Here is the opening to my Tuesday column, which treats the touchy situation between the Niners and Santa Clara, a dispute over $30 million:
I’m offering serious advice to the 49ers about their new stadium, but first you need a little background.
Last Friday, Santa Clara County officials voted not to give the 49ers $30 million for their stadium, currently in the early stages of construction. The $30 million was supposed to come from redevelopment funds. It’s just that the California Supreme Court did away with redevelopment agencies at the end of 2011.
This created a problem statewide. The end of redevelopment agencies means much of the money that used to be allocated to them now goes to the state, which spends it on schools.
That’s the opening. I go on to advise the Niners on how to be good citizens. To read the rest of the column, click here.
Brandon Conway
The 49ers should just turn around and let themselves get screwed over by an illegal seizure of designated funds? Ridiculous.
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For the record, if it was the other way around I would feel the same way. If it was money that had been promised to school funding and the board suddenly decided to loan it to a private company it would be just as ethically incorrect.
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The County has an obligation to follow the law. Period. Otherwise we might as well hand over our voting privileges, carry residency papers, and stand in bread lines.
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“[The 49ers] should have seen this coming and prepared for it.” This is moronic and the equivalent of saying that one should expect government to back out of deals illegally and blindside people they’ve worked with in good faith. So, basically, when government screws you over, it’s the fault of the person/entity being screwed for believing they wouldn’t be. This is so backwards as to defy basic tenets of moral action. “Hey man, you shoulda known I was about to punch you in the face. The fact that I’m a known face-puncher is enough for the blame to be transferred from me to you.”
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So, it’s bad to sue your hosts, but your hosts can spit in your face all they like as long as they have power trips? What kind of terrible reasoning is this, Lowell?
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All I read in your article is that the 49ers and Joe Public should be “good citizens” by allowing their government to walk over them. What about criticizing the County for blindsiding the 49ers and doing this without any warning? What about them blatantly disregarding the will of the voters? What about the continued theft of the American public by the politicians who are supposed to adhere to the will of the people they represent but then back-out of that commitment and then get praised for it because they cushion the blow with promises of “thinking of the children!”?
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I’m sorry, but this is simply a high profile example of the continued political corruption and backhanded tricks that this country is drowning in. I hope the 49ers sue the hell out of the County, win + with damages, and the County residents decline to re-elect these representatives that refuse to follow the will of the people for their own whims of do-goodery that are almost always public showboating.
June 25th, 2012 8:49 pm
Brandon Conway
And by the way, I agree that the redevelopment programs that were for blight had run their course and should have been discontinued, but that doesn’t mean you back out of commitments already agreed to. At the absolutely very least the County needed to approach the 49ers about working out a more amiable resolution if they were that desperate for the money, but they didn’t, instead just kicking their “good citizens” in the shin without warning after they already moved into the neighborhood.
June 25th, 2012 8:55 pm
ga's
As I mentioned in a previous comment, the 49ers funding for the stadium project has been built on shaky ground. But with the help of the shills at the SJ Mercury News, the Elected Officials of Santa Clara, and hype from the Yorks, this issue has not been looked at more closely, by anyone in the Media.
Check out this article on SJ Mercury News that explains “finally,” that the stadium project in Santa Clara is having funding issues.
“Funding questions resurface for SF 49ers Stadium after Board yanks $30 Million”
http://www.mercurynews.com/southbayfootball/ci_20935870/funding-questions-resurface-san-francisco-49ers-stadium-after
Two of the Banks secured for the loans have been downgraded as of last week, and as of this date the stadium project has Not yet been funded.
June 25th, 2012 10:16 pm
Santa Claran
What the voters approved in June 2010 was ‘up to’ $40 million in redevelopment money for the stadium. ‘Up to’ means anything from zero to $40 million. The city had already spent $10 in redevelopment funds, so the 49ers did get some redevelopment funds. The ‘up to’ means that they were not guaranteed a full $40 million.
