25 April 2007

49ers and (some of) the details

Good session tonight. The 49ers seem to be improving on the PR front. Before I get into that, here's what I got out of the council session.

  • The current stadium estimate is $854 million, including $111 million in inflation costs associated with a 2010 construction start date.
  • 81% of the project funding would come from the team, the NFL, and various advance stadium revenue sources (more on that later).
  • 19% would come from $160 million in City-derived funding.
  • That $160 million contribution does not include money for a garage that would have to be built to accommodate parking requirements for Cedar Fair, the company that currently owns and operates Great America.
  • The contribution also does not include money for a potential relocation of the on-site power substation. The Merc pegs this cost at $20-30 million.
  • The league's G-3 loan program has been exhausted and it is not known if the 49ers will be able to utilize the "club seat waiver" facility used for other stadiums. The league and the team are still working on the source.
  • The team would cover cost overruns.
  • A stadium authority would be created to collect project revenues, own and operate the stadium.
  • Some revenue would be captured for use in a stadium improvement fund, which would be utilized every 5-7 years.

What isn't known is what the stadium authority actually is. Sure, it's a quasi-public governing body, just as the Coliseum Authority or a mass transit joint-powers authority is. Beyond that, we're getting into a gray area. When one resident asked if the stadium authority was really just an extension of the city (and as such the city would be liable for financing), 49ers CFO Larry MacNeil simply said that the project would not touch the city's general fund.

Okay, but that doesn't answer the question. Stadium authorities are sometimes created to pool resources from various jurisdictions, but that doesn't appear to be the case here as the team would be dealing almost entirely with the city. If the authority is asked to issue bonds and the city owns the authority and the stadium, then it stands to reason that the city is ultimately responsible for a lot of the debt service. Honestly, it makes sense for the 49ers to ask the city to move in this direction since it would allow for access to lower interest and/or tax-free bonds. MacNeil was very careful not to specify which method of city funding would be required. One more interesting tidbit: the Authority would hire 69 full-time employees once the stadium is up and running.

Notice the fine print in the "Stadium Authority Project Funding" line item. There's a ticket tax, naming and pouring rights, the usual suspects. But there's also one other item that doesn't look that familiar: Stadium builders licenses. Care to guess what those are?

The team predicts that almost 50,000 game attendees would travel by car and park in the nearby area, which has 32,500 parking spaces within 1.5 miles. The other 18,000 would travel via some mode of public transit.

While I can't argue with the charter bus estimate, the light rail number is overly optimistic. If anything, I can see it used by people who want to park at a VTA Park-n-Ride station (Great Mall, Tamien, Evelyn) and want to avoid parking fees and hassles. Those people would be missing out on tailgating. Tailgating is much more integral to a football experience than any other sport, so I'm skeptical that many would willingly take this option. It doesn't help that only a limited number of 49ers fans even have access to VTA light rail. It's also not known if the VTA estimate contains Caltrain users who might transfer in Mountain View to get to the stadium. Caltrain doesn't have a station within a 3 mile drive of the stadium. A transfer would be required via light rail, bus, or even Capitol Corridor.

The block of Tasman Drive immediately north of the stadium site would be closed on gameday to allow for safe pedestrian circulation between the convention center, light rail station, and the stadium. Several major intersections would have limited or no cross-traffic to funnel stadiumgoers to and from the venue more quickly. Additionally, nearby residential neighborhoods in both Santa Clara and Sunnyvale would have restricted access to prevent fans from parking there. This policy is already in place on one day per year: Independence Day. During the fireworks show, 101 turns into a parking lot.

As for available parking, the 49ers have already talked with several nearby office park landowners and businesses about using some of their spaces. The landowners would get the majority of the parking revenue, while the rest would go to the Authority via parking fees and the remaining revenue cut. Yahoo! bought a large swath of land located kitty corner from the nearby Hilton, and while I don't think they'll design their parking facility strictly with football parking revenue generation in mind, they may want to figure out ways to bring fans in to check out Yahoo! technologies in the nearby tech showcase center. On a related note, West Valley-Mission Chancellor Stan Arteberry endorsed the project, no doubt seeing dollar signs in potential parking revenue (Mission College is slightly under 1 mile southwest of the stadium site).

