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October 21, 2010
49ers: No Santa Clara stadium until labor battle's settled
The San Jose A's project isn't the only South Bay stadium plan running into trouble this week: San Francisco 49ers officials announced yesterday that it won't be able to raise private money for its planned Santa Clara stadium until the NFL's labor situation is resolved. According to a team statement:
Until there is a new collective bargaining agreement that embraces the realities of NFL economics today, the Santa Clara stadium project won't attract the required funding from either the NFL clubs or the financial markets. Since the financing plan needs to be in place several years before the stadium opens, the planned 2014 opening date may be delayed by a year.
So, is this just a shot across the bow of the players' union — agree to givebacks, or you'll make the 49ers cry! — or a genuine sign that the Santa Clara project's financing is in real trouble? There are some hints in a statement from an official for Goldman Sachs, the vampire squid investment bank hired by the Niners to arrange private financing, who told the San Jose Mercury News, "In order for the project to become reality, we need the participation of the league in the funding." The NFL, in turn, issued a statement saying that the "current economics of the NFL and the uncertainty of our labor situation" make it impossible for it to invest in stadiums, and that "We are working hard to reach an agreement with the players union that will provide the resources once again for significant capital investments by the league in projects such as a new Bay Area stadium."
What this all sounds like is that the 49ers have no hope of raising the money for a stadium just via private investors — no real surprise given the nearly $1 billion price tag, and anyway the team has said this before — but that the NFL isn't going to reinstitute its league-funded loan program for new stadiums unless it can fund it with givebacks from the union. Which means what we have is a standoff, one that likely won't be resolved until after a work stoppage that wipes out part or all of the 2011 season. And then the NFL would have to arrange to reinstitute the loan program, and Goldman would have to line up private investors in what's projected to be a still dismal economic climate ... at this rate, 2015 could be optimistic.
Our State is Broke. We can't afford the schools we want. Our concrete roads have little asphalt. And our Governor decided to sign a budget that's balanced on the backs of the sickest and most vulnerable citizens. I'm a big sports fan but I'd rather have a State and Local Government here in California that focuses on its people's needs- not on the needs of Manhattan-based sports leagues. Doesn't Goldman Sachs have a few billion they could lend the 49ers?
Posted by Art Vandelay on October 21, 2010 05:30 PM
"Our concrete roads have little asphalt"
Um, concrete roads don't have any asphalt... they are made of concrete...
Posted by Dan on October 21, 2010 05:52 PM
Well I'm sure if the 49ers/Raiders team-up that the stadium can be built. I'm sure the NFL will get the stadium loan program up and running again. If the players want more money they'll have to invest just like the owners.
Posted by kombayn on October 21, 2010 06:14 PM
Dan,
That's what I was hinting at with my comment. Some of the freeways at or near Sacramento are down to concrete since all the asphalt has been stripped off due to wear and tear.
Posted by Art Vandelay on October 21, 2010 06:28 PM
Consider the NFL Commissioner's visit only a week ago - then ask yourself if Jed York can really get away with blaming the expiring CBA for all his troubles.
The 49ers and the Raiders have been doing their silly little two-step on the "shared stadium" quite long enough - but it's that very shared stadium that's still the condition for any NFL contribution.
You can bet that Commissioner Goodell made that crystal-clear to the suits in both teams' front-offices.
If the NFL contribution is the condition for the investment banks to step up (See the Goldman, Sachs quote Neil included above), sounds like we've got real problems.
None of this is any help to Santa Clarans, though: By passing Measure J on June 8th, we surrendered to the 49ers the exclusive right of sublease to any second team here. We also gave up nearly all of the dough that could have generated. (See "Term Sheet �16.1" in your voters' Sample Ballots, June 8th.)
Regards,
Bill Bailey, Treasurer,
Santa Clara Plays Fair.org
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Bill,
What's your take on the Cedar Fair letter announcing their intention to keep GA open on all stadium event days and charging park admission to all stadium patrons wanting to utilize their lots?
Posted by santa clara jay on October 21, 2010 07:21 PM
Hi, Jay!
It's been called "synergy," but I think a better word is "monergy."
Only my guess: Cedar Fair shopped Great America around, but couldn't get rid of it. Maybe they're now trying to get as much as they can out this deal.
Note from their lawyer's letter** that they're exempting themselves from the "private parking district" overlay, and they're choosing to manage the Great America Parking lots (8,100 stalls) themselves.
As you noted, they're also making clear that there will be some kind of "parking package" where NFL fans will pay not only a parking fee but also a Great America admission fee, or some portion thereof.
It won't be cheap, and it's not clear how much control the RDA or Stadium Authority will have over them. We're contractually obligated to provide those spaces to Cedar Fair. However, we could ask: Is CF's "sublease" of those parking stalls to NFL fans an allowable use under the current theme park lease? Our City Attorney can say for sure.
So, anyway -- it's game day!: If you encounter a family of four who's paid tens of thousands of dollars for seat licenses, hundreds for season tickets - then $80 to $200 per game for hot dogs, jerseys, little plastic helmets and heartburn - you'll probably find that dropping even more money at Great America is the last thing on their minds.
