KQED Forum discussion on the Santa Clara 49ers Stadium

Will Kennedy and Patricia Mahan discuss Measure J on KQED public radio.

Mahan

Santa Clara Mayor Patricia Mahan works with San Francisco 49ers to enliven north Santa Clara residential neighborhoods

In a May 20th, 2010 KTVU channel 2 report on the 10 o'clock news, Santa Clara mayor Patricia Mahan said:

"I can envision when the fans come in for a football game, or a concert, or any other event on the weekend - that area of town - which is pretty much shuttered on the weekends, is gonna be a vibrant place to be."

Not coincidentally, Patricia Mahan's 4,655 square foot house is near Santa Clara University, far from the residential neighborhoods by the stadium. But there you have it stadium site residents - start throwing more block parties and keep the shades up in the next few months and maybe Patricia Mahan will decide that you haven't shuttered your neighborhoods on the weekends. And then she can work with the 49ers to find residential neighborhoods that are so quiet on the weekends that they need police checkpoints along with 68,500 fanatical football fans, concert goers and monster truck afficionados to bring in fun and excitement - or as she calls it - vibrancy.

Lloyd LaCuesta follows the script: pre-election don't mention the Santa Clara Stadium Authority

LaQuesta

In a May 20th, 2010 KTVU channel 2 report on the 10 o'clock news, Lloyd LaCuesta echoed the sentiments of the 49ers and their shills: the city of Santa Clara puts up $114 million, "and the 49ers would pay the rest". In reality, the Santa Clara Stadium Authority has to come up with $330 million. Per the stadium sales pitch, they will have no problem doing that - selling the name to the stadium, charging 49ers season ticket holders for the privilege of buying season tickets, charging vendors for the right to sell food and drink in the stadium, and getting money from "corporate founding partners". While the city of Santa Clara and the 49ers claim that there will be no problem getting $330 million from these sources they don't list any amounts they expect to receive from them. And they keep quiet about the fact that bonds will have to be issued since most of these sources are yearly payments - the only lump sum payment being from 49ers season ticket holders - and the bonds will have to be paid off from the income sources - if that income is sufficient.

Which raises an obvious question. If the Santa Clara Stadium Authority can easily come up with $330 million as promised by the people trying to get a YES vote on Measure J, then why didn't the 49ers just buy the stadium themselves? Why are they willing to pay $493 million which combined with the $330 milion is almost 90% of the stadium costs - and then rent it? In what other deals does someone pay almost all of the cost of something they are going to use and then not own it? If $330 million will easily flow in to the Stadium Authority, it is hard to see why the 49ers wouldn't just come up with all the money. The 49ers' brochures refer to the $35 million from the new hotel room rate tax as a "hotel investment" and remove it from the city's contribution. The 49ers could have counted on that as well since the hotels voted on it voluntarily. The hotels would have done that regardless of who owns the stadium. That gets the part that the 49ers didn't pay for down to $79 million. The city claims they were going to spend $17 million on a new parking garage even without a stadium. Now the 49ers extra contribution is down to $62 million. For another $62 million they could have owned a $900 million (even higher with typical cost overruns) stadium for 60 years. Instead, they are choosing to rent it. And yet the 49ers, their front group, and the Stadium Five say that the stadium is a great investment for the city of Santa Clara. A good investment for Santa Clara, but not for the 49ers or the 49ers owner??

LaCuesta also incorrecty stated that the term sheet is a "40 year agreement between the city and the 49ers". In fact, the term sheet is a preliminary non-binding document. The final agreement will be the Disposition and Development Agreement (DDA). The voters are voting on a non-binding agreement and the final agreement will be made after the election. Any guesses on whether the post-election final deal will be more or less favorable to Santa Clara voters?

And LaCuesta also mistakenly stated that the 49ers will pay all stadium operating expenses. The term sheet actually states that " 49ers Stadium Company will have the right to reasonably identify the costs and expenses in the Annual Stadium Operating Budget that will be included in Reimbursable Expenses and, therefore, be subject to 49ers Stadium Company reimbursement". The 49ers will also not pay Santa Clara Stadium Authority bond debt payments, which would put the Stadium Authority into bankrupcty if they cannot make those payments based on Naming Rights, Pouring Rights, Seat Licenses, etc.

Common Sense, the Numbers and elected 49ers Salespersons

In the 49ers stadium sales pitch that Patricia Mahan and Jamie Matthews made in the May 5th, 2010 Santa Clara Weekly the following statements were made:

Although we know the potential economic benefits to the region exceed $249 million, what convinces us is the direct benefits to Santa Clara. We approached the project with caution and backed our city manager in three years of tough negotiations. We put Santa Clara first - and ironclad protections for our city and residents are written into the law. The suggestion that our city manager would recommend something that would harm Santa Clara just simply does not hold up to common sense.

The last sentence is a phrase that no doubt has been used many times throughout history. It was likely uttered on Wall Street a few years ago by CEOs justifying the new mortgage lending techniqes: "The idea that our managers would recommend something that will harm our company just simply does not hold up to common sense". And then their companies collapsed. Unless they are corrupt, every manager believes that their decisions will not harm the entity they work for.

So you would assume that the last line would apply to the Santa Clara 49ers stadium project and the city of Santa Clara manager. That is, until you read the presentation she and her staff gave to the city council on June 2, 2009, that shows the City of Santa Clara takes a $67 million hit to the General Fund (net present value - actual dollars higher) from a one-team stadium. Showing that a huge General Fund hit was already baked into the Santa Clara stadium project at the start, and then in the same presentation recommending that Santa Clara proceed with the 49ers stadium project only holds up to uncommon sense. Or it demonstrates that the city of Santa Clara has a manager who will go along with whatever direction she gets from the Stadium Five - regardless of what common sense and the numbers dictate. Although if that is the case, you have to at least give her credit for not providing the Stadium Five with numbers that make the stadium look like a good deal.