I'll end tonight with one more table that shows the various costs and revenue sources. Keep in mind that the revenue projections shown are net of debt service. I'll have more thoughts on these numbers tomorrow.

Update 11:30 AM - There were a few more observations I wanted to put into the original post but it was getting late and my brain was fried.
  • Vice Mayor Kevin Moore suggested the possibility of building flexible space into the stadium that could be used for offices, retail, or even an annex for the Convention Center across the street.
  • 49 officers would be required on game days for all manner of functions. Some would come from surrounding jurisdictions such as Sunnyvale and San Jose, possibly the Sheriff.
  • When the parking and traffic diagram was shown, I couldn't help but think of FedEx Field, which has a similar sprawling parking structure. What Santa Clara has over Landover, MD is a vastly superior freeway infrastructure.
  • A better parallel may be Qualcomm Stadium in San Diego. The venerable "Murph" is in the middle of several freeways and a few major arterial roads. Tasman Drive has its equivalent down south in Friars Road, an east-west arterial that repeatedly gets clogged before and after home games.
  • The team intends to have the CEQA process start in August or September, making the window for the council to make a decision on the project only 3-4 months.
  • Santa Clara residents may have a shuttle available to them from an offsite parking lot only they can use.
  • Debt service on the facility would run 25 years. The lease would be 30 years.


Mike Jones said...

Wow, that was a great breakdown of what went on. I read the Mercury News' article first then I read yours. I honestly feel the Mercury should copy and paste yours on their site.

Jonclaude4 said...

Estimating 49er PSL price...Does anybody remember what the range of Raider PSL's were?


Airblair said...

I've said this before: This blog should really be focused on the activity surrounding all the new stadiums in the Bay Area, including those for the A's, Niners, Giants, Stanford, Cal, SJSU, and the Earthquakes.

And this isn't a criticism. MarineLayer obviously puts a lot of thought and a lot of work into each blog entry, including those that on the surface have nothing to do with the A's stadium.

In short: this blog is an excellent source of information for Bay Area stadium construction.

Marine Layer said...

I don't have deadlines as the Merc writers do. I saw that Julie Patel was nearly finished with her article shortly after the end of the session. I'm glad this format allows me to write in a more deliberate manner.

IIRC the Raider PSL's were $250-4000 but did not have lifetime rights.

Anonymous said...

Interesting to see how much more open the 49ers are as to the details on the financing of their proposed stadium than are the a's. Wolff plays this endless shell game and behind the scenes political games while at least the 49ers come forth clearly with the full picture.

Marine Layer said...

The 49ers did not present a full picture. If the Authority is tasked with raising additional bonds above the $160 million outlined in the proposal, then the presentation itself is misleading.

What's more, the 49ers are only presenting this much information because they have no choice. They are not financing the venue themselves and it is abundantly clear that the financing methods are not clearly laid out or finalized. If you think what the 49ers presented is coming forth "clearly with the full picture" you need to read a little more thoroughly.

peanut gallery said...

A note on the parking garage: from what I've read this was already being planned outside the 49ers stadium for use by the convention center and is already funded (or at least mostly). I also read that the location could change, however, to accomodate the 49ers. So the cost for the garage is to a large extent already covered, although there could be incremental cost by changing the location.

I'm very curious about the lower amount. Everyone was expecting $180K-$200K from the city. Perhaps the team leaked that amount so $160K would look like a "bagain."

Anonymous said...

Well if anyone thinks that wolff has laid ANYTHING out clearly, they are sadly very naive.

Marine Layer said...

I've been very critical of Wolff for not releasing information. Heck he even acknowledged my criticism in the KLIV radio interview. If you think that I'm some sycophant you are sadly mistaken.

For instance, if Wolff suggests that Fremont have its own Stadium Authority-type structure as the Niners are pushing, I'll be all over that.

