The Santa Clara Stadium Authority Board has taken the first step in preventing the Forty Niners Management Company (ManCo) from entering into contracts for work to be done at Levi’s Stadium.
At its Tuesday night meeting, the Board authorized the Executive Director and Stadium Authority Counsel to bring back paperwork that would stymie ManCo’s ability to authorize public works projects at the stadium. The decision came after the Board learned of a $600,000 contract for floor work that, Stadium Authority Counsel Brian Doyle said, did not adhere to prevailing wage law.
The Board had already put its foot down on contracts, refusing to pay for work unless ManCo can provide adequate documentation, but it now plans to revoke ManCo’s authority to put contracts out to bid. Doyle also already issued a notice of breach of contract to ManCo on March 21.
ManCo, Doyle argued, has been derelict in its duties, opening the City to “grave” liability by not adhering to prevailing wage law. He called ManCo “recalcitrant” and repeatedly characterized its management as “incompetent”
“It is not some paperwork problem. This is a wholesale failure,” he said, later adding, “At this point there is no evidence they know what they are doing.”
In an email exchange, ManCo’s attorney, Jonathan Bass, told Doyle that ManCo “has every intention of continuing to perform its obligations under the Management Agreement (sic).”
Bass went on to write that he believes ManCo adhered to California labor law, but that if “there was an inadvertent failure to ensure strict compliance with the relevant procurement processes,” ManCo would work with the City to “ensure compliance in the future.”
However, Doyle claims ManCo and its attorneys don’t understand ManCo’s duties or labor law, adding that they seem to think that “not picking up people at Home Depot is prevailing wage.”
An audit of stadium contracts is already underway, said Executive Director Deanna Santana.
Once the Board approves the documents that would cripple ManCo’s ability to authorize public works contracts, City employees would assume that mantle, Santana said. Doing so, she said, will cause the City to deviate significantly from its work plan. A budget amendment will also likely become necessary, she added.
The City plans to seek damages from ManCo to recover any losses, including legal fees, Doyle said.
“This is tremendous mismanagement,” said Chairperson Lisa Gillmor.
Nobody from ManCo was present at the meeting.
Three Issues Still Unresolved
Criticism of ManCo was already underway before Doyle began lobbing accusations that ManCo had breached its contract.
During the item that preceded the discussion, Santana had detailed the status of three inquiries to ManCo in another informational report. In each of these items, she said, the “quality of thoroughness fell short.”
The first was regarding the price of parking. The inquiry was part of the ongoing tension surrounding attendees’ parking in the neighborhoods adjacent to Levi’s Stadium, something for which the Board blames ManCo.
ManCo claims that lowering parking costs would “not have the desired outcome,” something that Santana said is ambiguous since ManCo did not illuminate what the “desired outcome” is.
Gillmor said something has to be done to ameliorate the parking situation near the stadium since development in that area will soon eliminate parking spaces, creating a “parking crunch.”
Another point of contention was a suite of premium on-field seats. Santana said ManCo claimed the seats would be temporary but has been marketing them as available for subsequent seasons, which Santana argued should require them to have stadium builder licenses (SBLs) attached to them. The City gets a portion of SBL revenue.
The City has removed the seats and refused to issue permits for them until it sees proper documentation detailing how much money the seats bring into the stadium.
Finally, Santana said she was unable to learn pertinent details about the Taylor Swift concert. Adding a second day of the concert, with some 21,000 giveaway tickets, caused the concert to lose roughly $2 million.
The main dispute was whether ManCo owed the City $4 for each ticket given away. The agreement stipulates that the $4 surcharge is added to tickets “sold or made available to the general public.”
However, ManCo claims the giveaway tickets were given to a “targeted” group, not the general public, something Doyle disputed.
Kirk Vartan, a San Jose resident, was the only member of the public in attendance. He commented on each item, iterating that it seemed to him ManCo has a “lack of trust,” a “lack of goodwill” and acts in “constant bad faith.”
Gillmor said the lack of information regarding these items was “disturbing.”
“They do not have the experience to manage the stadium,” she said.