Judge knocks down Santa Clara 49ers referendum, appeal likely

In a major blow to opponents of Santa Clara’s $1 billion stadium plan for the San Francisco 49ers, a county judge has ruled that the ballot measure approved in January forcing a new referendum on the deal is invalid, agreeing with the team and city that the changes in the financial structure of the plan are a mere “administrative” change, and thus not subject to a public vote.

The group Santa Clara Plays Fair, which led the referendum drive, says it’s considering an appeal. 49ers spokesperson Steve Weakland called Judge Peter Kirwan’s ruling preventing a public vote “a victory for the citizens of Santa Clara” because it will “protect their vote in June 2010 [when] they said yes to a new stadium.”

With shovels already hitting the ground, it’s going to be increasingly difficult for opponents to throw any more roadblocks in the way of this deal, unless they can get this ruling overturned on appeal even more quickly than Kirwan reached his decision. Beyond that, as Newballpark.org notes: “If there’s a dangerous precedent, it’s that any municipality [that] chooses to build a stadium in the Bay Area can choose to be purposefully vague or obfuscating when writing up stadium deal terms, get a referendum passed, then fill in the blanks later.” Not that anybody would ever do that.


25 comments on “Judge knocks down Santa Clara 49ers referendum, appeal likely

  1. It’s not just in the Bay Area where this could happen, it’s anywhere in California. Here’s why:

    1) There is no legal requirement for city-wide ballot measures to disclose costs in CA. (There is such a requirement for state and county ballot measures.) In SC’s case, we were given a ballot measure that disclosed no loans or debt of any kind to our Stadium Authority.

    2) It’s legal to mislead the public during a campaign, due to freedom of speech. We were told repeatedly by our mayor and council members that the 49ers/NFL/stadium revenues would pay for 88% to 92% of the stadium. They put out a false pie chart of stadium construction costs that hid the existence of the Stadium Authority and any costs/debt/risks to that agency.

    3) Council members can work behind closed doors to load up a Stadium Authority with loans/debt, and then when voters object and want a chance to vote on the loans/debt, voters are told ‘No, this is merely an administrative act and not legislative, so you don’t get to vote.’

    4) If $850 Million is an administrative act, at what price point would an act be legislative? $2 Billion? $5 Billion? Is the sky the limit for how much debt can be loaded onto a Stadium Authority?

    5) The whole process of electing a city council, only to have the council change hats to a Stadium Authority and then vote without the public being able to weigh in on what their Stadium Authority is doing, is a recipe for disaster. Elected officials actions should not be beyond the reach of voters.

    Unless people want to end up in the same situation as Santa Clara, just vote NO on any ballot measure to approve a stadium. What you are voting on may in no way resemble what you end up getting.

    To see the timeline of how the stadium gameplan was played in Santa Clara to hoodwink the voters/taxpayers, please visit:
    santaclaraplaysfair dot org

  2. Neil,

    The next chapter in your book has practically written itself for you already.

  3. Apologies….I am laughing out loud as I mentioned before this stadium is going to get built and Santa Clara Plays Fair was off basis.

    In reality this new deal is better than the first one. The judge clearly saw that and shot down a new vote.

    A new vote would have passed even easier as in the old deal any shortfall for Santa Clara’s share came from the General Fund.

    In the new deal the 49ers/NFL are on the hook year to year on any difference from lease payments and debt service.

    The new deal block Santa Clara’s General Fund from being touched while the old deal left in open.

    This plus all revenues are now going to pay down the loan. Before the 49ers/Santa Clara each had a share and if there was excess that party got to keep it.

    The Stadium Authority is tax sheltered hence why they took on the loan……Who cares if they have the loan if someone in writing has agreed to pay it off?

    In the end, Santa Clara Plays Fair lost (again) because they do not see as a municipality, Santa Clara itself got a great deal.

    If the 49ers/NFL default, Santa Clara can sue them as they have a binding contract.

    In the end….the stadium gets built and Santa Clara Plays Fair loses…..What a great day!

