Stadium Authority Final Development Budget - 3/13/2012

At CloseAt DDAKey DifferencesComments
Construction cost per Design
Build Agreement (DBA)
(incl. 130M of Stadco cost*)
Other Development cost
(incl. $25M of Stadco cost*)
Subtotal$1.049B1.020BUp $29MReflects DBA and increase in design/etc.
Construction finance issuance/
interest cost
$78M$75MUp $3MRefined data
$1.127B$1.095BUp $32M
Technology Allowances and
Owner contingency
$50MNot quantifiedUp $50M Owner allowance for technology upgrades and additional development costs
Final Development Budget$1.177B$1.095BUp $82M
Stadco Cost$155M
Stadium Authority Cost$1.022B

*Stadco costs were estimated at $150M at DDA ($125M construction + $25M other costs)

Stadium Authority Construction Finance Sources - 3/13/2012

Sources to Fund Development Budget At Close At DDA Comments
Tenant Costs paid by Stadco (NFL) $155M$150M
Stadco Advances/CFD Repays$35M *From hotel tax only; repay or pay debt service on CFD BAN
Stadco Advances/RDA Repays$30M*If available, repay from RDA funds only
RDA funds$10M*
Total from above sources$230M$150M
Remainder to Fund from Sources Below
($1,177 - $230 = $947)
SA Loan from Lenders/FinanceCo$450M$450MTo be replaced by Bank/Bond net take out finance of
$320M and additional consruction period revenues
SA Subordinated Loan from Stadco$335M$400MStadco Loan could be up to $497M ($500M) but SA
has significant payback protections
Subtotal Debt$785M$850M
Projected construction period revenues$162M$20MNot guaranteed but supported by results to date.
Stadco Loan funds any shortfall.

* CFD and RDA funds of $35M and $40M respectively were noted as fund sources but not as offset to SA borrowing requirement, and DDA Budget did not include construction finance and owner contingency

Santa Clara 49ers Stadium leases

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

Santa Clara 49ers stadium leases diagram 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.

Santa Clara Stadium Authority - The Stadium Deal Firewall

In case of, or more likely in anticipation of, the Santa Clara San Francisco 49ers Stadium becoming a money loser, as has happened with stadiums all around the country, the city of Santa Clara leadership is planning to erect a firewall to prevent them from being liable for the debts of a stadium that can't pay its bills. The firewall is called the Santa Clara Stadium Authority. It is termed a joint powers authority. A joint powers authority must be formed from two or more entities and as a partner the city has chosen its own Redevelopment Agency (officially an agency of the state of California although run by Santa Clara politicians and bureaucrats). The same players will be the head of the Santa Clara Stadium Authority that are the head of the city itself, the city council and the city manager and city attorney. In order to limit their liability in the case of a money losing stadium, the San Francisco 49ers are creating a firewall as well - the Forty Niners Stadium, LLC (Limited Liability Corporation). So if you hear anyone saying that the Santa Clara San Francisco 49ers Stadium deal is a can't miss proposition, ask them why both parties involved created new entities to protect themselves from losses.

Patricia MahanMahan

Two new firewall entities also makes the statement of Mayor Patricia Mahan at the June 2nd, 2009 city council meeting rather suspect:

"I have no fears that going forward this project will be a tremendous success"


As it is only created for legal protection, the Santa Clara Stadium Authority only exists in an abstract sense. The people making decisions for the Stadium Authority are the exact same people who make decisions for the City of Santa Clara. And they make those decisions in the same offices and meeting rooms that they use for City of Santa Clara business. Although when they work on Stadium Authority matters, they do change their title:

PersonCity of Santa ClaraStadium Authority
Jennifer SparacinoCity ManagerExecutive Director
Richard E. Nosky Jr.City AttorneyGeneral Counsel
Rod Diridon Jr.City Clerk/City AuditorSecretary
Will KennedyCouncilmemberBoardmember
Jamie McLeodCouncilmemberBoardmember
Jamie MatthewsMayorChairperson
Kevin MooreCouncilmemberBoardmember
Patrick KolstadCouncilmemberBoardmember
Lisa GillmorCouncilmemberBoardmember
Patty MahanCouncilmemberBoardmember
Gary AmelingDirector of FinanceFinance Director/Treasurer/Auditor
Alan KurotoriAssistant City ManagerAssistant Executive Director
Carol McCarthyAssistant City ManagerAssistant Executive Director

Post Election - The Deal Changes, The Debt Rises

While most 49ers stadium propaganda that flooded Santa Clara mailboxes didn't even mention Stadium Authority debt, the term sheet that was placed in the June 8th, 2010 ballot (a non-binding document) did mention $330 million worth of Stadium Authority debt. However, after a year and a half of negotiations between the 49ers and the City of Santa Clara, the Stadium Authority debt changed to $850 million dollars.

As Voted On - June 8, 2010 - The Hidden Component - Responsibile for Raising $330 million

It has been the practice of the Bay Area newspapers to report the 49ers stadium deal as the city putting up $114 million of a $937 million stadium and then the 49ers putting up the rest making Santa Clara's contribution only 12% of the total, and the 49ers contribution 88% of the total. The ballot question written by Jamie Matthews gives the same impression as does the plethora of propaganda that has been sent out by the 49ers. The truth is that the San Francisco 49ers and the NFL will supply $493 million, only 53% of the total $937 million in total financing as shown on the 49ers Stadium Term Sheet. That leaves $444 million ($47%) to be contributed by the city of Santa Clara. Santa Clara San Francisco 49ers stadium funding pie chart

It is proposed that $330 million of this $444 million will come from the Santa Clara Stadium Authority. As is typical of this project that the Santa Clara Stadium Five are trying to force on the public, there appears to be some shenanigans going on regarding this source of funding. The 49ers Stadium Term Sheet lists the following sources as how the Stadium Authority will come up with $330 million:

Santa Clara Stadium Authority Funding Sources Listed on the stadium term sheet balance sheet
Funding SourceAmount ExpectedFrequency
Naming RightsNo amount givenyearly
Ticket Surcharge Financing No amount given per event (after construction)
Stadium Builders LicensesNo amount given one time
Corporate Founding PartnersNo amount givenunknown
Concessionaire EquityNo amount given unknown
Pouring RightsNo amount givenpresumed yearly

While a ticket surcharge may provide funding down the road for the Stadium Authority, it clearly doesn't provide any funding for the construction of the stadium. What is missing from this list of sources of $330 million is the amount that they expect to get from each. Naming rights are yearly payments and the only figure easily found. They range from under a million dollars to as high as 20 million dollars a year. But that still leaves the city far short as they can't expect more than 1 years payment before the stadium is built. If the total of all sources doesn't add up to $330 million - which is likely the reason the numbers are left off in the first place - then the city (Stadium Authority) has to issue bonds to pay for the stadium. But bonds are not mentioned on the term sheet balance sheet for Stadium Authority funding sources?? (They do manage to show there will be bonds in Article 12 - Excluded Expenses). Will the stadium make money? Will it make enough money to pay off the bonds? Will the politicians of Santa Clara allow the stadium to go into bankruptcy if the bills can't be paid and the 49ers are tapped out? It is clear how excited most of the city politicans are - both past and present - by the idea of a 49ers football stadium. Not to mention the embarassment and bad publicity a Santa Clara Stadium Authority bankrupcty would bring the city, it is easy to see a future city council breeching the firewall and electing to use city General Funds or issuing costly bonds that will ultimately impact the general fund, to bail out the Santa Clara Stadium Authority.

Santa Clara Stadium Authority Resolutions

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

Lloyd LaCuesta head shotLaQuesta

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.