49ers agree to share parking boodle with local lot owners, may avoid MNF ban

Remember how the San Francisco 49ers weren’t going to be able to play any weeknight home games because they didn’t have enough parking? Problem solved, says the San Jose Mercury News:

The Niners now are close to locking down 31,500 total parking spots within walking distance of 69,000-seat Levi’s Stadium by the time it opens in August. That’s a 50 percent jump from the plan voters approved years ago and a 66 percent increase over infamously jam-packed Candlestick Park.

That “close to” is a tad worrisome — it looks like the only source for this claim is the 49ers themselves — but if it can be believed, it sounds like the 49ers threw enough parking money around that local business owners (and a city-owned but privately operated golf course) decided it would be worth their while to set aside spots for football fans. So yay, capitalism works in this case, and the NFL schedule makers don’t have to jump through hoops. And 49ers fans only have to pay $40 for parking, which is I guess what football fans pay for parking these days? I’m starting to understand why they’d rather stay home and watch on TV.

Look ahead to new 49ers stadium: Farewell to terrible cheap seats?

San Jose Mercury News columnist Mark Purdy said farewell to the San Francisco 49ers‘ Candlestick Park yesterday, and while he doesn’t hide his feelings for the old place (“The best of riddance, you old hunk of concrete garbage”), he does try to evaluate what the fan experience will be like at the team’s new home in Santa Clara next year. And after discussing such line items as the concourses (“43 feet wider”) and restrooms (“28 percent more plumbing fixtures”), he goes what he calls “architectural-geeky” and brings up the new stadium’s feature that will have the most impact on actually watching the game:

The vast majority of luxury boxes are located in an eight-level tower — essentially, a 12-story building — on the west side of the field. That means two things: One, there are no upper decks on the west side, just the lower bowl and the tower. And two, the east side upper decks can be closer to the ground — because it does not sit atop multiple levels of luxury boxes.

That second item isn’t trivial, as one of the hallmarks of most modern stadiums is that they have terrible upper-deck seats, thanks to those luxury suites having to be wedged in beneath them. Avoiding this by stacking all the suites on one side has been done before, though — the Atlanta Hawks‘ Philips Arena, Red Bull New York’s Red Bull Arena, and the Detroit Lions‘ Ford Field all come to mind. And as you can see from Ford Field, this makes for a somewhat unusual view facing you across the field:

Still, having to stare at a wall of glass is a reasonable tradeoff for having a better view of the game, in my opinion anyway. (Red Bull Arena is admittedly the only one of these three I’ve personally seen a game at.) Levi’s Stadium construction co-director Robert Rayborn speculates to Purdy that this layout will also make for a louder stadium, since sound will bounce off the suite wall and echo around the place; it’s hard to tell from the Ford Field example since hardly anyone has ever made noise at a Lions game, but there’s some evidence that it might be possible, anyway.

49ers forgot that people drive to work on weekdays, can’t accommodate any Monday Night Football

That $1.3 billion San Francisco 49ers stadium has a small problem, it turns out:

The Niners have always counted on neighboring businesses and other outfits to provide 21,000 parking spaces on game days for fans at Levi’s Stadium.

That will work fine on Sundays, when no one’s toiling away at those businesses. It will be a different story, however, if 68,500 fans converge for a 5:30 p.m. kickoff and all those lots are full of employees’ cars.

The upshot: No Monday night (or Thursday night) football for the team’s inaugural season in Santa Clara next year, and maybe not after that, either.

“It’s a busy area. We are still formulating all of our parking,” said Santa Clara City Councilwoman Lisa Gillmor, who also sits on the stadium authority.

“Formulating” here seems to mean “begging local employers to rent them more spots, and so far coming up empty.” It’s not a disaster for the 49ers if they’re shut out of MNF — ESPN’s TV rights money goes into the general league pool, so the 49ers don’t see any direct loss of revenue from not being able to play on Monday nights. Still, it’s a loss of marketing ability, not to mention kind of an embarrassment to the team and the league not to be able to showcase its newest stadium and its groundbreaking wifi network. Something’s going to have to give here eventually, but it’s not clear yet what it’ll be.

Report: 49ers to clear $100m a year in profit on new stadium

This is all based on an unnamed source, but if true, it’s absolutely nuts: San Jose Mercury News reporter Tim Kawakami says that the San Francisco 49ers‘ projected profit for next year, when they move into their new stadium in Santa Clara, is $100 million. That would be up from profits of not very much (Kawakami says the team is breaking even, Forbes says it’s more like $10 million a year in profits), and would make them the fourth most profitable franchise in the NFL — even after having to pay for almost all of the cost of their new $1.3 billion stadium.

How are the 49ers expecting to manage that? Per Kawakami:

That’s thanks to the massive success of the seat-license program, the suites, the sponsorships, and all the varying relationships and deals that the 49ers have strung together in recent months and years in conjunction with the stadium opening.