Anonymous said...

Why do you think that Wolff hasn't been very forthcoming then?

bbison said...

More recent PSL prices for comparison's sake:

Philadelphia Business Journal - July 10, 2001

The Philadelphia Eagles unveiled plans to sell one-time "stadium builder license" fees, ranging in price from $1,530 to $3,145, to current season ticket holders -- but only for about 40 percent of the seats in their new stadium set to open in 2003.

Joe Banner, the executive vice president and chief operating officer of the Eagles, said the sale of SBLs will raise between $50 million and $60 million, which will be used exclusively for stadium construction costs.

Only Club seats and prime seats has PSLs in Philly.

The Chicago Bears initial prices in 2003: Original prices per PSL(Discounted price as paid by prior season ticket holders):

Zone A: $4,400 ($3,740)(LL bet 20's)
Zone B $2,700 ($2,295)(LL G-20)
Zone C $1,300 ($1,105)(EZ-G)
Zone D $900 ($765)(EZ)

Zone E: $4,500 ($3,825)(MZ bet 20's)
Zone F $3,700 ($3,145)(MZ EZ-20)

Zone G $3,900 ($3.315)(UL bet 20's)
Zone H $2,800 ($2,380) (UL EZ-20)

Club 1 $10,000($8,500)(40-40)
Club 2 $5,300 ($4,505)(10-40)
Club 3 $2,900 ($2,465)(EZ-10)

Again, about 40% of the total tickets as PSLs. As the proud owner of 4 of those in Chicago, the plus side of owning them in a small stadium/large market is that fair market value is 2-4X what I paid. While small markets like Cincinnati and Nashville see them re-sell at a discount.

It will be interesting to see what level the 49ers start out at, knowing how badly the Raiders PSL attempts went.

Marine Layer said...

The 49ers stadium is much more simple than the ballpark village because it's a single entity deal - the stadium only. It's a fairly commonplace deal other than the specific funding mix.

The A's on the other hand are creating a neighborhood around a ballpark. There are so many more variables to consider that it can be overwhelming. While I'm disappointed that they've had delays, I understand. When Wolff says it's the most complex project he's ever done, he's not kidding.

BleacherDave said...

ML, I want to echo an earlier poster. You do an amazing job on this blog. Your resourcefullness is amaing.

"The A's on the other hand are creating a neighborhood around a ballpark." San Diego and St. Louis' new parks were also premised on concomitant village development. Might this be a good time to review the history and status of those deals to see how they are going, and if there any lessons to be learned?

Marine Layer said...

Good idea BD. I'll fashion a progress report on those and other similar developments for the weekend.

freeesanjose said...

Am I being overly critical or is the 49er estimation that they can host 14-20 non-NFL events a year at this stadium way overly optimistic? It seems there are only about 8-10 of these in the Bay Area a year and don't see how they could possibly attract this kind of crowd. By my estimation, they might play 1-2 college games, 2-3 Int'l soccer games, 2-3 concerts and 2-3 other events (and I think that's all on the optimistic end). It would also entail attracting almost all the business that currently goes to PacBell, Stanford and the Coliseum. There's no way they can, in good conscience, pitch this as a realistic revenue stream, is there?

Anonymous said...

The new stadiums do not want tail gating. It takes revenue away from the stadium anD PRESENTS A LOW CLASS IMAGE.

bbison said...

Just to update my earlier post, here's an idea of what PSLs might sell for:

(Note that they don't actually have any to sell except a couple of singles, but if they did by revocation or non-payment, that's what they'd sell for from the team.)

mike jones said...

Really and who told you that anon 4:36?

Jonclaude4 said...

Excellent reference BBISON, especially the section "how PSL's work" for us uninitiated.


anon-a-mouse said...

mike: I'm going to guess it was the Easter Bunny.

Meanwhile, those of us who have been paying attention know that one of the main reasons Candlestick Point fell through is the team's concern over lack of tailgate space in SF's plan.