29 May 2009

New 49ers price tag: $937 million

The Merc's Mike Swift has a good overview of the 27-page term sheet released by the City of Santa Clara earlier tonight (more here). New cost is $937 million, which includes the PG&E substation relocation and the parking garage across Tasman from the stadium. I gave the term sheet a quick look. Here are the raw notes I made on the document(s):
1. City contributions: RDA is pledged to give $42 million, including a $12 million loan from the team. Reimbursement can occur through additional pledged source revenues (hotel taxes). Hotel taxes - $35 million. $20 million from Silicon Valley Power. $17 million for new garage.

2. Facility rent is $5 million/year. Ground rent is $180k first year, add'l $35k per year after that up to $1 million/year. Revenue goes to SA.

3. All parking and concession revenues are to be controlled by the SA.

4. Team revenue is defined as::
  • Ticket revenue (excluding ticket fee/tax)
  • Premium seat revenue
  • Team service revenue (equipment/technology rental)
  • Ad/sponsorship revenue

5. Second team provisions
a. $28 million of RDA money is refunded
b. Add'l $1 million ground rent, goes up $100k every 5 years starting in year 11
c. 49ers responsible for all costs to bring a second team in - except in temporary (2 year max) situations

Stadium Authority
A. City claims that it is not responsible for financial condition of the SA.
B. Yet SA's board will include City Council members
C. SA revenue sources
  1. Stadium Builders Licenses. There are references to "an entity experienced in the marketing and sales of SBLs." Oakland Football Marketing Association, anyone?
  2. Naming Rights - A portion of construction bonds may be secured solely from Naming Rights sort. They will obviously have some kind of annual revenue target. If, through investigation, potential deals fall short of the target? What will they do: wait for the targeted number (Cowboys), or approve a lower revenue deal?
  3. Ticket fee/tax
  4. Upfront Vendor Payments - concessions and pouring rights
Construction of SA-designated part of project can only continue as long as SA is properly funded. That makes the dilemma in #2 above something of a showstopper. It's hard to get a loan secured by naming rights done if there's no naming rights sponsor. Which makes me wonder: Do they already have the naming rights sponsor in hand? When the idea first came up in 2005, I was led to believe that the likely candidate was Yahoo, which is no longer in the kind of fiscal shape to make such a deal. Then again, maybe it's Intel, who's no stranger to major advertising and sponsorship pushes.

Again, there is no mention of what occurs in case of an SA revenue shortfall.
The inclusion of the "Second Team" terms is interesting, but there isn't any significant accompanying information to appraise it. Councilman Dominic Caserta asserts that bringing the Raiders (the document goes out of its way not to mention the team by name) in will make the project a slam dunk. It's a bit premature to say that, though there's no doubt that having the Raiders on board will definitely help pay the bills.

I'll save the extensive review for after the City Council meeting.


Anonymous said...

Having both teams play at the same site would be kinda cool. I wonder if it would be possible to have a football double header? One team plays at noon and the other in the evening.

I also read that the 49ers don't have to change their name. It'll be pretty weird to see the "San Francisco 49ers" play in Santa Clara. I'm sure the fans will just end up calling them the "Santa Clara" or "Silicon Valley" 49ers.

Anonymous said...

I doubt anyone will refer to them as the Santa Clara 49ers, any more than anyone says Elizabeth Giants, Orchard Park Bills, Irving (now Arlington) Cowboys, Miami Gardens Dolphins, or Landover Redskins.

Anonymous said...

They won't play a football double header; the cleanup/reset time is too long. The Fiesta Bowl was screaming bloody murder that the NFL scheduled a Cardinals game only 24 hour before their game, rather than the 48 hours required by their contract.

Anonymous said...

The San Francisco Paper story was good also. Boy the Santa Clara schools are going to make out great! Looks like Santa Clara just put together a great deal at the absolute best site for a Stadium. No selling or giving land away, or Development Rights schemes in another part of town and even a direct return to General Fund. I am in. To bad there wasn't enough land out there for a A's ball park. I work out there and there is no other location that has widened and maintains its roads for traffic flow like Santa Clara.