If true, it certainly explains why the 49ers were willing to take on so much of the stadium cost — if they can shell out an additional $100 million a year to pay off construction and still have another $100 million a year left over, that’s seriously crazy money, and shows that NFL stadiums (or at least, NFL stadiums for winning teams in a part of the country with tons of rich people) are an exception to the rule that stadiums don’t usually earn enough in new revenue to pay back their construction costs. It also makes one wonder why other cities are shelling out hundreds of millions of dollars for new stadiums for their teams when there’s potentially enough new venue revenue for them to pay their own way — not to mention whether Santa Clara could have asked for a cut of the 49ers swag in exchange for its financing piece of the deal, instead of just breaking even as it will currently.

Of course, that money has to come from somewhere, and that somewhere will be 49er fans, either via their eyeballs as advertising consumers or their wallets by paying for tickets (and PSLs). And paying for other things as well:

Parking fees haven’t been set yet, but they run in the $30 to $35 range per car and up to $75 for RVs and buses at Candlestick and at Raiders games. One South Bay city official told me would not be surprised to see prices in the $40 to $50 range for cars at the new 49ers stadium. When the San Jose Sharks arena opened, fans were outraged to pay $10 to park. How much are you willing to pay to park at a 49ers game?

The answer appears to be “a lot.” Or at least, is for the rarified clientele who will make up 49ers ticketholders. Now the 49ers owners had just better hope that the team stays good and popular for the duration of the stadium bonds — and that, you know, football doesn’t get sued out of existence in the meantime.

Today in new crap they’re putting in NFL stadiums

A couple of reports on new technology that NFL teams are installing to get people off their damn sofas and into football stadiums:

If you don’t go to NFL games (or don’t drink beer — which, come to think of it, probably implies the former), you should probably still care about this stuff because it ups the ante for teams with state-of-the-art clauses that say their public landlords have to provide them with anything that enough other teams get. I don’t think any city councils have yet been presented with a bill for pneumatic beer tubes, but it’s probably only a matter of time.

49ers stadium cost now $1.3b after added “fan experience enhancements”

The San Francisco 49ers are adding about $100 million worth of goodies to their new Santa Clara stadium, mostly for unspecified tech upgrades to “enhance the fan experience.” They can afford this, in part, because their annual rent payments are expected to go down from $30 million a year to $24.5 million a year, thanks to better-than-expected naming-rights and PSL sales and a refinancing deal that will cut the public stadium authority’s loan rate from 7% to 5%.

Clearly, the 49ers stadium is turning out to be a best-case scenario, where the public costs are going to be repaid by team revenues, and the stadium can pay for itself despite a whopping $1.3 billion price tag. (You could argue that the city could have held out for an even better deal where in exchange for fronting the cash it would get to profit from all the naming-rights and PSL boodle, instead of just breaking even, but that’s a best-case scenario for a more utopian America.) It just goes to show that some stadiums can be built with private money and turn a profit — so long as they’re in major metropolitan areas flush with tech income and host teams that go to the Super Bowl. Whether this would work in, say, San Diego, is another story, though one that the Chargers might want to be asking themselves given how their stadium subsidy demands are coming along.

Levi’s to pay $11m a year to put name on 49ers stadium

As has been rumored ever since it was noticed that they’d registered a whole bunch of stadium-related domain names, Levi’s is buying the naming rights to the San Francisco 49ers‘ new stadium in Santa Clara. Price: $220 million over 20 years. That’s more per year than any NFL stadium other than the New York Giants‘ and Jets’ MetLife Stadium, which is about right, given that while the Bay Area is pretty big and lucrative, it’s still not New York (and there will only be one team playing in Santa Clara, at least unless the Oakland Raiders move in).

So what does this mean for paying off Levi’s Stadium’s $1.2 billion price tag? The naming-rights money is supposed to help pay off $450 million in short-term bonds that Santa Clara’s stadium authority sold toward funding construction, with 70% of the fee going to the authority. Santa Clara is already expecting to get more than $300 million at least $400 million from seat licenses, so add in the present value of $7.7 million a year in naming-rights money — somewhat backloaded, as it’ll start at $5.7 million in 2014 and rise 3% a year to $10 million in 2033 — and … taxpayers should have their butts mostly covered, anyway, though it’ll likely require selling some 20-year bonds that can raise money now and be paid off over time with the Levi’s boodle.

So Santa Clara’s big gamble looks to be working out relatively well: If taxpayers do end up on the hook for something toward the stadium costs, it should only be a tiny fraction of the $1.2 billion total construction cost. Which doesn’t necessarily make such a risky maneuver a good idea for other cities — not every team can sell its naming rights for $11 million a year, and Santa Clara got very lucky that the 49ers got good just in time for those PSLs to go on sale — but at least those who were worried this would be a Cincinnati-style taxpayer albatross can breathe a little easier.

Judge rules 49ers should get $30m in property taxes after all, to hell with schoolteachers

Been wondering what ever happened with that $30 million in property tax money that the San Francisco 49ers were going to get for their new Santa Clara stadium, only then the state development agency that was going to give it to them got dissolved and the body that inherited the money said they’d rather spend it on schoolteachers, and then there was a lawsuit and a settlement and then the California state finance department said the settlement was illegal? No? Well, tough, you’re going to hear it anyway:

After a yearlong royal rumble between the San Francisco 49ers, local schools, the Brown administration and others, a judge on Wednesday ruled that South Bay school officials were wrong last year to yank $30 million in disputed tax funds from the team’s new stadium.