  4. Santa Clara, I think what’s happening to you is wrong… But at least you had a chance to vote. Up here in Sac, we’re not even going to get that chance.

    I think it’s ridiculous.

  5. Mike,

    In retrospect we would have been better off having no vote on the vague and deceptive term sheet and waited to do the referendum on the DDA (as imcomplete at that remains).

    So our vote was pretty worthless.

    I feel for you having a NBA star as mayor. Doesn’t bode well for your “deal”–maybe we can compare our deals in a few years. Ha ha.

  6. There is no way in the world Santa Clara, or any city for that matter, will get a great deal when building & owning an NFL stadium. It would have been a great deal if the 49ers & NFL are paying for the entire project with their own money. NFL stadiums are the most uneven private/partnerships that exist. Never mind the foolish comments posted by SBSJ. Obviously this guy doesn’t have a business mind or he doesn’t pay taxes in Santa Clara. The same alleged insulations were in place for many other cities that built NFL stadiums. Guess what? In every instance where the stadiums lost money, the government had to bail them out. It won’t be any different for Santa Clara.

  7. On the other hand, Jay, if the current term sheets we have were put to a vote in Sacramento, they wouldn’t pass.

  8. “A new vote would have passed even easier as in the old deal any shortfall for Santa Clara’s share came from the General Fund.”

    “The new deal block Santa Clara’s General Fund from being touched while the old deal left in open.”

    Both are false statements. There was nothing in the original deal that had the General Fund making up for any shortfall.

    “The Stadium Authority is tax sheltered hence why they took on the loan…..”

    They must be a good explanation for why the 49ers are borrowing 400 million and then loaning it to the Santa Clara Stadium Authority, but I don’t think “tax shelter” has anything to do with it. It is more likely it is due to the fact that the 49ers loan to the Stadium Authority can be converted from a short-term construction loan to a 25 year long term loan.

    There is nothing taxable about taking out a loan and making payments. In fact, payments on a loan are deductible expenses. The Stadium Authority does exist to save the San Francisco 49ers taxes: property taxes by not owning the stadium and income taxes by taking the seat license revenue.

    “Santa Clara itself got a great deal.”

    How will Santa Clara get a decent return from the over 100 million it put into the stadium?

    “If the 49ers/NFL default, Santa Clara can sue them as they have a binding contract.”

    The Santa Clara politicians are shrewd negotiators aren’t they? They refused to give up their right to sue in the event of default! Of course, their contract is not with the San Francisco 49ers or the NFL. It is with Forty Niners Stadium, LLC.

  9. MotorcyclePatty: The notion that anyone would insinuate the 49ers are assuming the lions share of the risk is ridiculous. If this were the case, and the 49ers could lose a fortune under the pretense of the current stadium contract proposal, wouldn’t it make more sense for the 49ers to build & own the stadium so that if it falters financially they would at least have an asset to sell? That will never be the 49ers position because the DDA does not place them at any level of insurmountable risk. That burden will be placed on the Santa Clara Stadium Authority, which ultimately will transfer that calamity to the City of Santa Clara. Have you noticed not one elected city councilmember in Santa Clara assures us the stadium will not lose money. They know the most likely scenario is that is will lose millions of dollars per year. When that happens, don’t hold your breath waiting for the 49ers to be responsible for the so-called “promise to pay for any revenue shortfalls” which our city councilmember and mayor keep stating will be the backstop of any fiscal miscues of the stadium.

  10. Except that a stadium isn’t an asset that anyone can sell. I could see one falling into distress and being taken over by another entity, but that’s about it.

    I just don’t get the people on the council. Well, most of them will be starting to get up there in years when the fit really starts to hit the shan. Not going to be their problem, I guess that they don’t care about their legacies…

  11. SCJ, I’m betting the only legacies these council clowns care about is their families and friends that will get the opportunity to see games in suites these jokers will get to sit in. They couldn’t care less about the taxpayers.