The ballot measure was a City of Santa Clara measure – the county was not involved, nor has the county promised money to the 49ers or been loaned money by the 49ers. The amount of misinformation in the press is frustrating to those of us who actually live here and know what’s going on.
Despite knowing that the RDA was going away and the Supreme Court’s ruling that it is okay for the RDAs to go away, and that oversight boards will divvy up the RDAs money, the 49ers went full steam ahead with construction, loaning $30 million to Santa Clara’s Stadium Authority to proceed with construction without knowing if they would be paid back by the RDA.
It is the Stadium Authority’s debt that we’re talking about here, and without redevelopment money to tap into, the Stadium Authority has no source of income to pay the 49ers back. The 49ers made the decision to go ahead with the loan knowing that the payback funding source was uncertain.
In addition, what the voters approved said that neither the city nor the redevelopment agency are liable for the debts of the Stadium Authority. The 49ers loaned money to the SA knowing full well that there’s a fire wall between the SA and the city. So the 49ers can’t sue the city or the RDA to pay off the loan they made to the Stadium Authority. And the oversight board also cannot be sued (thank you Gov Brown.) The county has nothing to do with this other than having some county people sit on the oversight board (together with school district, college district, city, and water district people.)
What the oversight board did was to sever the agreement between the RDA and the Stadium Authority so that no more property tax dollars can flow to the Stadium Authority. County Counsel said at the oversight board hearing that the Stadium Authority was created by the Santa Clara city council to ‘wash’ money between the RDA and the 49ers in order to circumvent redevelopment law, because the RDA couldn’t give money directly to the 49ers.
The $950 million in loans were supposed to fund 2 months ago, and according to an article in the sj merc news tonight, it sounds like the loans haven’t funded yet.
June 25th, 2012 10:43 pm
Geoffrey Zuma
Best article all year, anywhere.
June 26th, 2012 12:19 am
Tommy CostaRica
Lowell I was thinking the same thing, the Yorks knew this was coming! And you’re so right how can you fight for money now earmarked for schools? It’s peanuts to them, it’s like signing or not signing another player.
June 26th, 2012 6:55 am
Joe c
So Brandon, ur saying the miners so say sorry schools, ur gonna have to lay off a bunch of teachers so the niners can play football here? I totally get ur point of the govt screwing the ppl comment but home on bro, if I had to choose that money would b going to the school
June 26th, 2012 7:43 am
Dennis
Lowell, you are offering very bad advice and your arguments in support of your advice are even weaker.
Blight hasn’t had anything to do with redevelopment since before you came out here, so get over that. Redevelopment has been about using property tax funds to increase sales tax revenue to city coffers for years. Typically, redevelopment funds are used to help build shopping centers. In this case the funds are being used to help build the stadium and thus increase significantly the sales tax revenue to the city and the schools. In fact, the schools supported the measure that the voters voted on to make this happen.
$30 mill is only 3% of the total cost, but it is much more significant than that when compared to the amount the 49ers are contributing to the project, which is where this money is now supposed to come from. Also, my guess is that the 49ers may be exposed on all the rest of the money. The NFL and all the banks lent money in reliance on all of these agreements being in place.
Finally, you missed the point about valuable lessons here: you are only as good as your word. I am sure you have taught this to Grant growing up. How good is Santa Clara County’s word regardless of how they used the money?
In the end, the 49ers are going to sue. This is too much money. I watched the video of the meeting. Every attorney in the room, except the County’s attorney, were telling them they couldn’t do this, that they needed better legal advice (mostly from the state) and they are going to get sued if they do it.
I hope the 49ers start by getting an injunction on the use of the fund. I sure would.
June 26th, 2012 8:07 am
Dave T
If it walks like a duck, and it talks like a duck, then…..
