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Mayor’s Threat to Take Over Levi’s Stadium Empty Bluster

Mayor Lisa Gillmor is threatening to “take over” the management of Levi’s Stadium because, she claims, the 49ers are refusing to supply documentation to her Measure J Audit Committee. She told NBC Bay Area Monday that “city leaders were prepared to manage Levi’s Stadium.”

This is a hollow threat on the Mayor’s part.

Even if Santa Clara had major league sports and entertainment venue management experience on staff or sitting on its part-time City Council and volunteer commissions, the city can’t unilaterally evict 49ers, as the 2012 stadium lease shows.

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To be evicted, the team would have to fail to pay the rent, go bankrupt, or fail to perform the explicitly stated terms of the agreement – for example, not holding football games – and fail to undertake a remedy within 30 days. At that point, the matter would go to the “dispute resolution process” – private arbitration – until a “non-appealable” judgment is arrived at.

The City Council has been in arbitration with the 49ers for about six months over the facility rent, and there has been no public information about that proceeding nor resolution.

Since last spring, Gillmor has been on a crusade to prove that city operating funds have been used to pay stadium bills.

“The Mayor’s accusations that money is going from the City’s General Fund into the stadium are false and irresponsible,” the 49ers said in a statement.

“As the Mayor surely knows, since she voted for the agreements, the stadium does not use general fund money. In fact, funds are flowing into the General Fund from the stadium.”

Over the last year Gillmor has made a series of unsubstantiated allegations against the NFL team, making her inflammatory claims in front of news cameras and only allowing favored reporters access.

Gillmor has insinuated that general fund money is “bleeding” into the stadium because the police and finance departments are colluding with the team to under-report stadium hours and misrepresent stadium financials – thus creating a false basis for setting the stadium rent.

She’s also insinuated that alcohol sales policies are lax in order to boost beer sales, and that the team is inundating the election with “dark money” in pursuit of a master plan to “take over” the youth soccer park for a parking lot and turn the city into a company town. No proof has been presented publically to support any of these extreme allegations.

The documents that Gillmor wants to make public are the cost and income statements for individual non-NFL events. These provide basis for stadium operation, maintenance, shared expense and public safety budgets. The event-specific numbers roll up into the numbers that are used in the budgets.

Although the detail information is not required by approved by the 2012 contract, Monday night the 49ers sent those documents to the city, in the format requested.

Making event-by-event financial information publically available could be counter-productive for the city in the long run. Promoters looking to book Levi’s Stadium will know what the Stadium Authority’s – i.e. the city’s – margin is on each event and will negotiate accordingly. The end result could be a drop in profit and a corresponding drop in the City’s revenue from the stadium. The Mayor already has visibility of the profitability of each event, said 49ers President Al Guido.

Gillmor also claims that the city is paying for field replacement at the stadium. That’s untrue, said the 49ers. The team pays for all the sod put down for 49ers games, said Guido, and the cost of sod replacement for other events is included in events costs, which are subtracted from the event revenue, he said.

Here’s how the 49ers have performed in managing Levi’s Stadium in its first two years, shown by Stadium Authority financial reports posted on santaclaraca.gov.

  • Reduced total debt by $200 million, significantly more than projected in 2012
  • Increased the stadium discretionary fund by $2 million
  • Increased Stadium Authority cash reserves by $16 million
  • Produced $2 million in fees for the city
  • Added over $5 million to the city’s general fund
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