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“Thus, We Conclude That The Assessor’s 100% Allocation To Stadco Is Incorrect”

County Assessment Appeals Board Cuts 49ers Property Taxes By Half, SCUSD Takes Biggest Hit, Santa Clara County Tax Assessor Larry Stone, Superintendent Stanley Rose, 49ers Stadium Company (Stadco), Levi's Stadium

It looks like 2010’s Yes on J boosters succeeded beyond their dreams in selling the value of having Levi’s Stadium in Santa Clara. They even persuaded a County Assessment Appeals Board’s (AAB) that the value of Levi’s Stadium to the City was “significant” and “beyond any financial return.”

As a result the AAB reduced the 49ers Stadium Company (Stadco) taxable interest in the stadium to 50 percent.

The board’s decision was based on the 2012 contracts — and amended in subsequent years — that give the 49ers use of the stadium and rights to all revenue from August through January and the Santa Clara Stadium Authority (SCSA) those rights from February through July. The City Council negotiated and approved all of those contracts.


“The SCSA has the right to use the stadium for events large and small, a right it has vigorously exercised,” the AAB wrote the in a letter informing County Assessor Larry Stone of the Board’s ruling.

“Second, the SCSA and its constituent members (especially the City of Santa Clara) have reasonably expected an increase in value of its other properties due to proximity to the stadium.

“Third,” the letter continues, “the level of effort expended by the SCSA and its constituent members to build the stadium in Santa Clara and firmly negotiate the SCSA uses is  ample evidence that they believed the  presence of the stadium for all its intended uses would  have a significant value to their community beyond any direct financial return.”

The AAB also noted that the arrangement was the result of some sharp negotiating by both the 49ers and the City, with both parties creating multiple legal entities and complex partnership rights to maximize their own return and minimize their own risk.

“We are persuaded that the lease between Stadco and the SCSA was nothing if not an arm’s length transaction concluded after lengthy negotiations with both parties highly motivated and well represented,” the Board wrote.


“We note that in the end each party had the right to possess the property for an equal number of days… Based on our reading of the lease as a whole, and in light of the apparently balanced bundle of rights reserved to each party, that the fully realized intent of the parties to the lease was to obtain rights of a balanced and equal value for each party in the shared spaces in the property.”

The AAB did dismiss one argument for reducing the assessment: to make days of use the basis of the assessment instead of the two occupancy seasons  (NFL and Stadium Authority). The 49ers argued that on that basis their taxable interest in Levi’s Stadium was only 40 percent of the stadium’s value.

“We conclude that frequency of use alone is an inadequate measure of relative value,” wrote the AAB.

“Although we have rejected the Assessor’s 100 percent allocation of value to Stadco, we have not forgotten that this is, after all, a football stadium and absent the football stadium the shell and core areas occupied for Stadco’s exclusive use have no contributory value… Common sense dictates that Stadco’s use of this football stadium does not have a lesser value than SCSA’s non-football uses.”

“Thus,” the Board concluded, “we find that Stadcos possessory interest is equal to 50 percent of the value.”

Here is the AAB’s letter: 49ers Tax Decision Letter 2019.


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