Ok, you know the rest there. Bottom line is that this more and more looks like a bait and switch. They got the Niners to commit to the area, got the zoning and permitting process done, and now just expect them to pick up the tab for a “shortfall” in funds, while reaping the benefit of the increased tax revenue. I am sure that the Niner Organization tried to put in some sort of clause in the event this happened, but would also bet that it was stricken during the negotiation process as well. Classic political manuevering and wrangling by Santa Clara County. Sad day for a good franchise.
It points out more and more the ability of the Giants to finance their own project, work towards paying off their own stadium where in the end, they own it and no one else. That is a huge leverage chip in their pocket. I wonder how many other franchises can say the same at this point? I would guess perhaps the Yankees and RedSox and Dodgers in MLB. The Packers, Steelers, Patriots and Bears in the NFL. And Maybe the Celtics in the NBA? Other than that the remaining teams all are on a lease basis I would guess. Only other sport globally where the teams own iconic venues would be the English Premier League and other top tier soccer teams in Europe. And they have few such funding issues. Hmmm…curious……
June 26th, 2012 9:37 am
Brandon Conway
“So Brandon, ur saying the miners so say sorry schools, ur gonna have to lay off a bunch of teachers so the niners can play football here?”
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Who’s saying anything about laying off teachers? Unless public schools seriously mismanage their funds they already have (which, sadly, they often do), why would this cause teachers to be laid off? Money isn’t the problem with schools, but rather how the money is spent, and how much of it is wasted on administrative overhead. There are several books and films recently that detail this.
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Besides, blaming the 49ers for hurting teachers is a false argument. In theory one could blame every other budget item for hurting teachers. If teachers don’t get 100% of the funding are we supposed to feel guilty? If I buy a Blu-ray of a movie I like instead of giving that money to a teacher am I somehow contributing to the problem of education? It’s a shaky argument at best.
June 26th, 2012 9:46 am
Steve
As with all arguments, there are two sides. Brandon’s point about school funds being misappropriated are spot on – almost every school district in our state is guilty of this, as are most political entities. I recently retired from a County government supervisory position and was continually dismayed at the failure to fill vacant nut and bolt positions due to retirement and attrition but increasing management and administrator positions, all the while crying poor house to justify not filling the positions necessary to serve the public. That said, I cannot support any public money – in good times or the current very bad – going to private stadium projects. The York’s are billionaires and obviously well-connected. If the Giants were able to find the money without delving into the public’s pockets, so can the York’s. Already they are implementing seat licenses (thereby forcing long-time fans to pony up or lose their season ticket rights) and the stadium naming rights are likely open for bid as well. I’m a Niner fan, but as a resident of San Francisco voted against every stadium plan they proposed. What with all the services that need fixing in our downtrodden economy, the last thing we need is to loan (give) money to billionaires. The article in the SJM opens up even more reasons to be skeptical of the basis for this funding. And by the way, the way it usually works in government when money is involved is: State takes from County, County then takes from Municipality. Sorry Santa Clara City, you got trumped.
June 26th, 2012 10:22 am
Mark M
Do you really think they haven’t already earmarked the funds from naming rights and that of all their other clever ideas to market themselves already? This is a big hit to their project. I don’t see this as a black and white issue at all. Some truly excellent points already brought up here.
Ultimately though, I believe you are right to suggest that they not sue their partner at this stage for 3% of the overall budget. That WOULD jeopardize the project in my view and it’s still very possible it should still get built on time as things stand today. They may have to eat it in order to get their final result.
June 26th, 2012 11:36 am
Streetglide
DeBartolo family made two gazillion dollars developing major projects since I was a kid in Ohio. They put in “Ridge Acres,” an g-i-a-n-t tract development on pasture land I played in back in 1953. Trust me, they can find thirty mill. Might not be seats on the stadium toilets and no railings in the nosebleed seats but they will find it…
June 26th, 2012 2:40 pm
Dave T
Steve, I am with you as far as things go regarding the complete mishabdling of funds and can agree with the turning down of public funds to build any stadium project to a degree. First, Santa Clara the City and County both stand to make a lot of money from tax revenue generated by the fans of the games and other events that will undoubtedly be held at the stadium. Second, if the promise of those funds are what helped woo the franchise to the area then they are in breach of contract and simpy excusing that opens up a huge kettle of fish from a legal standpoint. Third, if it is in fact a loan, that is repaid with interest, then it is a win win situation for the City and County. The Niner had options, they accepted a bid and now they want to change the terms. Last I looked, no matter what business you were in, that was a losing strategy.