For stadium area residents there's Good News and Bad News

The residents next to the stadium site have good news from the city of Santa Clara - police checkpoints will prevent stadium goers from parking in their neighborhood. These checkpoints will also offer them an excellent opportunity to get to know some of the 160 area law enforcement personnel who will be necessary to control stadium events. But they also have some bad news from the city of Santa Clara. Police checkpoints will prevent friends and relatives from visiting while stadium events are taking place. The city of Santa Clara has refused the requests of these neighborhoods to grant parking passes for visitors. Is it necessary to mention that none of the Stadium Five live anywhere near the stadium site? Nor, of course, do the ex-politicians who are also shilling for the 49ers like Pat Kolstad and Lisa Gillmor.

A stadium area resident speaks to the Santa Clara city council about police checkpoints and restricted access to his neighborhood during stadium events

Pro and Con on Santa Clara Measure J find agreement - it's gonna be noisy and traffic will be bad.

Anything for a Vote - The City of Santa Clara's cheap political trick

In order to help convince the voters of Santa Clara to agree to allow the city to subsidize and own the ultimate politician's trophy - an NFL football stadium - for the benefit of the San Francisco 49ers ownership; the Stadium Five, city staff, and the San Francisco 49ers decided to use a cheap political trick. They added a 35 cent ticket surcharge to each NFL ticket which will yield a maximum of $250,000.00 per year. The term sheet refers to this ticket surcharge as the City of Santa Clara Senior and Youth Program Fee. The ballot question that Jamie Matthews wrote adds two more hot button issues, broadening it to being used for "senior/youth/library/recreation". However, Matthews was careful not to mention the tiny (relative to the city's budget) dollar amount.

The $250,000 maximum remains in affect for 40 to 60 years. It is never adjusted for inflation. And of course there is no need to adjust something that only exists to try and con voters in 2010, for inflation that takes place between 2014 and 2074. The city of Santa Clara General Fund is currently $150.8 million. $250,000.00 is 0.165% of this year's General Fund budget. If you spent $100 dollars at a restaurant and left a 0.165% tip it would be 17 cents. The $250,000.00 a year for 40 years has a net present value of $3,000,000 which does not come close to making up for the $67 million loss to the General Fund (net present value - the actual dollar loss is even larger) that is caused by building the stadium for one team. And the 0.165%, as surprisingly small a percentage as it is, will go down steadily over time. And it will actually never be as high as 0.165% because the first year it will be in effect - 2014 - will have a General Fund budget even larger than the one for the 2009/2010 fiscal year. With 3% inflation, in 40 years the city General Fund budget will be $489 million and the $250,000.00 will be down to 0.05% of the budget. And that is without factoring in the aggressive population growth each city council undertakes which will make the $250,000 even more insignificant over time than inflation alone.

So when you see "and additional funds for senior/youth/library/recreation to City's General fund" on your ballot question, be aware that the amount is tiny compared to the General Fund and very small compared to the $67 million the General Fund loses from constructing a one team stadium per a report presented to the city council by city staff on June 2nd, 2009. Be aware that it is a cheap political trick designed to allow a sentence to be added to the "ballot question" - minus any dollar figures - to try and convince you the stadium is bringing in significant amounts of money for several hot button city programs.

Reason #1 - Measure J will result in a net $67 million loss to the City's General Fund.

Will Kennedy speaks to Santa Clara Plays Fair (id SCvoter on youtube.com)
on Reason #1 of top 10 reasons to Vote No on Santa Clara Measure J

Most Santa Clarans are not aware of this finding which appears in the city's economic study. What this means is that even after all direct and indirect stadium revenue to the General Fund is counted, the General Fund still ends up losing a net $67 million -- because the revenue is not nearly enough to offset the cost. Unfortunately, the 49ers marketing materials falsely claim that the General Fund will not be impacted. It will, by $67 million.

You may have read that no General Fund money goes into building the stadium. This is literally true, but misleading, because redevelopment money which would otherwise flow into the General Fund will be diverted to pay for stadium construction. This diversion, plus other losses caused by the stadium total $98 million. The expected stadium General Fund revenues over the 40 year lease, including rent and all new taxes, total only $31 million. The result is a $67 million net loss. (i.e. 98-31=$67 million).

The General Fund is used by the city to pay for police, fire, libraries and parks, etc. The loss of $67 million will have a major impact on these services. The current General Fund budget is approximately $150 million. $67 million is enough money to keep the city going for over 5 months. While the 49ers promise that there will be no taxes, less money in the General Fund will eventually result in either reduced services or new taxes. The City Council just hasn't addressed that yet.

The $67 million figure is in "net present value" or today's dollars. In nominal dollars, the figure is much greater. We use "net present value" because it is used by city staff, and is consistent with standard accounting principals.

Source: Slide 48 in City's 6/2/09 Powerpoint presentation, "City General Fund Considerations"

Location, Location and Location - the three most important things in Real Estate

One of the revenue sources for the City of Santa Clara's General Fund is property taxes. When a Santa Clara resident pays property taxes $10.20 of every $100 paid goes to the City of Santa Clara General Fund. The higher property values are the more the city receives. What happens to property values when a stadium comes to the neighborhood? It isn't mentioned by the 49ers or their front group, but there are residential neighborhoods right near where the 49ers (and likely the Raiders as well) will play. And most people probably assume that the Stadium Five would not place an NFL stadium next to residential neighborhoods. But the Stadium Five are not championing a stadium because it will be good for the city or will not negatively impact residential neighborhoods. They were given a presentation by city staff that showed the city's General Fund would lose $67 million from a stadium. They still voted for it. The city and its people are less important than their relationship with the San Francisco 49ers and their legacy:

"This $1 billion construction project would be the largest this valley has ever seen."
Jamie Matthews and Patricia Mahan in a San Jose Mercury News editorial page article on April, 16th, 2010.

"This site, we believe, would give the fans a great game-day experience and that's what it's all about: doing what's best for the 49ers and doing what's best for the fans."
Patricia Mahan in a 6/19/2007 Mercury News article that showed her courting NFL and 49ers brass.

