Rift deepens between 49ers, Santa Clara
It isn’t every day that someone in politics opens a meeting with our editorial board by acknowledging to being “a little bit nervous.”
“I remember your editorial when the stadium was being built,” Santa Clara Mayor Lisa Gillmor said Wednesday. “I thought there might be a little ‘I told you so’ when I walked in the door.”
There wasn’t. My colleagues and I were there to listen and ask questions. And Gillmor had quite a story to tell about the state of relations between the San Francisco 49ers and the city that partnered in the financing to help them build the $1.2 billion Levi’s Stadium.
She described a “David and Goliath” scenario in which the city of 120,000 did not have the specialized expertise required to ensure that it was getting its promised return on investment.
“We learned we cannot trust the 49ers,” Gillmor said. “They are our partners, but they have exploited what we’ve tried to do in the city. They recognized the fact that we were ill prepared ... they were professional; they knew what they were doing.”
The strains that began when the 49ers wanted to take over youth soccer fields in the shadow of the stadium have only intensified. The city and the team have been fighting over the accounting of revenue due the city, security cost overruns, curfew violations and the 49ers’ request for a rent reduction. The latter dispute has gone to arbitration, and the 49ers have filed a lawsuit accusing city leaders of falsely accusing the team of breaching its lease.
Gillmor is not alone in her pique. The November election became a bit of a referendum on the 49ers; three of the four City Council candidates considered friendliest to the team were defeated, and nearly 90 percent supported a measure growing out of the soccer-field flap that requires a public vote to sell any cityowned land used for recreation.
The rumor around town was that the 49ers secretly funded its preferred council candidates with “dark money.” I asked the team president, Al Guido, whether they did. He would not answer.
He suggested the 49ers have been unfairly maligned in “political grandstanding” by Gillmor and other elected officials.
“We got into this agreement knowing that we were getting into a 40-year relationship with the city and we were not always going to see eye to eye,” Guido said in a meeting at The Chronicle on Friday.
Roger Noll, a Stanford professor emeritus of economics who is a preeminent analyst of sports finance, noted that disputes between teams and cities about stadium deals are not uncommon — but they usually don’t crop up for 15 to 20 years, when a team starts posturing for a new venue.
“Bear in mind that one element of the problem is that Santa Clara is a relatively small city so that a small-dollars dispute — such as soccer fields and reimbursement for public safety — is a bigger deal per capita than in a bigger city,” said Noll.
The most significant dispute is about revenue sharing. The 49ers, who manage the stadium, keep all football revenue and share non-NFL profits with the city.
Is Santa Clara getting its fair cut? The mayor said she has no way of knowing.
“We are not able to verify the numbers they give us,” Gillmor said. “They lump them together without detailed financial information in dozens of areas. Dozens.”
Guido said the 49ers have been willing to show — but not turn over — the detailed records to the city about concerts and other non-NFL events. Their concern was that public disclosure of expenses and profits could put the stadium at a disadvantage in negotiations with promoters.
He added that Santa Clara received an “unbelievable deal” in a $1 billion asset paid for with private money — and, he insisted, it is generating millions annually in net revenue for the city.
An independent audit by the wellrespected Harvey Rose Associates could help illuminate those questions about the stadium finances. Gillmor, who has reviewed a draft, suggested it would show violations of the 2010 ballot measure’s prohibition on the tapping of city general funds for the stadium.
The recent U2 concert at Levi’s also became a point of contention when it went an hour past the weekday 10 p.m. curfew, after the 49ers had asked for — and been denied — a waiver. City officials seethed about the brazen violation, for which the team was fined $750. The Valley Transportation Agency sent the city a bill for $61,000 for the additional light-rail trips.
“We’re sending that bill to the 49ers,” said the mayor.
Guido would not commit to paying it, saying he has not seen it yet. As for the curfew kerfuffles in general, he said a stadium operator “can’t dictate” which day of the week a major concert gets scheduled. The team is asking the city for a couple of curfew waivers each year.
“You either decide you want to be in this business or you don’t,” he said, noting that the curfew-busting Beyoncé and U2 concerts generated $1.6 million for the city. “If you upset the apple cart on these promoters, they’ll go somewhere else.”
There sure is a lot of vitriol for year four of a 40-year lease.
The mayor has emerged as an unlikely critic of the 49ers deal. During the 2010 campaign, Gillmor was a spokesperson for the pro-stadium Santa Clarans for Economic progress: “I walked precincts for them. I put my name out there. I trusted that they were going to do the right thing for the community.”
She now says she hopes that Santa Clara’s experience could become “kind of a model” for other cities going into partnerships with professional sports franchises. Las Vegas comes to mind: Its deal to lure the Raiders from Oakland includes a $750 million taxpayer contribution for a $1.9 billion domed stadium to open in 2020 — and a lease with zero rent for the team.
It’s clear to Gillmor that Santa Clara did not ask enough questions, demand enough details or have representatives in place with both the savvy and the will to fully defend the city’s interest.
One of the city officials Gillmor identified as too cozy with the 49ers was Finance Director Gary Ameling. He left Santa Clara earlier this year to become chief financial officer for ... the city of Las Vegas.