  12. The only way SCPF is going to win an Appeal is to get the case taken out the County of Santa Clara. Because there is way too much 49er Bias for the 49ers/Yorks in the South Bay for the opponents to legally win the case. I still personally believe that the Law is on SCPF side, but you they “Will Not Get A Fair Shake In the County of Santa Clara.”

  13. The only way SCPF is going to win an Appeal is to get the case taken out the County of Santa Clara. Because there is way too much 49er Bias for the 49ers/Yorks in the South Bay for the opponents to legally win the case. I still personally believe that the Law is on SCPF side, but they “Will Not Get A Fair Shake In the County of Santa Clara.”

  14. The only way SCPF is going to win an Appeal is to get the case taken out the County of Santa Clara. Because there is way too much 49er Bias for the 49ers/Yorks in the South Bay for the opponents to legally win the case. I still personally believe that the Law is on SCPF side, but they “Will Not Get A Fair Shake In the County of Santa Clara.”

  15. Yes, the law is on SCPF’s side and the opposition knows it. They’re hoping SCPF exhausts their resources and that no appeals are filed. According to the United States Supreme Court, the people are entitled to a referendum vote concerning any local decision whether it be administrative or legislative.

  16. Yes, the law is on SCPF’s side and the opposition knows it. They’re hoping SCPF exhausts their resources and that no appeals are filed. According to the United States Supreme Court, the people are entitled to a referendum vote concerning any local decision whether it be administrative or legislative.

  17. Yes, it would. If the state courts deny a vote for the stadium referendum, and granted a higher court is willing to hear the case, the attorney(s) may appeal the case. If this matter becomes a federal issue, the legal opinion of the U.S. Supreme Court is on SCPF’s side.

  18. I thought that the Supreme Court of California would hear any appeals brought forth by SCPF…

    But as I said before the “only” way SCPF will get a “fair shake” in this matter, is to take it out of the South Bay. There is far too much collusion involving the Yorks/49ers with Elected Officials in Santa Clara County who want the 49er Franchise at all cost in the South Bay.

    SCPF will never win a court decision from the Courts located in the South Bay, there is to much Bias for the 49ers.

  19. I personally believe that the citizens of Santa Clara should ask that the Attorney General of California to Investigate the 49er stadium project. There was far too much underhanded shenanigans that went on regarding the Yorks, and the elected officials of Santa Clara NOT to have an investigation.

    If the AG of California can investigate an elected official in another City in California for sexual harrassment, she can surely look into what happened in Santa Clara regarding the 49ers stadium deal. What happened in Santa Clara boarders on illegal on so many levels.

  20. I’d have to agree with Truth Be Told. There is too much money involved in closed door sessions with small city council people in over their heads not to be corruption involved. I still like to know if there were payoffs made in the late ’80s regarding the HQ lease arrangement (you know the one with 11 acres of city land for $26K a year#.

    I also believe that there was no way a middle aged white male judge who grew up in San Jose #and lives in tony Los Gatos) was going to go against the 49ers. SCPF didn’t have a chance.

  21. Someone sure got paid off to come out with the city funded report/study that claims the 49ers practice facility brings hundreds of millions of dollars to Santa Clara each year.

  22. Someone sure got paid off to come out with the city funded report/study that claims the 49ers practice facility brings hundreds of millions of dollars to Santa Clara each year.

  23. Patty,

    That’s the work of the “magic” multiplier. Jamie Matthews can explain how it works.

    Consultants never tell the people paying them what they want to hear.

  24. what a bunch of whining going on. The city of Santa Clara scored a major deal. The team has already sold $145M in luxury boxes. There are license fees for the seats and concessions and ticket sales. Plus the stadium will be leased out to concerts and events for the next 30 years. Santa Clara schools received 500K this year. The property taxes alone are $10M a year.This doesn’t even include the increase in Hotel taxes, sales taxs and all the new business that will open around the stadium. The NFl will allow Santa Clara to host a Super Bowl which will bring in tons of $ to the city.