When someone in the room uses the word "synergy" to describe a heavily-subsidized NFL stadium next to a theme park - I look quickly to see where the exits are.
Regards,
Bill Bailey, Treasurer,
Santa Clara Plays Fair.org
Hi, Jay,
I included a link for you - comment awaits Neil's moderation.
Bests,
Bill B.
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If my memory hasn't failed me, wasn't a proposal of the NFL labor negotiations to get greater financial player contributions in order to pay for the financing of a team & stadium in Los Angeles?
Posted by Juan Pardell on October 22, 2010 12:13 AM
Great America (aka Cedar Fair, the amusement park that has the lease on the parking lot the 49ers want for the stadium) submitted a letter on Oct. 12th to the city that states that Great America will be open on NFL game days and all other stadium event days to share in the 'synergy' our mayor and council majority keep talking about. Anyone who wants to use their main parking lot will pay GA for parking, plus pay for passes to the amusement park (thus adding substantially to the cost of attending a stadium event if attendees are not really headed to GA).
In addition to GA not participating in the 'parking district' the city is setting up, the letter indicates that the hotels are also not going to participate in the 'parking district' because their parking lots are for hotel patrons, who are welcome to spend the night and then have free parking on game days. The city wants to establish a 'parking district' that businesses sign up for in order for stadium patrons to use the business parking lots. This is because the stadium site has no parking of its own (now that GA has removed itself from the parking district).
And no one knows how people will tailgate. Will private businesses allow open grills in their parking lots? Will private businesses be willing to accept the liability from open grills on their property?
Then, there is the issue of the free police escorts that Santa Clara's police chief has authorized for the 49ers since 2007, without the knowledge of the people of Santa Clara or the knowledge/authorization of the city council. Police are paid for out of our General Fund - we were told in the 49ers campaign that there will be 'No Cost to Santa Clara Residents. Period.' Well, turns out we've been paying for years without being told. This comes at a time when our city is bleeding red ink and can't afford anything extra. Plus, we've been told that other NFL teams pay for their own escorts.
Posted by SantaClaraTaxpayer on October 22, 2010 10:01 AM
I'm happy to hear that the stadium has been delayed for a year. I'm hoping that it will never get built!
Why do the 49ers need police escorts? I've been trying to get the traffic department to address the issue of speeders down my street. Everyone uses my street as a shortcut. I have gotten the run-around since December 2009. They won't even put an officer in my neighborhood to give a few tickets to slow people down. Now I know why, they are busy escorting the 49ers. I have 2 schools within 1/4 mile from my house. Looks like the 49ers are more important than the safety of the kids in my neighborhood.
Posted by Rosey on October 22, 2010 04:13 PM
Sounds like Cedar Fair found a way to strong arm the 49ers by taking the parking away. And I say good for them!
Personally I hope the 49ers NEVER get a new stadium, because the day they do is the day I turn in my season tickets as I will never buy a PSL, BSL or whatever the 49ers want to call it. This year I got screwed out of my front row endzone seats as the 49ers converted them to $295 a ticket Club seats, you know the nice new pretty tan seats that sit 90% empty in the front row of the East endzone because no one will buy them at that price. On TV you see stadium after stadium that have huge sections of empty seats. NFL and 49er greed will eventually kill the golden goose... the true fans.
Posted by 49er fan happy at the Stick on October 23, 2010 03:41 AM
Sounds like Cedar Fair found a way to strong arm the 49ers by taking the parking away. And I say good for them!
Personally I hope the 49ers NEVER get a new stadium, because the day they do is the day I turn in my season tickets as I will never buy a PSL, BSL or whatever the 49ers want to call it. This year I got screwed out of my front row endzone seats as the 49ers converted them to $295 a ticket Club seats, you know the nice new pretty tan seats that sit 90% empty in the front row of the East endzone because no one will buy them at that price. On TV you see stadium after stadium that have huge sections of empty seats. NFL and 49er greed will eventually kill the golden goose... the true fans.
Posted by 49er fan happy at the Stick on October 23, 2010 03:42 AM
Jay, that double asterix above after "lawyer's letter"...
Go to the City of Santa Clara's "City Council Meetings Online" page, then look up Agenda for October 12th. Letter is the very first link of Agenda Item 6B.
Bests,
Bill B.
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Today's SJ Merc (Oct 31st) has another article on this issue, with the NFL commish in London reiterating the funding difficulties given the current economic climate and the impending player contract problems.
Here's the link, minus the front end which Neil doesn't want posted:
mercurynews.com/ci_16480150
The commish said:
"I think (new stadiums) are great for the fans, but the financing no longer comes from the public sector," he said. "A lot of these stadiums are being moved to privately run facilities. And that's fine. It's a transition. But that transition is changing the economics for the owners."
Commissioner Goodell, unfortunately, is double-talking us.
As soon as the NFL gets concessions from the players (sorry, guys, no more 60% of NFL revenues for players' salaries) - they'll be back at the public trough demanding more public welfare for stadiums. Count on it.
Regards,
Bill Bailey, Treasurer,
Santa Clara Plays Fair.org
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