Sacramento Superior Court Judge Allen Sumner said in a nine-page tentative ruling that he could not immediately award the funds to the 49ers, but he appeared to leave little recourse but to make sure the Niners eventually receive the money one way or another. The team may have to wait until as late as 2016 to receive the cash, however, the judge said.

The Santa Clara board that tried to take back the $30 million is now expected to appeal, with a hearing scheduled for Friday. The San Jose Mercury News claims that this will “conclude a contentious court case that began when the 49ers sued to reclaim the money last June,” but the notion of anything ever concluding in this case seems but a distant dream.

No tax, please, we’re the Super Bowl

Getting to host a Super Bowl isn’t all about whether you’ve built a new enough stadium or are in a place where it’s sunny in February. No, the key to a successful Super Bowl bid is also about bribes, or as they’re called in NFL lingo, “financial demands.” The Santa Clara city council voted unanimously last night to accede to the NFL’s requirements by rebating a whole slew of fees and taxes, which were nicely summarized by newballpark.org:

  • 10% NFL Ticket Surcharge – At a conservative set price of $500 per SB L ticket, the $50 surcharge would yield $3.75 million with an expanded capacity of 75,000.
  • $0.35 Ticket fee – Meant to fund some senior and youth programs. A cap of $250,000 per year is imposed on this revenue source. If the 49ers play at least one home game, it’s likely that the 49ers would hit the cap, rendering additional collection of this fee moot.
  • Hotel tax – A Mello Roos district was created to provide some stadium funding, backed by a hike in the transit occupancy tax from 9.5% to 11.5% in the stadium’s immediate area. The NFL asked for its share (350 rooms for an unspecified number of days) to be waived. Assuming that the NFL needs 350 rooms for the full two weeks, the City would forego some $70,000+ in hotel taxes. The City notes that it expects to make up this loss via taxes collected on additional room bookings.
  • Off Site Parking fee – The City has imposed a $4.54 fee per space for event parking. That too will be waived. This appears to be for all Super Bowl activities, not just the game itself. The City notes that the fee is meant to offset the cost of traffic management.

Total cost of all this to Santa Clara taxpayers: Nobody bothered to ask! As newballpark.org continues, “Strangely, no estimates of this impact were disclosed, even as the City touts $300 million in additional economic activity for the region.” (Much of which would be taking place in the San Francisco part of the region, since S.F. would be the official “host city” for Super Bowl week events, even as Santa Clara would be the actual city hosting the game.)

We’ve been through before with Indianapolis, of course, so none of it should be any surprise. But it’s a reminder of how cities can host a major event like the Super Bowl and still come out of it with an operating loss. Good thing the Super Bowl brings in all sorts of ancillary economic benefits — oh wait.

How the 49ers will save $120m or so by having Santa Clara sell their PSLs

San Francisco 49ers personal seat license sales for their new Santa Clara stadium continue to go well: After hitting $310 million last September, they’re now at $400 million, with still another year and a half to go before the place opens. The Niners may yet have to trim prices a bit to sell the last few thousand seats, most of which are in the end zones, but it looks like the city of Santa Clara should be able to pay off its first $450 million in stadium debt without much trouble. And with 49ers rent payments set to pay off the rest, it looks like the worst fears that the public would be saddled with humongous risk won’t come to pass.

As Bloomberg Businessweek points out, though, there’s still a big tax benefit being hidden amidst the PSL sales:

When the Carolina Panthers sold the first PSLs in 1993, the team had to pay a $50 million federal tax bill on $160 million. That didn’t sit will with NFL owners, who came up with the idea of having a government entity sell the licenses and own the venue. (In Santa Clara, the stadium authority contracted with a company called Legends to broker the sales. The team will pay about $30 million in annual rent to the stadium authority.) Figuring on a federal tax rate between 30 percent and 35 percent on the $400 million in revenue, the 49ers stand to save from $120 million to $140 million.

Basically, by having the (tax-exempt) city sell the PSLs instead of the team, the 49ers are able to use the pre-tax proceeds of PSL sales to pay off their stadium, not the after-tax proceeds. There’s nothing illegal about all this, but it is a massively lucrative favor that the city is doing for the team, in exchange for nothing at all. Santa Clara (or other cities contemplating similar PSL sale dodges, like Atlanta for the Falcons) could legitimately say, “Hey, we’d be happy to sell those PSLs for you and save you $120 million or so, but how about then you cut us in on some of your profits via, oh, let’s call it a PSL sales commission?” They don’t, but they could — so while you probably shouldn’t really consider this a subsidy (unless you consider the fact that the IRS doesn’t crack down on this sleight of hand to be a tax loophole, which you could make a pretty decent case for), it’s still very much an opportunity cost.