Are people more likely or less likely to buy a house near an NFL football stadium? What will potential buyers think when they are out with their real estate agent and they are told - "We'd better not look at houses in northern Santa Clara today because the 49ers are playing and we will get caught in a terrible traffic jam." Will driving by a big looming stadium make a potential buyer feel like they've found their neighborhood? It is highly probably a football stadium will suppress property values in the area, resulting in less property tax money for the city's General Fund and the city's school system than if no stadium is built. It is 100% certain that none of the Stadium Five lives anywhere near the proposed San Francisco 49ers NFL stadium site. A stadium that according to Tim Kawakami of the Mercury News, needs the Raiders in order for the San Francisco 49ers to pay the bills. Two football teams mean that 20 consecutive Sunday afternoons from August through December will bless the neighborhood with the arrival of 68,500 fanatical football fans.

With the city's General Fund currently bleeding red ink ( $13.5 million for fiscal 2009-2010 ), and projected to lose even more next year, losing property tax revenue from an NFL stadium is contraindicated. Especially in light of the $67 million loss the general fund will already take from a one-team stadium ($31 million loss with the 49ers and Raiders) and the city projecting deficits for the next five years.

Coming soon to a Santa Clara residential neighborhood near you.

City of Santa Clara deficit grows larger

While originaly projected as a $6.7 million deficit when the budget was made for fiscal year 2009/2010 (July 1, 2009 through June 30, 2010), a recent revenue report to the City Council on March 30, 2010, revealed that the deficit for 2009/2010 is now expected to be $13.5 million. The city will need to dip deeper into their capital reserve (also known as the emergency reserve). The capital reserve fund will be down to only $2.5 million after this years withdrawal. A deficit is also projected for the coming years. At the April 27th, 2010 city council meeting, city manager Jennifer Sparacino stated that it was expected that the 2010/2011 budget deficit would be larger than the $13.5 million deficit for the 2009/2010 fiscal year. With the capital reserve fund drained, future deficits will have to be dealt with exclusively via the General Fund - by either cutting expenses and services and/or increasing taxes.

And yet the Stadium Five continues to push for a city subsidized and owned NFL football stadium, which city documents show on page 48 that the General Fund will have $67 million LESS if a stadium is built for the San Francisco 49ers ($31 million less if the Oakland Raiders also use the stadium):

If the issue is jobs - the answer is not a billion dollar NFL football stadium

On the April 25, 2010 Channel ABC News 11:00pm newscast report on the Santa Clara San Francisco 49ers stadium, 49ers point woman Lisa Gillmor was shown saying that it was about "jobs, jobs, jobs". And that the stadium was a great thing for a bad economy. She knows that the 49ers polling shows that this is the biggest reason people are saying they will vote yes on the idea of the city of Santa Clara helping to pay for and then owning an NFL football stadium.

Can you pay the rent on a stadium job? No. Can you make a car payment on a stadium job? No. A stadium job would be less desirable than a job selling Christmas trees - it offers equivalent pay, but less hours. An NFL football stadium is almost never open. And only open a portion of the day on the few days that it is open. It would be used 10 days a year for the San Francisco 49ers and another 10 if the Oakland Raiders come. Throw in a concert, an international soccer game, a monster truck pull, and a Christmas tree lot is still comfortably ahead in hours. When almost a billion dollars is spent you expect some good jobs. Not part-time temporary low wage jobs. Will most of the part-time temporary low wage stadium jobs go to Santa Clarans - the people of the only city paying for the stadium? No, Santa Clara is much smaller than next door neighbor San Jose and is only one city among 15 in Santa Clara County, not to mention other nearby counties. What would Lisa Gillmor say if one of her kids told her they were quitting their full time job or dropping out of college in order to get a new stadium job selling refreshments or taking tickets a couple dozen days a year? Her shriek would be heard as far away as the stadium site - and that's a long way away. None of the current and former politicians cheerleading a new NFL football stadium in the city of Santa Clara live in the neighborhoods near the stadium. The neighborhoods that will be affected by the traffic, the noise, and the tens of thousands of fans celebrating victories and decrying losses after games while leaving a stadium that will not have parking for the vast majority of them.

And the same problems that exist for stadium jobs exist for any jobs created as a result of the stadium - restaurant/bar/hotel - jobs. How many new jobs - that is - how many people would be hired by restaurants, hotels and bars in order to accomodate a stadium that is only open a few dozen days a year? It seems likely that they would just ask some of their staff - many of whom are working part-time already - to work additional hours. Stadium related jobs have an additional problem - anyone flying in to see a 49ers game doesn't have to stay in a Santa Clara hotel. They don't even have to stay in a Santa Clara County hotel. If they are coming to the Bay Area for a weekend, of which only 4 hours will be spent in a Santa Clara San Francisco 49ers stadium, they will likely rent a room near where they will be spending most of their weekend. Downtown San Jose, San Francisco, Santa Cruz, etc. People driving or taking mass transit to the game will have far more choices of restaurants in Mountain View and San Jose than they will in Santa Clara. Which is why stadium proponents will talk about a stadium benefiting the region - since Santa Clara is only a small part of Santa Clara County and the Bay Area. And yet Santa Clara is the only city that will pay for it, the only city that will be responsible for it's expenses, the only city that will have to issue bonds to pay for construction.

Santa Clara Oakland Raiders stadium

Most, if not all of the 49ers supporters who storm Santa Clara city council chambers wearing read and cheerleading for a new city subsidized and owned NFL football stadium seem to think there is only one team in the mix. But, the term sheet mentions a second team in several places, including Section 16 . A second team is also shown on page 48 of the term sheet presentation (the page that shows the city General Fund loses $67 million with a one team stadium and $31 million from a two team stadium). Tim Kawakami of the Mercury News said that from what he has heard the 49ers can't pay for the stadium without the Raiders . And the proposed stadium has large electronic exterior displays that can easily change from week to week - just like the stadium in New Jersey that hosts the Jets and Giants. And yet no one is talking about the Raiders coming to town. Could it be 49ers fans don't to want to share the stadium??

