The Santa Clara Stadium Authority (SCSA) approved its annual budget — with the exception of a hefty line item for previously contested office space.
After a study session where $620,000 for office space rental for the Forty-Niners Management Company (ManCo) — the entity that manages non-NFL events for the stadium authority — was at issue, city employees returned with a budget that excluded the expense.
“We do not believe that is an appropriate charge and are not recommending it to you for approval, ” said City Manager Jovan Grogan.
The heart of the issue was that the Forty-Niners Stadium Company (StadCo) — the company that manages NFL events — opted to discontinue use of “tenant exclusive” space for ManCo operations.
StadCo wanted to move operations offsite, charging the SCSA for the expense. Grogan said the SCSA cannot force StadCo to continue using “tenant exclusive” space for ManCo offices.
“Our ability to dictate how they use their tenant-exclusive space is limited,” Grogan said. “The Forty-Niners, as a business entity, have decided to lease corporate offices at different locations for many of their entities, including ManCo and StadCo.”
However, Grogan said, the stadium employees remained firm that the cost of the new office space is not one the SCSA should bear.
Regardless of the contentious item, many other items in the budget were good news for the SCSA.
Kenn Lee, SCSA finance director, said the 2024 settlement agreement with the 49ers contributed to some financial gains throughout the SCSA budget this year.
The SCSA is likely to see roughly $5.3 million in net non-NFL revenue, Lee said, but he hopes that number will grow as events continue to be booked.
Roughly $6.4 million will funnel into the city’s general fund from stadium operations, Lee added.
Further, the SCSA continues to pay down its debt on the stadium, reducing it by 68% since 2014. Over that period, the SCSA has reduced the debt on the stadium from $653 million to $209 million.
“This is a good story. This is something to be proud of as a stadium authority in terms of operations and the pay-down of debt,” Lee said.
Additionally, revenue in this year’s budget will bolster city reserves, increasing them to $79.6 million.
Despite the seemingly good news, looking at the 10-year forecast, Lee cautioned the SCSA that the city was “still in an environment with a general fund deficit.”
The budget also included an additional $1 million for capital improvements.
Chuck Baker, assistant city manager, told the SCSA that the $18.6 million slated for capital projects this year would go toward “key infrastructure” at Levi’s Stadium. Of that amount, $17.1 million is going toward improvements, with $5.2 million in new projects and $11.9 million in carryover projects.
Among the new projects is LED retrofit, escalator canopies bird-proofing, boiler replacement, and structural steel coating. Carryover projects include lighting, waterproofing and the purchase of kitchen equipment.
In addition to this, Baker gave the SCSA a broad overview of the stadium marketing plan. He said the plan is “prioritizing high margin events” and aims to “optimize revenue strategies.”
Additionally, the budget supports “major events” for both the 2026 FIFA World Cup and Super Bowl.
Mayor Lisa Gillmor pushed hard for a “full complement of analysis” as soon as possible, an accommodation Grogan said city employees could honor within six months.
The board unanimously approved the item.
Consent Calendar Spending
The council approved the following spending in one motion via the consent calendar:
- A $202,322 two-year extension to a contract with Dasher Technologies Inc. for support of Silicon Valley Power’s IBM Blade Center servers. Total contract amount is now $1 million.
- A six-month, $400,000 extension to a contract with LPA Inc. for work at the George Haines International Swim Center (ISC). Total contract is now $648,920.
Council Member Raj Chahal was absent.
The next regularly scheduled meeting is 7 p.m. Tuesday, March 25 in the Council Chambers at City Hall, 1500 Warburton Ave. in Santa Clara.
Members of the public can participate in the Santa Clara City Council meetings on Zoom at https://santaclaraca.zoom.us/j/99706759306; Meeting ID: 997-0675-9306 or call 1 (669) 900-6833, via the City’s eComment (available during the meeting) or by email to PublicComment@santaclaraca.gov.
Contact David Alexander at d.todd.alexander@gmail.com
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