Go Niners

Santa Clara Mac

Paul said...

Stadium naming rights money? Know who bought the naming rights to the new Cowboys stadium? Nobody.

Corporations aren't ponying up money for this sort of thing right now. Who makes up the shortfall in funds if there either is no naming rights sponsor or the rights are sold for significantly less than expected?

A $79 million gift by the people of Santa Clara for San Francisco's football team? Huh? Why not Santa Clara 49ers?

Remember: $79 million from a city of 100,000 for a stadium used 10 days a year vs. San Jose (a city of 1 million) paying $135 million for an arena used 200 days a year.

This is still going to be a tough sell to Santa Clara voters. And to concert promoters who may be reluctant to book a concert venue that has noisy jet planes flying overheard. Anyway, how many acts these days are big enough to sell a place with 68,000 seats? The Who and the Rolling Stones are pushing 70.

Tony D. said...

SC Mac,
While, yes, there won't be any land deals regarding the Niners and SC, SC will be paying for some of the Niners stadium, as oppossed to SJ not paying anything for Cisco Field downtown. I guess you could say land deals in SJ are = public contributions in SC.

And yes, while SC/Great America is a perfect site for 10 (or 20) NFL games per year, Diridon South/downtown SJ is perfect for 81 games per year MLB. Better absorption of MLB crowds in a downtown setting vs. freeway/parking lot model (been there, done that).

Josh Santos said...

$79mil is a steep price, but I think it could be recouped over 20-25 years.

The $17mil garage should pay for itself if the city gets to keep most of the revenue from it. Perhaps there could also be some shared usage with Great America.

The rest of the amount can be made up for from the economic impact of the stadium, which will likely encourage new businesses to open in the immediate area, generating more taxes for the city.

One last thing to keep in mind is that the south bay has a ton of great jobs and housing options, but not a tremendous amount of "things to do" as compared to other regions of our size. I would consider this an investment in resident satisfaction in addition to being purely a business decision.

Jeepers said...

Mr. Davis, please don't let the Raiders leave Oakland.

Anonymous said...

Golly gee, Mr. Davis would never let the Raiders leave Oakland, just because he thought he had a better stadium deal elsewhere.

Anonymous said...

If the Raiders are handed an opportunity for equal partnership in a brand new stadium they didn't even have to work for, they'd be crazy not to take it. You should just be hoping they land in Santa Clara and not in Industry.

There's no way two billion dollar football stadia are going to be built in the Bay Area, so the only way I see the Raiders staying in Oakland for the long haul is if the Santa Clara deal derails and the Niners are convinced to share the Coli site. They'd have to be persuaded it's a better option than the Hunters Point fallback and Roski's stadium in Industry themselves, so there are a lot of "ifs" which would have to happen first. It seems like a bit of a longshot.

Jesse said...

Will the Niners call the Raiders? Or are they planning to call the Raiders in case of emergency. I dont think the Raiders will call the Niners.

Anonymous said...

Jesse---the Raiders and Niners have already been talking--as is mentioned by Trask of the Raiders in the article---

First things first--get the stadium approved by the voters of SC and then you will see the negotiations with the Raiders move forward very agressively---

Jeffrey said...

Ancillary development in Santa Clara around Great America? Where? The site is smack dab in the middle of a bunch of occupied corporate parks.

I don't live in Santa Clara, but if I did I would be scouring the interwebs for information on prior stadium developments and their economic impact.

Building a billion dollar football stadium and investing less than 10 per cent seems like it could be okay, but I am skeptical.

Jesse said...

but, I think ML hit it on the head a few posts back when pointing out that the Raiders are in a great position. The Raiders can sort of wait everybody out and then go for the best option.

Anonymous said...

Cedar Fair has asked the city to hold off voting for a couple of weeks. The city said "no thanks." I hope Santa Clara isn't being a bit too cavalier about Great America. They're an actual paying tenant and entertainment option. The Niners are not...yet.

Anonymous said...

Cedar Fair is just looking for a bailout.