Santa Clara 49ers Stadium leases

40 to 60 year Santa Clara San Francisco 49ers stadium leases

The stadium site (aka ground site) will be owned by the city of Santa Clara, who will lease it to the Santa Clara Stadium Authority under what is called the ground lease in the term sheet. The Santa Clara Stadium Authority will then lease the stadium to the Forty Niners Stadium, LLC, in what the term sheet calls the stadium lease. The Forty Niners Stadium, LLC will lease the stadium to the San Francisco Forty Niners, LTD in what is referred to as the team sublease. At their discretion, Forty Niners Stadium, LLC can also lease the stadium to the Oakland Raiders, the 2nd team sublease.

The Ground Lease, Stadium Lease and Team Sublease all have the same term: 40 years minimum, with 5 options to renew for another 4 years - bringing the maximum lease period to 60 years. Forty Niners Stadium, LLC has the option as to whether they want to exercise a lease extension or terminate the leases. The 2nd Team Sublease, while controlled by the Forty Niners Stadium, LLC, is supposed to be subject to the same terms as the Stadium Lease, but presumably that does not include the 40 year term. Section 16.2 of the term sheet even talks about a temporary 2nd team sublease of up to 3 NFL seasons while the Oakland Raiders wait for a new stadium to be built.

Going from neighbors to roommates??

49ers multi-million dollar stadium campaign paying off - for SCU students and godaddy.com

The San Francisco 49ers and their paid allies have promised a lot of part-time temporary low wage jobs if a stadium is built in Santa Clara, a minority of which would go to Santa Clarans. Well, they don't actually call them part-time temporary low-wage jobs - they refer to them as full-time equivalent jobs. Bundling several dozen part-time temporary jobs into a "full-time equivalent job" is a good tactic, since it avoids pointing out the obvious problem of a stadium with regard to jobs creation - a stadium is almost never open, and only open for a part of the day. And it makes it easier to grossly overstate the amount of jobs. Not to mention that the jobs are at or close to minimum wage. You can't pay the rent on a stadium job. You can't even make a car payment on a stadium job. The math is not pretty: 10 dollars an hour times 5 hours a day, times 20 days a year means a stadium job would end up getting you a total of $1,000.00 for the year. Or looked at another way, a stadium job is equivalent to 2.5 weeks of a fulltime low wage job. Even taking the ridiculously optimistic "vote for it" projection of stadium proponents that the stadium will be open 40 days a year only raises the annual salary to $2,000 and the hours to the equivalent of four weeks of low wage work.

Nevertheless, the "full-time equivalent jobs" have begun (and going to mostly non-Santa Clarans as would happen with stadium jobs) even before the stadium is built. The San Francisco 49ers front group Santa Clarans for Economic Progress have been hiring Santa Clara Univerity students since January to help sell the stadium subsidy and ownership by Santa Clara to Santa Clarans. Their campus ad:

Santa Claran's for Economic Progress

Campaign Internships
We are looking for students who are interested in learning how a local campaign works. Gain valuable experience and network with local activists. Previous campaign experience not required, but highly valued. Requirements include ability to use basic word processing and spreadsheet software, work ethic, and willingness to work outside of normal business hours. Interns will likely spend much of their time talking to the public and must also be flexible in an ever changing environment. Some positions will be mostly in-office, some will require significant time in the field. Please send your resume to mia@scforprogress.com and include: short statement why you'd like to work on this campaign, what you hope to gain from this campaign, your hours of availability (any time between 9am to 10pm, 7 days a week), if you speak any additional languages, and any other info you'd like us to know about you. Interviews will begin soon and applications are excepted on a rolling basis. We expect internships to end around June 10, 2010.

Hopefully none of the SCU student workers are accounting majors, as they will become disenchanted if they see slide 48 prepared by city workers which shows with numbers that the stadium causes the city of Santa Clara to have less money if a stadium is built than if it isn't. And hopefully none are Sociology majors as they will become disenchanted once they see that the stadium is being built right next to a residential neighborhood.

It makes you wonder how much of the millions of dollars from the San Francisco 49ers are being used to hire "precinct walkers" that aren't Santa Clara University students?. We know that the people who collected signatures for the initiative were paid to do so. Are the precinct walkers all hired hands as well? Several million dollars does give you the resources to hire a lot of people. Isn't it strange though - the stadium is such a great deal according to the Stadium Five, and yet the San Francisco 49ers have to spend millions of dollars to get it sold. Since when do great deals have to be hammered down people's throats with lies and false promises?

The millions are trickling down and benefiting others as well - the 49ers front group has been buying and activating some domain names through godaddy.com:

• VoteNoOnJ.com
• VoteNoOnJ.net
• VoteNoOnJ.org

But they did forget this one: VoteNoOnJ.us. By buying up VoteNoOnJ domain names could the San Francisco 49ers be signaling that they realize they would be renting a stadium that has no parking, no BART, and no hope of making payments unless the Oakland Raiders share it - and are thinking about reversing course?

Are you against Santa Clara Measure J (San Francisco 49ers stadium) ?

The San Francisco 49ers are spending millions to convince the voters of the City of Santa Clara to agree to subsidize and own a football stadium for their benefit. Among other things, that buys a lot of lawn signs. If you want to display your opposition to the stadium, Santa Clara Plays Fair has "No On Measure J" signs for you. But since there is no wealthy corporation paying for the signs it would help if you could make a financial donation, either for the yard signs, for the flyers they distribute, or for a campaign mailer they would like to do to get out the truth about the Santa Clara San Francisco 49ers stadium subsidy .

