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March 22, 2011
Santa Clara prepays $4M to 49ers for stadium
And the deed is done: The Santa Clara city council yesterday voted 5-2 to hand over $4 million to the San Francisco 49ers to start preparing their proposed stadium site, even though financing for the deal isn't in place yet. Also, even though council members only had two hours to read the contract before voting on it.
Sums up the San Jose Mercury News:
Stadium supporters insist the move is only safeguarding money already pledged to the stadium -- and approved by voters in June.
Yet, the risk is clear: If the team starts spending the city's money to prep the site and then abandons the project, it would be money down the drain -- unless another developer comes in with a new project.
It's also not entirely clear, to me anyway, what happens to the other $36 million in regional development authority money promised to the 49ers if Gov. Jerry Brown succeeds in decommissioning the RDAs. Or why the city didn't just hand over all $40 million to the team now. Though right now it seems like government officials all over California are just panicking about Brown's death-to-RDAs plan, so maybe expecting legislation that makes total sense is asking a bit much.
At the least, by safeguarding money away from the state, by transferring it from the City of Santa Clara to the 49ers, is the first admission the stadium authority is, in fact, a municipal agency subject to asset seizure from higher authorities. This being the case, its a clear possibility our city government will likely have to bailout the stadium authority in the future. If the stadium authority were an independent entity, there should have been no fear of transferring the $4.5 million in RDA funds to the stadium authority.
It's preordained that the city will have to bail out the authority. Unless of course you believe that H.S. All Star football games and monster truck shows are going to bring in big $$ to the city (as has been suggested by some proponents).
A friend of mine just e-mailed me and said Santa Clara is now entering the "black hole."
From the lead memo - which we obtained less than 90 minutes before these two Agency Special Meetings were held last night:
"The Predevelopment Funding Agreement also provides that certain Stadium predevelopment costs incurred by Staddco [49er Stadium Co.] are considered an advance to the [Santa Clara] Stadium Authority."
Please make no mistake: The San Francisco 49ers are demanding that *Santa Clara* cover the *team's* development costs. This giveaway is NOT just about sidewalks and fire hydrants.
We knew this was coming when we saw it in the Assistant City Manager's memo of 12/12/2007. The 49ers Stadium Co., aka Stadco, is the 49ers' vehicle for conveying Santa Clara's money into the team's pockets.
Santa Clara has already eaten $3.4 MILLION of its own stadium development costs - let the 49ers eat theirs.
Bill Bailey, Treasurer,
Santa Clara Plays Fair dot Org
Neil - $4 million is the cash on hand that the RDA has. They can't hand over the entire $40 million at this point because they don't have it - most of it will come as future tax increment.
And note that appended to the agenda packet last night were 54 emails from SC residents - all 54 opposed to the action the council took last night.
If there was $40,000,000 in the bank you can be sure that would had been handed over. All this before an final binding agreement has been made between the team and the city.
You can be sure that this action really improves the city's bargaining position.
The Mercury article says that if the stadium isn't built by 2015, then the team will have to turn over any "unused" monies; not return the money.
Someone commented in the Merc forum that getting any money back from the Yorks will be like getting a piece of beef jerky back from a pit bull...