June 26th, 2012 2:49 pm
Neal
The Mayor of Santa Clara had said that the board voted 4 to 3 against the funding, he also said that the board didnot have the power to do that, as it was agreed upon earlier about the 30 million that the board did vote for two years ago, also the people of Santa Clara voted 60% to 40% to have the stadium builted. The board members went over their power and the Mayor is quite confident that this will be over turned, their is a Dept of Finance that will over turned this.
June 26th, 2012 5:12 pm
Johnc
I think it will be a good thing if the Niners sue the County. It will make for very interesting legal arguments.
I have to wonder if the County is being hasty. How much revenue will the County stand to gain over time if the stadium is built ? I know the City will benefit but what does the County get directly and indirectly? More than $30 million? Are they stepping on dollars to pick up dimes?
I don’t agree with your philosphy, Lowell, that just because a team or a corporation or an individual can afford a financial setback that it releives the County the moral obligation to repay the money and/or abide by the will of the voters in the county.
June 27th, 2012 2:36 am
Santa Claran
Re: the other attorneys who were in the room besides County Counsel. I wouldn’t put much credence on anything they have to say.
The city attorney of Santa Clara, Ren Nosky, was the city attorney of Stockton (now known as the largest city in the country which has declared bankruptcy) during the time that Stockton made some very bad financial decisions – such as investing in a stadium – that led to the city’s financial downfall. He also came to Santa Clara with a judgement in Stockton for sexual harassment of an employee – a judgement for which the city of Stockton paid something like 1/2 million dollars.
He’s also the attorney for Santa Clara’s Stadium Authority, which has a vested interest in getting RDA money. He’s not neutral. He previously advised the city council to sue their own people to deny us the right to vote when people had collected enough signatures to put the $950 million in undisclosed loans for the stadium on the ballot.
The attorney for the RDA (who said she objected to the motion) again has a vested interest in passing that money to the Stadium Authority. (and note that her salary is paid by having such RDA projects, otherwise she’d have nothing to do.) All Santa Clara city employees/attorneys/consultants at this point have drunk the stadium Koolaid. Support of the stadium seems to be a litmus test here for getting appointed to city commissions too.
Of course the 49ers attorney will say whatever it takes to get their way. The 49ers have had nothing but yes votes from Santa Clara’s council majority for 6 years. They expect to run the show and have everything go their way. They’ll spend whatever it takes ($5 million in the stadium election, $350 per yes vote) to get their way. It was laughable when the 49ers attorney said that the public agencies which stand to benefit from RDA dollars would benefit more from having the stadium go in. Huh? Santa Clara’s consultant estimated years ago that the city would take a 2 to 1 loss on any public money it put toward the stadium.
County Counsel was the only one in the room who had clearly read the Governor’s legislation pertaining to what the oversight committee’s responsibilities were.
And the 49ers can’t sue the county. The media have really messed up reporting on this. There is no contract with the county and the money wasn’t loaned to the county. It was loaned by the 49ers to the Stadium Authority, which has no assets, no income, no taxing authority, and no ability to tap into RDA tax dollars. The Stadium Authority is broke and cannot pay back the 49ers loan. The 49ers loaned the money knowing that Gov Brown had wiped out the RDA. Making the loan was a poor decision on the 49ers part.
June 28th, 2012 9:13 am
Santa Claran
Oh, by the way. In a speech, Gov Brown used the 49ers stadium as an example of why RDAs need be done away with. It’s really a textbook example of the misuse of redevelopment funds.
June 28th, 2012 9:15 am