49ers sue Santa Clara in dispute over financial records
The San Francisco 49ers, embroiled in an angry dispute with the city of Santa Clara over the team’s financial management records at Levi’s Stadium, have gone to court seeking a ruling confirming their claim that they’ve turned over all the documents they’re legally required to disclose.
City officials have accused the 49ers of withholding documents on their maintenance, operation and long-term spending plans for the $1.2 billion stadium, information that could reveal whether the city is improperly spending taxpayer money on the project. In October, Mayor Lisa Gillmor said Santa Clara would take over management of the stadium — depriving the team of revenue from all events except its own football games — unless it received all the documents.
In a suit filed Friday in Santa Clara County Superior Court, the 49ers’ Stadium Management Co. said it had provided all the records required by its contract with Santa Clara, and accused the city of acting in bad faith.
The city-run Stadium Authority “has embarked on a scheme to concoct and fabricate false accusations of breach or nonperformance by Management Company in order to create a pretext for terminating the stadium management agreement,” the 49ers’ lawyers wrote.
They asked for a ruling declaring that the management company “has performed all of the obligations” in the contract, and requiring the city to pay attorneys’ fees and court costs.
In a letter to City Manager Rajeev Batra, also dated Friday, a lawyer for the 49ers said the KPMG accounting firm has given the Stadium Authority’s financial statements a “clean audit opinion” for each year of operations.
Gillmor was not immediately available for comment. But a city audit report Monday indicated the differences between the two sides may be narrowing because the 49ers had agreed to provide access to some previously withheld documents.
This is not the only legal dispute between the 49ers and Santa Clara. An arbitrator is reviewing the team’s claim of a one-time $4.25 million reduction of its $24.5 million rental payment to the city, based on revenue from the first year of operations.
The 49ers moved south from Candlestick Point in 2014 and signed a 40-year lease for the stadium with Santa Clara, with an option to renew it for an additional 20 years. Financing arrangements, including a tax on nearby hotel rooms and a loan taken out by the Stadium Authority, were designed to protect the city’s general fund from stadium costs.
Gillmor told the City Council in November that the 49ers had refused to provide the Stadium Authority with detailed budget reports, an operation and maintenance plan, and a five-year capital expenditure plan.
The audit report Monday, however, said budget documents provided by the 49ers’ Management Co. for 2016-17 included a five-year capital plan.
But the audit said the 49ers have provided only an overall cost figure for stadium operations in 2016 — $7.56 million — without detailing the costs or the amount spent on football and non-football events.
The team has declined to disclose the revenues it took in from concerts and other nonfootball events unless the city agrees to keep the information confidential, the audit said. It said the team has also refused to turn over its detailed maintenance plan for the stadium because “it contains sensitive security information.”
The auditors said the City Council could consider the confidential matters in a closed session and delete any sensitive information from documents made public.