In addition to displaying a lawn sign, you can volunteer to assist them. Help fight the millions of dollars and falsehoods of the San Francisco 49ers and their employees and political allies, by:

• Walking neighborhoods to get the truth out about the stadium subsidy and ownership.
• Host a house party to provide your neighbors and friends with the facts the San Francisco 49ers and Stadium Five don't want them to know about and to counteract the lies being told.
• Write a letter to the editor of the Santa Clara Weekly or San Jose Mercury News.

Top 10 reasons to Vote No on Santa Clara Measure J

The people at Santa Clara Plays Fair along with Will Kennedy and Jamie McLeod have written the top 10 reasons for Santa Clarans to Vote No on Measure J :

---

An Open Letter to Santa Clarans
by City Councilmembers Jamie McLeod and Will Kennedy
and by SantaClaraPlaysFair.org

A major campaign is underway to encourage Santa Clarans to vote for a football stadium (Measure J). We oppose the stadium because we believe that public money should be spent on the public, and any private investment of public money should have a positive return on investment. The following are the top ten reasons why we oppose the 49ers stadium subsidy. An explanation and information source is provided.

Top Ten Reasons Why We Oppose the 49ers Stadium Subsidy

1. Measure J will result in a net $67 million loss to the City's General Fund.
2. Funding for Santa Clara Unified School District comes from the city's Redevelopment Fund, not from the 49ers or the Stadium.
3. Measure J extends the Sweetheart Rent Deal on the 49ers Training Center -- they pay only 1% of what other businesses pay the City.
4. Most Stadium jobs will be part-time and low wage, the construction jobs are temporary and fewer than 7% will go to Santa Clarans.
5. Tax Money will be spent on the stadium, despite the 49er's campaign claims.
6. The Economic Impact of the Stadium is Minimal
7. The 49ers' claim that they will pay operations and maintenance costs has a major loophole.
8. The 49ers can decide to bring in the Oakland Raiders, even if the city opposes it.
9. Measure J will result in $6 million less being spent on affordable housing.
10. Measure J commits the City to a 2-TO-1 LOSS on our Investment.

Jamie Matthews - dishonest San Francisco 49ers shill

Matthews

At the website of the San Francisco 49ers front group Santa Clarans for Economic Progress, Santa Clara city council member Jamie Matthews goes to bat for the City of Santa Clara subsidizing the San Francisco 49ers:
Next to a picture of a broadly smiling Matthews the question is asked:

On the June 8th Stadium vote: Are the Taxpayers at Risk?

Jamie Matthews responds:

"Not at all. The measure's iron-clad language states that there can be NO new city taxes and NO use of the city's general fund for this project. There will be no cost to Santa Clara residents. Period."

Jamie Matthews
Santa Clara City Councilmember

In a presentation given at the June 2nd, 2009 city council meeting by city employees, a Powerpoint slide on page 48 showed a consultant's estimate of how the city's General Fund will do with or without a San Francisco 49ers stadium being subsidized and tax sheltered by the city. With one football team the General Fund will have 67 million dollars less than if a stadium is not built. With two football teams (the Oakland Raiders have made no public statement regarding a willingness to move to Santa Clara) the General Fund will have $31 million less than no stadium. This is due to money destined for the General Fund being diverted from the city's Redevelopment Agency to the stadium. And yet Jamie Matthews claims there is no use of the city's General Fund for the project??

The city of Santa Clara is currently running a deficit and is projected to run a deficit for the next five years. The stadium causes the General Fund to have less money, per a presentation given by city employees, and yet Jamie Matthews claims with surety there won't be any tax increases (or cuts in services - a cost) due to the San Francisco 49ers stadium project??

The Santa Clara NFL football stadium would last for a minimum of 40 years and a maximum of 60 years per the (non-binding) term sheet that has been prepared. The San Francisco 49ers put some of their employees on unpaid leave for a period of time in the summer of 2009 due to financial problems. There is no guarantee that the 49ers will be able to make their lease payment for all 40 years and the lease is not even with the San Francisco 49ers. It is with their firewall affiliate - Forty Niners Stadium, LLC. What if the Forty Niners Stadium, LLC can't make lease payments and the San Francisco 49ers move to the Oakland Colesium? And Forty Niners Stadium, LLC does not pay all the bills of a proposed Santa Clara NFL stadium. They only pay what the term sheet calls reimbursable expenses. The Forty Niners Stadium, LLC is not obligated to pay what the term sheet calls excluded expenses. Excluded expenses include the debt payments of the Santa Clara Stadium Authority. You won't hear about the Santa Clara Stadium Authority debt from Jamie Matthews or the other Santa Clara politicians shilling for the San Francisco 49ers. You won't hear about Stadium Authority debt from the San Francisco 49ers or their front group Santa Clarans for Economic Progress. It is even hidden in the term sheet, being mentioned in some places, and being left off conspicuously in others. What happens if the Santa Clara Stadium Authority can't pay it's debt which it is supposed to finance from stadium naming rights - which have lost favor in recent years and have gone down in amount (the Oakland Colesium hosts two sports teams and currently has no naming rights deal)? It's either bankruptcy or a bail out from the city of Santa Clara General Fund. Would future politicians even consider bankrupcty? It seems a bail out would be their only choice. That would mean a future hit to the General Fund on top of the hit the report presented by city employees already demonstrated. And yet Jamie Matthews claims there is no risk to Santa Clara taxpayers??

The city is using money from it's redevelopment agency, it's utility reserve fund, and from taxes it is collecting from hotels. The total of all stadium construction expenditures by the city (per the non-binding term sheet) is $114 million dollars. And yet Jamie Matthews claims that there is "NO cost to Santa Clara residents. Period." Jamie Matthews is a dishonest San Francisco 49ers shill. Period.

Santa Clara sued over biased stadium ballot wording

A Santa Clara citizen has filed a lawsuit in Santa Clara County Superior Court over the misleading and biased language on the June 10, 2010 special election ballot regarding Measure J - the city of Santa Clara subsidy and ownership of a new San Francisco 49ers NFL football stadium. The city attorney predictably claims the suit is without merit. But clearly a ballot question written by the same politicians who appear on the website of the San Francisco 49ers front group Santa Clarans for Economic Progress shilling for the stadium, and a ballot question that was modified by those same politicians after the San Francisco 49ers front group stormed city council chambers and demanded it be changed, is going to lack objectivity.

