This is an archived version of a Field of Schemes article. Comments on this page are closed. To find the current version of the article with updated comments, click here.
September 20, 2011
49ers buy amusement park that had sued to block Santa Clara stadium
The San Francisco 49ers don't have to worry about the on-again off-again lawsuit threats by the owners of the Great America amusement park near the team's would-be Santa Clara stadium site. That's because the 49ers are about to become part-owners of the amusement park, as part of a consortium spending $70 million to take it off the hands of its current owner, Cedar Fair.
This would be huger news a couple of years ago, when Cedar Fair was the primary obstacle to the Niners' stadium dreams. Now, with the bottom having fallen out of the team's private financing, they have bigger fish to fry. Maybe next they can try buying a bank.
Well, some are saying that they have in fact bought the bank, or using the City of Santa Clara as their personal ATM anyway.
So this may be an admission that the parking solutions were insoluble and the plan for area businesses to share their lots never made any sense. Now is it onto the pesky business of running an amusement park? I wonder what the exit plan for the 49ers is if the stadium financing doesn't come through or "I wanted a NFL stadium and I got the dip dipper instead".
If you can't beat 'em, buy 'em...
they'll probably use the amusement park grounds as their "experience" revenue generator. If you go there you'd better like football and bring a large bankroll !
The 49ers essentially greased Cedar Fair to take care of the lawsuit, but not a bit of that makes the massive stadium subsidies any more worth it to Santa Clarans - the stadium means lousy job creation as well as "economic activity" essentially locked up in the stadium, benefiting only the 49ers and not our city.
Also, the current theme park lease is very clear that only a recognized "amusements operator" with a real track record is permitted even to run Great America. Neither the 49ers nor JMA qualify.
When the 49ers tire of spending their NFL lucre to keep up a theme park with lower returns than than the team - they'll be whining and crying for changes in lease terms. Santa Clarans will again be on the losing end.
We need very strict controls - many more than we're getting out of the stadium deal - to make sure that the 49ers never allow Great America to reach the state that Candlestick Park is in today.
If that happens, maybe we'll finally learn the hard way that the San Francisco 49ers can't possibly carry Santa Clara's Entertainment District.
Not with a measly ten games a year, and with one of those very possibly in Europe.
Bill Bailey, Treasurer,
Today's Santa Clara Weekly says that the GA purchase with "an entity affiliated with the 49ers" as a small partner will not only make the threat of a lawsuit go away, but allow the 49ers to build the stadium elsewhere in GA's parking lot instead of in the overflow lot.
The lease requires an experienced amusement park operator to manage the park, so JMA will have to hire another firm to do the management. And there are concerns expressed on the online newspaper comment boards here about upkeep of the park - concerns fostered by the current state of upkeep of Candlestick.
There are "concerns around the upkeep of the park"? GA is not a very well maintained property today and the clientel has alot to be desired-my kids are only allowed to go there during the day--too many gang bangers at night with little security---acquisition by the 49'ers and their partner will be a significant upgrade over Cedar Fair that has been trying to dump the property for years.
Not sure why people are worried about the JMA's (and whomever they hire) ability to upkeep Great America based on the condition of Candlestick Park. Remember the Niners (and more importantly JMA) are not responsible for maintaining Candlestick Park, the city of San Francisco is the responsible (or irresponsible) party. So that argument is a red herring.
"are not responsible for maintaining Candlestick Park, the city of San Francisco is the responsible "
Um, yeah, and they aren't likely to maintain our theme, park either, regardless of their relationship with JMA.
The argument is no "red herring," as you put it - it's a legitimate concern since the 49ers cannot possibly carry our entertainment district with just ten football games a year.
Let the park go to the dogs - the 49ers have no motivation to maintain Great America - and Santa Clarans lose big time.
At least at present, Great America is in a lot better shape than Candlestick Park.
You can trot out any excuse you like --- but none of this makes the 49ers stadium subsidy any kind of "deal" for Santa Clarans.
Bill Bailey, Treasurer,
Lets do some simple math here guys....I will keep it real simple.
The SC City Council believes they got the deal of a lifetime and lets see why:
Santa Clara (444M)
74M- Hotel Tax
330M- Naming rights, Stadium Builder Licenses (SBLs), ticket sales, and advertising contracts.
I will underestimate each piece:
1. Naming rights- New York and LA got 425M and 700M each from MetLife and Farmers. Lets assume 250M here....That is a fair, very low # one can argue
2. SBLS- If 173M in suites have already been sold that tells you SBLs will sell as well....much cheaper than a suite. Lets assume each SBL costs $7,000 average x 35,000 seats= 245M. The stadium holds 68,500 seats so I am assuming only half are sold with a SBL.
