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Stadium Authority Hears Quarterly Financial Report

The coronavirus pandemic has not dampened the bad blood between local politicians and Levi’s Stadium management.

At the Stadium Authority Board’s Thursday meeting, members decried the Forty Niners Stadium Management Company (ManCo) for continuing to withhold pertinent information from the Board. The discussion came up during a presentation about the stadium’s third quarter financial status.

Concerns about how the pandemic would affect stadium revenue came to the forefront of the discussion, led by the Board’s Treasurer, Kenn Lee. The Board will have to cut into reserves if projections from ManCo are correct. ManCo told the Board it expects a “business as usual” scenario, Lee said, which entails no layoffs or furloughs.

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That scenario would require the Board to dip into its reserves because it would mean running an $8 million deficit, Lee said. But getting an accurate assessment is difficult because ManCo is still failing to provide the Board with a clear picture of the finances surrounding stadium events.

“This virus is attacking everybody, and this is a time when everybody should be working together instead of not sharing information,” said Board Member Kathy Watanabe. “It is disappointing to hear the constant fight just to get information.”

While the finance department has charted three scenarios, each leave the Board pulling at least $1 million from its reserves. However, Lee told the Board that those projections still assume the Board is making the minimum debt payments, something it has fared very well on since the stadium was built. Of the $653.4 million owed in March 2014, only $325.8 million remains outstanding.

Of the eight non-NFL events held at Levi’s Stadium, six lost or failed to make money. The biggest loss was the PAC-12 championship, which ran a $2.2 million deficit. ManCo has projected a deficit between $1.7 million and $2 million for the fourth quarter.

However, getting a clear picture of how ManCo is arriving at these numbers is difficult because it has been reluctant to be transparent with the Board.

“A large part of our time is, and of staff’s time, is devoted to, not just to litigation, but to simply getting answers for the Board, asking these questions,” Stadium Authority Counsel Brian Doyle said. “It is like pulling teeth to get any kind of records or any kind of real financial information from the 49ers, and we spend a large part of our time just going over these things.”

Its lack of transparency wasn’t the only thing at issue, Lee said. ManCo’s use of the revolving loan fund in the contract with the Board continues to be at issue. Doyle described ManCo’s use of the revolving loan fund as “charging us money to pay them.”

Another point of contention was $4.4 million in buffet services for stadium builder license (SBL) holders dating back to 2014, something Lee said he is unable to explain.

The Board also had little insight into whether marketing for SBLs — 91 percent of which have been sold — would be an ongoing cost or whether its insurance rates would even out despite lower-than-average rates secured by ManCo and reimbursed by the Board the past few years.

Board Member Debi Davis said ManCo’s actions are rife with “audacity” and are “ridiculous,” and “irresponsible.”

 

Newsletter Redesign

The City’s communication director also informed the Board about an update to the City’s newsletter.

Having employed a consultant to revamp the City’s newsletter, Inside Santa Clara, Lenka Wright told the Board that the updated newsletter will go out sometime in June. It will feature improved design and is more readable. It has been reduced from 20 pages to between eight and 12 pages, with a 11×7 magazine size instead of its traditional digest size.

The City’s newsletter has remained unchanged for 20 years. Wright said it was time to “modernize” it. The newsletter is slated to publish three times a year.

Wright said response to the new design has been largely positive.

The next City Council meeting is 6 p.m. Tuesday, May 26 in the Council Chambers at City Hall, 1500 Warburton Ave. in Santa Clara.

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1 Comment
  1. John Slos 6 months ago
    Reply

    City Manager is choosing to fire employees instead of liquidating assets. The City Manager is choosing to fire employees as a first option. The City Manager who made pay + benefits over $680,000 in 2018 and required a housing allowance of $42,000 a year when she already lives in Sunnyvale, is choosing to fire people to save money. If the City Manager would have given up her 10% increase from December over 40 as needed employees from the Libraries alone could have kept their jobs. The City Manager and Council is choosing to take pay and benefits from the persons who actually run the City and make all the work happen. ANYONE can be a manager, the entire management group makes over 31% of the Cities total budget for personnel and their retirements are even higher. If you fire the employees, the manager doesn’t know how to do the work, it makes no sense. Who are these people? Why does no one care?

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