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City Desk: June 10, 2015

Council Extends Convention Center Funding Through June 2016

Santa Clara officials are optimistic that there’s an avenue to retaining ownership of the Santa Clara Convention Center. A Sacramento Superior Court judge ruled last December that the property was an asset of the former redevelopment agency (RDA) and ownership had to be turned over to the RDA dissolution “Successor Agency,” (the entity created to discharge RDA debts and dispose of all RDA assets).

At a special closed session meeting on June 2, the Santa Clara City Council voted unanimously to continue funding the Santa Clara Convention Center another year, until June 30, 2016. The principle reason, according to Mayor Jamie Matthews, was to ensure there was no disruption to business that has already been booked by the Santa Clara Chamber of Commerce/Convention Center & Visitors Bureau, which operates the convention center, as well as to maintain the flow of future business.

The agreement ends in June 2016 unless the City is able to retain ownership and the Council then approves continuing the contract. If the City losses ownership, and has to turn it over to the Successor Agency, the Chamber will get 30 days notice of contract termination. The City will also ensure the Chamber is compensated for any damages for “bookings made impossible” by early contract termination, according to the City’s June 4 letter to the Chamber.

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The City is currently awaiting a final decision on its cross-petition (asking for a rehearing). The judge’s preliminary ruling rejected the City’s arguments that real estate the Santa Clara RDA held the title to was actually owned by the City.

In Convention Center Dispute, Santa Clara’s Supervisor Talks to Everyone But Voters

Santa Clara’s representative on the County Board of Supervisors, Ken Yeager, will likely greet the extension of City funding the same way he greeted the City’s previous one continuing Convention Center funding through this month: “Best of all worlds,” he told County Executive Jeffrey Smith in an email after being informed of the City’s decision. Smith’s assessment was “…nothing more for us to do.” The WEEKLY obtained the email correspondence concerning the Convention Center under a California Public Records Act request.

Yeager has been largely MIA on the RDA dissolution mess, at least as far as his constituents are concerned. There is no mention of it on his webpage.

Constituents writing to Yeager about the Convention Center “clawback” get a form letter reply – composed by his staffers, judging from the email record – beginning, “Despite reports you may have seen to the contrary, the City of Santa Clara has not been denied an opportunity to buy the property, nor is the property in imminent danger of being sold to the highest bidder,” and concluding “…it is my sincere hope that the City will bid on and purchase the Convention Center property from the Successor Agency, once the process moves forward.”

Other email correspondence is more specific about what the County might expect in a bid for the Convention Center property.

On Feb. 25 Megan Doyle – Yeager’s former policy aide and current BoS Clerk – emailed Deputy County Executive James Williams to ask, “can’t the City buy it back? But it would be at fair market value, yes?”

Williams replied, “Yes, they can. And, yes, it would be at fair market value. This is a side-show. We’re not even at the stage to consider how to sell the property-they have yet to even transfer title back to the Successor Agency.” “Excellent points. Thanks!” answered Yeager.

Despite his public communications, Yeager closely follows – and distributes – news reports about the Convention Center dispute. An ABC7 story on March 5, “Possible Santa Clara layoffs put cloud over Super Bowl 50 plans,” drew the response of “Geez” from Yeager, while he replied “What a mess” to a Santa Clara WEEKLY story on the same day.

Other parties with an interest in the Convention Center get more personal attention from Yeager.

Yeager met with 49ers Manager of Government Affairs Rahul Chandhok in February. On Feb 12, when the subject of the Convention Center ownership first “came up,” Doyle emailed Chandhok, saying “Ken was thinking it would be a good thing to schedule a meeting … to update Rahul on the current redevelopment dissolution issues.”

Chandhok replied he would “love to learn more about the RDA issue,” and Deputy County Executive Williams “would be one of the best if not the best people to chat with.” He also added an invitation to visit Levi’s Stadium to see the ice being formed for the Feb. 21 Sharks game. Yeager and Chandhok met again on Feb. 20.

In March, County Executive Jeffrey Smith met with former Chamber of Commerce President Steve Van Dorn and Convention Center GM Lisa Moreno to discuss a possible deal – reportedly without the Santa Clara City Manager’s knowledge – whereby the Chamber of Commerce would continue to operate the Convention Center for the County; leading Moreno to believe, according to her March 12 email, the County was “willing to help fund the Center,” take “care of our operational needs” and “help support setting up the cash flow system.”

Van Dorn emailed Yeager on March 13 to “personally thank you for your help in supporting us thru this transition with the City and Oversight Board. Our entire team is eager to work with the County in hammering out the details as soon as possible.”

Smith wrote back, “My commitment is to explore the available options to see what support we can appropriately provide the Chamber … I cannot guarantee that the BOS will support any given plan. However, I do think it is reasonable for us to try to put a proposal together.” That, according to Moreno, was the last communication on the subject.

The County has been doing other research. At the same time the Supervisors reviewed an operating report about the Santa Clara County Fairgrounds from Chicago-based C.H. Johnson Consulting – a real estate consulting firm specializing in tourism, sports and convention centers – they also asked Johnson for a cursory review of the Convention Center.*

The results were reported to Santa Clara County Senior Facilities Architect David Barry. So far the WEEKLY hasn’t received a response from BoS Pres. Dave Cortese’s office about this report.

Among his observations, consultant Ryan Johnson reported, “If it were up to the CVB [Convention Center and Visitors Bureau], the Center is too small. They would scrape it and start over. They believe it is missing its intended role- it focuses on Social, Military, Educational, Religious, Fraternal and ethnic (SMERFE) events, Mom and Pop consumer shows and not-for-profit events.” The County holds many events at the SCCC; which, presumably, contribute to the missed moneymaking opportunities.

Johnson also provided Barry with a copy of its analysis and recommendations for a proposed urban village surrounding the new Vikings Stadium in Minneapolis, and a concluding note, “there is a life for a convention center, even if a stadium is built near by. It just needs to be the right product.”

*Johnson’s review of Fairground operations concluded that its management struggled against deteriorated infrastructure, previous failed redevelopment efforts, short-term management contracts, “a Board structure that does not reflect the broad cross-section of the modern economy and is without strategic direction from the BoS or a source of dedicated funding for capital projects.” A public benefit non-profit corporation created by the BoS operates the Fairgrounds.

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