Ballot "Question"

What is termed a question is actually a question followed by seven misleading pro-stadium sentences. They separate the original question and the following pro-stadium sentences with semi-colons, allowing the city and the Stadium Five to make a claim that is in fact a "ballot question". Not surprisingly, none of the negatives of the stadium are included in the ballot "question".

Most notably, the ballot question fails to mention the $67 million that the city's General Fund loses if the stadium is contructed versus no construction. This figure is from a report by a consultant hired by the city to study the issue. $98 million that was going to go to the General Fund gets diverted to the stadium. Even adding in the overly optimistic claims that the stadium will make $31 million (the 49ers real estate magnate owner doesn't see the stadium as a profitable enterprise) leaves the General Fund with $67 million less with the stadium, than without. No new taxes, except for those necessary because the General Fund loses $67 million.

Nor does the ballot question mention using $20 million in Utility Emergency Reserve funds to move a utility station to provide a small amount of parking for the stadium. Moving a utility station for NFL football stadium parking is not something that Utiity Emergency Reserve funds are intended for. No new taxes, except for those necessary to replenish $20 million into the Utility Emergency Reserve.

While saying that future city politicians are under no obligation to bail out a money losing Santa Clara Stadium Authority with General Funds, it fails to mention that they not only could do so, but it's almost a given that they would do so. An NFL football stadium is a vanity buy for local politicians and some of their citizens and nothing looks worse than a city owned stadium that some current and past politicians were claiming was a sure thing going bankrupt. No obligation to bail it out, but pretty unthinkable that a bankrupt Santa Clara Stadium Authority would not be bailed out. No new taxes, except for those necessary in the future for a bankrupt Santa Clara Stadium Authority bailout.

The ballot measure mentions additional funds for the hot-button areas of senior, youth, library and recreation (only senior and youth are mentioned in the term sheet) from a 35 cent ticket surcharge on NFL tickets. But the ballot question fails to note how small these payments will be - fixed at a maximum of $250,000 per year, and not adjusted for inflation - ever. The $250,000 a year for 40 years doesn't come close to making up for the $67 million the General Fund loses if the stadium is built (and that is before any Santa Clara Stadium Authority bail out). $250,000 is a tiny fraction of the city's $150.8 million dollar general fund budget for 2009/2010 and the 35 cent ticket surcharge is clearly a political trick. The token payment allows "provides youth and senior money" to be thrown around with abandon by the San Francisco 49ers and the Stadium Five.

San Francisco 49ers continue to try and buy the Santa Clara Measure J election

The San Francisco 49ers via their front group Santa Clarans for Economic Progress, continue to pour money into the Santa Clara Measure J election. And why not spend a few million when you are going to get hundreds of millions from your subsidy city? Their Form 460 for the period 1/1/2010 to 3/17/2010 reveals that the San Francisco 49ers and their firewall entity gave an additional $1,042,037.40 in cash and services to try and buy the June 10, 2010 Measure J election. Bringing their total so far to $1,404,687.65 in less than five months. Again, a little price to pay for getting a small city to take on the financial burden of helping to fund construction and then owning and paying the bills for a money losing NFL stadium for 40 or more years.

Santa Clara councilman Will Kennedy says City loses in 49ers Stadium Deal

Kennedy

In an interview with PublicCEO.com Santa Clara city councilman Will Kennedy explained why the Santa Clara 49ers stadium is a bad investment for the city of Santa Clara. He says "There would be more money in the general fund if we did not build." Will Kennedy, along with Jamie McLeod voted against the Santa Clara 49ers stadium deal on June 2nd, 2009 after the term sheet was presented to the city council, while the Stadium Five voted unanimously for it.

As councilman Kennedy points out, one of the problems of the stadium is that it takes money from the Santa Clara Redevelopment Agency that could have gone to paying back the city's General Fund from money that was borrowed. Kennedy points out that according to a report by a city consultant , the city's General Fund would end up with $98 million if the stadium is not built, versus $31 million if it is built. The stadium causes the city to have less General Fund money - $67 million dollars less. And this figure doesn't include General Fund losses that will take place if a future Santa Clara city council votes to use General Fund money to bail out a bankrupt Santa Clara Stadium Authority.

Another problem with the stadium deal that Will Kennedy points out is that it extends the incredible rent subsidy given to the 49ers for their practice facility out another 40 to 60 years. How much of a subsidy do the San Francisco 49ers get for their 11 acre practice facility? They pay less for 11 acres than it would cost to rent a 4 bedroom house in the same area - $22,000 per year. Per acre the San Francisco 49ers are paying 1 percent as much as what the Hyatt Hotel down the street pays.

Who funds Santa Clarans for Economic Progress?

A required campaign document reveals the truth. The San Francisco 49ers front group Santa Clarans for Economic Progress filed their required Form 460 (Recipient Committee Campaign Statement) with the City of Santa Clara Clerk's Office on 2/1/2010 to detail their contributions and expenditures for 2009. Although they had been touting themselves as a "grassroots organization", the Form 460 revealed that to be a lie. 99.73% of their contributions ( $362,650.25 ) came from the San Francisco 49ers or the 49ers firewall entity Forty Niners Stadium, LLC. Only 13 people living in Santa Clara gave money to the group totaling $725. Four people living outside of Santa Clara contributed an additional $240 dollars and one company in Santa Clara contributed $20. A box labeled "Sponsored" was also checked (there was no box for "front group"). Where the form asked for Committee Name they wrote:

Santa Clarans for Economic Progress, sponsored by and major funding by Forty Niners Stadium, LLC and a coalition of local residents, business owners, retirees, homeowners, civic leaders and native Santa Clarans.

