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49ers Answer City Council’s Charge of “Potential Breaches”

With a 10-page letter detailing compliance with contract terms and linking to relevant documents and Council meeting agenda reports, yesterday the San Francisco 49ers fired back at the Santa Clara City Council’s Nov. 23 two-page letter suggesting “potential breaches” of the Levi’s Stadium management contract. The Council’s letter listed 15 general stadium contract requirements, describing no specific breaches or failures to comply with those terms.

The 49ers also requested estoppel certificates – a legal request to stop someone from asserting something contrary to what was implied or agreed to by previous actions, statements or judicial decisions. The City Council is being asked to acknowledge – certify – that the contracts it approved in 2012, 2013 and 2014 are valid and that the 49ers aren’t in breach of them.

“There is no breach of the Management Agreement and the Stadium Authority [board] apparently agrees with that view, based on the content of their letter to us,” the 49ers organization said in a statement Tuesday.


“While the Mayor made a big deal of sending a ‘notice’ to our Management Company, the so-called “notice” did not identify a single breach of the Agreement – because there are none to identify,” the statement continued.

“The Board’s letter was nothing more than a list of the requirements of the Stadium Manager under the Management Agreement, many of which were required to be completed, and were completed, before the stadium opened more than two years ago.

“The rest were completed as required and as agreed to previously by the Stadium Manager and the Authority” whose “own staff confirmed the fulfillment of all requirements” during the Nov. 22 Council meeting.

“Last Friday myself, the [Santa Clara] Finance Director and the Counsel for the Stadium Authority, the City Attorney, went to ManCo’s headquarters,” said Acting Santa Clara City Manager Rajeev Batra on Nov. 22 (1:22). “The intent was to make sure that everything required under the management agreement for the stadium, whether that exists or not… I am certifying to you that those 15 items do exist.”

As a party to binding legal agreements about the management, operation and finances of Levi’s Stadium, 49ers General Counsel Hannah Gordon wrote in the 49ers Dec. 6 letter, the Santa Clara Stadium Authority Board’s members “are not free to conduct themselves contrary to the terms of those agreements, to broadcast knowingly false accusations that StadCo [the 49ers stadium company] and the Manager are in breach, or to take actions calculated to undermine the stability and value of these contracts. They have, however, done all these things, and they seem intent on continuing to do so.”

The Council can’t unilaterally consent of at least two of the three parties to the management agreement – the Santa Clara Stadium Authority, StadCo ManCo and the SA – is required to terminate the management agreement per section 11 of the contract, City Attorney Ren Nosky told the Council at its Nov. 15 meeting (3:41).

“There’s been a lot of references to 30 day notices. If we think there’s … an obligation the management company is not providing, under the agreement scenario … they have 30 days to [begin to] cure that. If the information isn’t provided we move to the dispute resolution process” which, in any case, “doesn’t start until we give notice of what information we believe is deficient.”

Stadium management disputes that can’t be resolved could ultimately end up in litigation. Currently Santa Clara is embroiled in two lawsuits with San Jose about development projects, a possible California Voting Rights Act lawsuit, and arbitration – essentially litigation outside the public courts – over Levi’s Stadium facilities rent.

Last summer the Santa Clara City Council/Stadium Authority launched a performance review of its compliance with the provisions of the ballot measure approving the construction of Levi’s Stadium.

In the months running up to the November election, the review expanded into Council allegations that the management company wasn’t complying with contract terms and demands to provide written details on-NFL event deals to Council Members – information that could chill promoter bookings at Levi’s Stadium, as well as being very valuable to competitors for these bookings.

Reduced bookings would reduce ticket fee, performance rent, and sales and hotel tax revenue for Santa Clara’s general fund.


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