3. Tickets, advertising- With 250M+245M already secured, that is nearly 500M. The # SC needs is 330M for this portion. Ticket sales and advertising are just "icing on the cake"....So why even do the math on it?
Santa Clara got one of the best stadium deals in the country. SC will be one of the richest municipalities in the country when this is said and done.
I know 180k only goes into the GF the first year but the tax-sheltered Stadium Authority will have so much money it can only help SC out.
It is not like they are not going to spend some of that cash on improvements to the city or with schools in the "long run".
Santa Clara saw this from a mile away and did an excellent job of negotiating with the 49ers. They essentially got every big ticket $$ piece from them to fund their own piece.
All the 49ers got was luxury suite sales and the NFL loan forthcoming.
I ask...Who will have a harder time paying debt service? 49ers by far, Santa Clara will be "sneezing" at debt service for their portion.
I see why the citizens, school board, and city council are all behind this.
It is obvious Santa Clara Plays Fair does not like sports or knows anything about it. Sports keep kids out of trouble and SC will be able to build all sorts of Community centers, fields, libraries, improve schools etc...with this project.
Sorry, Sid, but your numbers are almost completely inaccurate:
1...You'll have to tell the truth about the Farmer's Field naming rights deal if you want to make claims about some deal for Santa Clara - Farmer's Insurance has required that AEG/LA book the stadium for FIFTY events per year, and that EACH of those events (not an average thereof) fill at least 40,000 of those seats.
Santa Clara: 17 non-NFL events per year for a total of 27. No fair counting big wheels and local soccer matches; they will barely help us pay off the massive debts from the stadium subsidies.
That's why similar claims on naming rights for a stadium in Santa Clara are total nonsense. The comparison we should be looking at is Candlestick - which yielded a miserable $1.5 million a year from Monster Cable. Los Angeles' deal teaches us nothing.
2...Not a penny of those luxury box proceeds go to any Santa Clara Agency, Sid, so they do not help us pay off a single cent in stadium debts.
SBLs = PSLs. The same thing that left such a stink in Oakland. Sid, when you're ready to pay $20,000 for a single seat on our fifty, then you can call your PSL what you want.
You will never see half of those 68,500 exempt from PSLs, either - it'll be a much lower number than that. Promise. Reason: The 49ers just stuck the Stadium Authority with selling them. We will be on the hook for so much dough, we will never be able to make enough off of those seats if we license only half of them.
3...Ticket Revenues are nearly entirely NFL Revenues, and go only into the pockets of the 49ers. There are a few measly surcharges as a nod to the Santa Clara Agency that really paying the bills, but that's insignificant.
Your $330M is completely inaccurate, Sid, because you're using numbers from spring of 2010. In the June 7th, 2011, City Council meeting, we got the news: NOW - one year after Measure Jed - the 49ers are only going to pay a mere 15 to 25 percent of the total costs of the stadium. This means that the actual debt load down to all Agencies of our city, plus the Mello-Roos Hotel District will be upwards of $700,000,000 --- and it may end up being even worse than that.
The Stadium Authority will NOT be helping our city's General Fund in any way, because it would be against CA law to do so. It is a joint powers authority charged with putting what it takes in strictly toward the stadium.
The Stadium Authority will also NOT be helping our schools, because they cannot legally do so. The 49ers contribute not one penny to Santa Clara Schools, and neither does their stadium - all they did was to exploit the schools funding problem in order to get Santa Clarans to vote for Jed. Our city's General Fund gets ripped off instead.
Also, the Stadium Authority is NOT "tax-sheltered," as you put it, for the reason that the bonds it issues cannot be tax-exempt. They reason they cannot is because the 49ers stadium is not a municipal park or arena for us, it's a subsidized goofbowl which only pays the 49ers, year after year.
The only party being "tax-sheltered" are the 49ers themselves, because instead of paying the property taxes on their stadium, they will be liable only for a Possessory Interest Tax based on the ten days they play games there - not the 365 days over which they will actually be controlling it.
As for your claim that the 49ers will have a tougher time paying off what it borrows, that's total nonsense, Sid. And the notion that streams from Naming Rights and your PSL are going to cover that is simply untrue.
It is quite obvious that you've come in with the same falsehoods as before.
Repeating them tenfold does not make them true, Sid.
Read up on the real deal on our city's website - updated every City Council Meeting since 2007 - then try us again.
Always a pleasure,
Bill Bailey, Treasurer,