Santa Clarans for Economic Progress Funding

Component	Contributions	Percentage
San Francisco 49ers and Forty Niners Stadium, LLC	$362,650.25	99.73%
coalition of local residents, business owners, retirees, homeowners, civic leaders and native Santa Clarans	$985	0.27%

When you see Santa Clarans for Economic Progress you can substitute San Francisco 49ers. The ballot initiative that the people of Santa Clara are being asked to vote on is an advocacy piece written by the same group that stands to benefit from it - the San Francisco 49ers. The fact that a ballot initiative can be an advocacy piece was one of two reasons the Santa Clara Stadium Five withdrew their own ballot measure (which would have had to have been written in a more objective and truthful way) in deference to the San Francisco 49ers ballot initiative.

While Santa Clara politicians talk about what a great deal owning an NFL football stadium will be, it is important to remember that the San Francisco 49ers have chosen not to own and run an NFL stadium. If football stadiums were profitable enterprises, the billionaire team owners around the country wouldn't bother trying to get local governments to help finance them and run them. They would just finance and run them themselves. And there would be no need for books like Field of Schemes.

Proposed Santa Clara 49ers Pyramid

Why politicians are so anxious to use public funds to subsidize billionaires in the unprofitable enterprise of running a football stadium is partly revealed in the statements "it will put us on the map" (which it doesn't do - the team retains it's name - "San Francisco 49ers") and the phrase that an ex-politician shouted into the public microphone at a Santa Clara city council meeting - "great leaders build!". A football stadium to them is what the Pyramids were to the Pharoahs. A monument to their greatness. But while a Pyramid cost a lot of money to build, it didn't require bonds to be issued with 30 years of interest payment and a lump sum repayment of principle, didn't steal money from the Redevelopment Agency that would have gone to the city General Fund, and they didn't perennially lose money like an NFL football stadium. Wouldn't it be nice if they just built a pyramid? They could call it the Santa Clara San Francisco 49ers Pyramid. It would cost less to build, lose less money, and actually would "put us on the map".

2/10/2010 - Santa Clara City Council backs down to San Francisco 49ers

The San Francisco 49ers and their front group Santa Clarans for Economic Progress stormed Santa Clara city council chambers on Tuesday night, and as expected, the city council caved and rewrote the ballot initiative question. The only surprise was that one of the Stadium Five broke ranks on the issue. Joe Kornder remained uncowed by the San Francisco 49ers and voted along with Jamie McLeod and Will Kennedy against changing language from what three city council members and city employees had come up with.

2/9/2010 - 49ers and their Front Group unhappy and will protest at Council Meeting

Gillmor

The San Francisco 49ers and their front group Santa Clarans for Economic Progress are not happy with how the city wrote their initiative. Pursuant to California Election Code it is the perogative of the city council to write the ballot question rather than the San Francisco 49ers or their front group. But front group spokesperson, ex-politician Lisa Gillmor, says they are not happy with wording regarding money taken from utility funds. The San Jose Mercury News article also complains (presumably due to input from Gillmor) that the initiative doesn't address operating costs. The implication is that it should mention the claim of the 49ers and the city of Santa Clara that there will never be any impact to the city General Fund from the stadium. There have been two firewalls erected to protect both parties - the City of Santa Clara has created the Santa Clara Stadium Authority and the San Francisco 49ers football team has created the Forty Niners Stadium, LLC. The idea is that in the event the NFL football stadium becomes a money loser (a likely event which is why the San Francisco 49ers don't want to own it), the city will be protected as the debts will belong to the Santa Clara Stadium Authority. The Santa Clara Stadium Authority will go bankrupt and the city will be under no obligation to bail them out. But would the Santa Clara politicians allow that? Highly unlikely, just looking at the way the NFL stadium deals are catnip for current politicians like the Stadium Five and ex-politicians like Lisa Gillmor and Pat Kolstad. And given the fact that a stadium bankruptcy would be extremely embarassing, it is almost inconceivable that future Santa Clara politicians would not use money from the General Fund for a stadium bail out.

Dan Walters on Stadiums as Catnip for Politicians

In a Sacramento Bee article, writer Dan Walters makes a case against public subsidy of sports stadiums. Among his comments:

Football and other professional sports are merely entertainment, intrinsically not any more or less so than symphonic, rock or rap music, wrestling, theatrical drama, tractor pulls, opera, cage fighting, action movies or television soap operas.

Nevertheless, politicians and civic boosters across America lust for professional sports teams to call their communities home and are evidently willing to sacrifice more important public services and facilities to build the lavish edifices that team owners demand.

Santa Clara Politicians want Taxpayers to subsidize a new San Francisco 49ers Stadium

The San Francisco 49ers football team of the NFL was formed in 1946 and began playing games in Kezar Stadium in San Francisco's Golden Gate Park. In 1971 the 49ers moved further south in San Francisco to Candletick Park where they continue to play. Proponents for a 49ers stadium in Santa Clara will talk about what a fantastic economic benefit it will be. It is worth noting that no city would have a better idea of what economic benefits come from a 49ers football stadium more than San Francisco with their 63 year tenure hosting the team. And the city of San Francisco is not willing to give the billionaire owners of the 49ers - Denise Debartolo York and her husband John York - what they are asking for. So they have headed south looking to the taxpayers of Santa Clara to contribute to their cause. And they are more in need of a public handout at this point as Forbes reports that Denise Debartolo York just barely missed making their list of the 400 richest Americans this year because some of her real estate stock fell 30%, causing a dip in her net personal net worth to 900 million dollars. Which means that for the time being she is no longer a billionaire. So it's not just tough for the people of Santa Clara these days, even super rich Ohio residents like Denise Debartolo York are seeing a downturn and in need of government help.

