The Silicon Valley Voice

Power To Your Voice

City Observer: March 30, 2016

A notable absence from the March 22 Santa Clara City Council meeting was any mention of the new soccer park turf, installed by the NFL and the 49ers. The fields are now in better condition than they were last November, before the Super Bowl.

Stadium Rent Goes to Mediation

At the seven-hour meeting, the Council decided to punt the question of the stadium facility rent to an outside mediator. If no agreement is reached in 15 days, an outside arbitrator will make the decision.

The Council didn’t appear to know when or how the rent was actually paid. Section 6.1.4 of the lease says, “The timing of Tenant’s [49ers] payment of Facility Rent for each Lease Year shall be reasonably determined by Landlord and Tenant based on the projected revenue requirements for the operation of the Stadium as set forth in the Annual Stadium Authority Budget.”


“Rent checks are never made,” explained 48ers attorney Harry O’Brien. “Both the Stadium Authority and Stadco revenue accounts are pledged accounts. They are in the control of our lenders. When either needs to make payments to third parties, the money is released to the Stadium Authority and Stadco for those operating expenses. There’s no check that’s written from Stadco to the Stadium Authority. And because there were ample funds in the Stadium Authority account, in accordance with our lease, we determined that no further money needed to be transferred until the end of the [fiscal] year when the mandatory pre-payments were made.”

“So in essence you’ve reset your own rent,” said Mayor Lisa Gillmor. “Why is there a process in the lease agreement?”

“By the terms of the approved lease, we’re not required to make monthly payments on a specific schedule. We’re required to make monthly payments as they’re required to pay the Stadium Authority’s expenses.”

“Has $24.5 been for 2016 has been transferred to the Stadium Authority?” asked Gillmor. It would be paid that week, replied O’Brien. He also explained that the money would go into the restricted lender account.

Gadfly Debra Bress didn’t miss the opportunity to get in some digs at her favorite target, the 49ers.

“I guess the 49ers must be a really bad financial way cuz I look at this and I feel like they’re peeking up somebody’s skirt. …These numbers are just mickey math. We’re just cooking the books on how they’re going get it done. Who came up with these numbers? Why is the ground rent now an operating expense? The fact that we get these numbers now, we get charts that we can’t even read.

“If these numbers have been given to someone in the Stadium Authority, they’ve been given to the wrong end of the horse,” she continued. These numbers are ridiculous. They’re pulling these numbers out of thin air. I just found an exhibit J that says we’re supposed to be getting $30 million a year…If they can’t afford it, and they’re paying more than anyone else, BFD. Who cares? If they can’t afford it, leave. You don’t get the gold and we don’t get it in the end zone any more. Pay your fair share –”

“Thank you Miss Bress,” interrupted Mayor Gillmor.

“I don’t think the numbers are being pulled out of the air,” said Council Member Teresa O’Neill. “But this is the most circuitous path in calculating things. I get the concept. When I read these documents when I came on the Council, I didn’t realize these numbers were setting a cap, not a floor.

“The Council has just learned the extent of this change and the complexity of these calculations,” she continued. “It’s not one-sided – one side or the other can’t impose a change. I think right now I have [such] a level of uncertainty with all the data that has come in that I cannot with a conscience say that this is the right decision to make for our community for the next 40 years.” In making the motion to bring in a mediator, O’Neill also noted that the agenda reports on the City’s website aren’t current and don’t include the final lease agreements.

“I know first hand the amazing work the Niners have done, for our youth, how they’ve empowered females, how they’ve opened up opportunities in our community,” said Council Member Dominic Caserta. “But I also think the Niners need to do a better job of getting that [message] consistently to our residents.” The notion the team was getting a free ride made an easy storyline and headline material for bloggers and media outlets that measure their success by views and clicks, he said.

“However I think the motion [for mediation] is a sober one” and he was going to support it, Caserta continued. “I think it gives us time to get more information. I encourage the 49ers to continue to do their great work and do a better job of communicating it. I know what you do and I’m saddened not to see it enunciated more consistently.”

City May Buy Historic Morse Mansion

At its March 22 closed session, the Council discussed the opportunity it currently has to buy the Morse Mansion. The owner, Myron Von Raesfeld, has offered the City first right of refusal. The Mansion is on the historic register and currently occupied by a sorority.

“I fervently hope that the Council will take advantage of this opportunity to acquire the most significant historic property in our city,” former Mayor Patricia Mahan wrote to the Council.

“This is ‘The House That Seeds Built’ and represents not just our famed agricultural beginnings as a town, but also the global influence of Victorian Santa Clara, which was part of a world-wide economy at the turn of the century. Seeds grown here by C.C. Morse were shipped around the world…

“The house is a symbol of Santa Clara’s importance in yesteryear, no less than the Santa Clara of today, as the Center of Silicon Valley,” Mahan continued. “If there was ever a Gordon Moore of agriculture, C.C. Morse was it …It deserves to be put on public display in a way that makes it accessible for all to appreciate and enjoy.”

In other Business

The Council unanimously approved a Parcel Map subdividing the 5-acre parcel at 5403 Stevens Creek (Apple building and the IHOP restaurant) into two. The project was approved in 2012 for two six-story buildings, and mitigations for the fully developed project were part of the first phase. IHOP fans shouldn’t worry. The restaurant is moving to a new location. Construction is expected to begin in April 2016.

The Council also continued an item allowing AllVision to construct two new digital billboards on city-owned land near 101. Last year the Council approved a 25-year contract with AllVision to be both the developer and broker of new digital billboards. “Where we are is where we were a year ago,” said Gillmor. “I see a lot of flaws in this. That’s why I wanted a broker, not a broker developer.”

Last year when the contract was approved, there was controversy over hiring the broker-developer that would handle construction, operation and advertising sales, rather than simply a third-party advertising broker. At the time, Gillmor and Council Member Debi Davis voted against approval.

In a study session, the Council reviewed infrastructure needs and 2016-17 budget goals, which we’ll look at next week.


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