how the recession could affect prospects to build an NFL stadium, the downturn may end up strengthening the case Mahan and other proponents make for the project.
The stadium would be one of the biggest private construction projects "this county has ever seen," the mayor said. "The initial construction phase is really going to be a boost for the economy, and having the stadium here is going to stimulate things further because I think we will see other development arise because of the stadium location - hotels, restaurants, other entertainment venues, those kind of things."