49ers Stadium Term Sheet - Stadium Construction Financing and the Firewalls

On June 2, 2009 Santa Clara bureacrats made a Presentation of the 49ers Stadium Term Sheet. Contrary to the way the press reports it, the 49ers/NFL are only putting up 53% - $497 million of the total $937 million. The city and a new entity run by the Santa Clara city council called the Santa Clara Stadium Authority will be reponsible for 47% - $444 million. The Santa Clara Stadium Authority is a firewall erected by the city in the case the NFL stadium deal goes bad. Similarly, the San Francisco 49ers have erected their own firewall to protect themselves in the event stadium losses are too large - the 49ers Stadium Company, LLC.

Mahan

Proponents of the stadium deal, notably Santa Clara Mayor Patricia Mahan, will say how the deal can't fail - the NFL stadium that billionaire Denise Debartolo York chose not to own and run - has to make money. And yet, two new artificial entities have been created to protect the two parties involved in the event their optimistic claims don't come true (and NFL football stadium deals around the country never seem to come close to the projections of politicians and the millionaire team owners who create them). In the event that the Santa Clara San Francisco 49ers stadium deal is a money loser, would the Santa Clara city council allow the Santa Clara Stadium Authority to go bankrupt given how they see it as such a positive image builder for the city? It seems the most likely scenario is that there would be a costly bail out, where city funds would be transferred to keep the stadium solvent.

Ex-Politicians mobilize for San Francisco 49ers to push their Dream Vanity Buy

At the 12/08/2009 Santa Clara city council meeting some ex-politicians and bureaucrats announced they were banding together and calling themselves Santa Clarans for Economic Progress, and with funding from the San Francisco 49ers will work to push a 49ers stadium onto the ballot as an initiative. The ballot initiative will prevent environmental impact lawsuit and can be written as an advocacy piece (versus the original city council ballot measure which would need to have some measure of objectivity) which is why the Santa Clara Stadium Five voted to drop their ballot measure in favor of the initiative pushed by the San Francisco 49ers and their front group. The name chosen by the 49ers front group is especially questionable. If seasonal part-time minimum wage jobs at a stadium are economic progress, times are even tougher than the government is letting on.

The Santa Clara mayor Patricia Mahan is in favor of this initiative by the San Francisco 49ers and was featured in the first mailing by their front group. Regarding the initiative versus the city's own ballot measure, she told the San Jose Mercury News in a December 9, 2009 article:

"It is less susceptible to the legal challenges that way," she said. "When the voters speak, the voters speak. We really just want to make sure it's binding."

The mayor has given one of two reasons that the 49ers have pushed their own initiative over the city council's ballot measure - people negatively impacted by an initiative - the people of 95054 where the stadium will be built - have no legal recourse. With the city's ballot measure they would have. And that's also why five of the Santa Clara politicians retracted their measure. They are so anxious to have the taxpayers of the city subsidize the stadium that they don't want to allow the citizens any legal recourse. It is not cleaner getting it to a vote, in fact the initiative requires signature gathering. But an initiative removes the possibility of legal challenges based on negative environmental impact. The stadium wouldn't be going in Patricia Mahan's neighorhood, nor the neighborhood of any other city council member, such as the most rabid of the taxpayer subsidized stadium proponents, Kevin Moore. Six live in the 95050 zip code and one in 95051. The stadium will be built and operated in 95054.

A Small City Overtaxing Itself for the Pleasure of Politicians and Top Bureaucrats

Lodge

From a May 19, 2009 San Francisco Chronicle article:
Santa Clara Police Chief Stephen Lodge says his department's force of 147 officers won't be adequate on game days, with more than 68,000 people descending on a city of 114,000.

Lodge estimates he'll need at least 160 officers on game days and has proposed creating a pool of available officers from nearby agencies that he can draw from.

Long History of Santa Clarans Subsidizing 49ers

Since 1987 the San Francisco 49ers headquarters and training facility have been at 4949 Centennial Blvd., Santa Clara, CA, 95054-1229. The team makes a token payment to the City of Santa Clara for the 11 acre site. The people of Santa Clara are being asked to subsize the super rich owner of the 49ers for a new stadium, but they have been subsidizing this and previous super rich owners for years via the sweetheart deal for the training facility. The 49ers pay $23,000 a year for 11 acres of prime Silicon Valley real estate. The San Francisco 49ers pay less rent for 11 acres than people in the valley are paying to rent a house. And this sweetheart deal is locked in till 2042! For comparison, the Hyatt down the street rents 6 acres for $1,400,000 dollars a year. Techmart pays $1,000,000 for less than 4 acres. What does Santa Clara gain from having a 49ers practice facility that can possibly justify this massive subsidy?

Traffic Nightmare

The Santa Clara San Francisco 49ers Stadium site does not have any room to provide the normal parking for a football game which will attract 68,500 fans. It's a 17 acre site with a 14 acre building being proposed for it. A football stadium requires a massive parking lot. The City of Santa Clara and the 49ers are hoping that people will take mass transit to the games, using AT&T Park in San Francisco as a model. Unfortunately, there is no BART to Santa Clara. Additionally, 49ers games will get twice the attendance that a baseball game gets. Stadium supporters point to the nearby VTA Light Rail station and Amtrak Capitol Corridor train station as what people will take to the games. The current light rail service runs every half hour on Sundays. Current Amtrak service runs two trains on Sunday that would get people to the games - one arrives in Santa Clara at 8:26am and the other at 10:26am. The next train doesn't arrive until after game time - 1:25pm. Both Amtrak and VTA can add more runs on 49ers game days, but will they be able to add enough to handle a huge football crowd? Light rail cars are limited in length and only go 35 miles an hour and even slower around turns. They have to stop for some traffic lights. And what about non-NFL events?

Even with the most optimistic projections of mass transit ridership there will be terrible traffic jams. Shorline Amphitheater in Mountain View has a capacity of 22,000 and generates terrible traffic jams north of 101 on concert days. The Santa Clara 49ers Stadium Environmental Impact Report says that things are fine as long as the area can be cleared within two hours. Terrible traffic jams right where people live. Not where the city council lives. Not where the people in the San Francisco 49ers front group live. Not where the management or players of the San Francisco 49ers live. But right where good Santa Clarans live.

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