The DDA - Stadium Financing
The draft Disposition and Development Agreement (DDA) shows that the costs to Santa Clara and its agencies are far worse than the Term Sheet costs, and not what Santa Clarans thought they were voting for in the 49ers Measure J election.
Measure J did not guarantee the $49ers $40 Million in RDA funds
Measure J reads "Contributions to the construction costs of the stadium shall not exceed $40,000,000." Which means that any amount from zero to $40 million from our RDA satisfies what the voters approved.
49ers Measure J only listed two costs from Santa Clara and its agencies:
- A threshold of up to $40 million in redevelopment money. "Contributions to the construction costs of the stadium shall not exceed $40,000,000." Which means that any amount less that $40 million satisfies what the voters approved.
- $35 million from a hotel tax (voluntary, the hotels voted to tax themselves)
- That's it! 49ers Measure J did not list any costs for Santa Clara's Stadium Authority.
- When Santa Clara was taken to court in April 2010 by a resident who asked for full disclosure all of the Term Sheet costs on the 49ers Measure J ballot, Santa Clara's city attorney argued successfully in front of a Superior Court judge that because CA state law does not require cost disclosure on city-wide ballot measures, there was no requirement for the city council or the 49ers to disclose costs to taxpayers. The Stadium Authority costs were purposefully left off of the 49ers Measure J ballot. (Note that CA state propositions and county-wide ballot measures do require cost disclosure.)
The City Council study session on Dec. 6, 2011 revealed costs that are far different from what Santa Clarans voted for:
- Santa Clara's Stadium Authority (SA) will take on $850 million in loans for construction, taken out at the start of construction.
- The $850 million in loans will have $75 million in interest due during the estimated 2 years of construction. The $75 million will also be taken out as a loan at the start of construction, making the total $925 million taken out at the start of construction by our Stadium Authority.
- The NFL will loan $150 million to Stadco (the 49ers stadium Limited Liability Company) to spend on 'tenant improvements'.
- There is no dollar amount listed for any contribution from the San Francisco 49ers or their owners, the Yorks. This is contrary to the campaign mailers/ads featuring our pro-stadium city council members that claimed the 49ers were paying for almost all of the stadium costs. (See here for more details)
Here's the flowchart of stadium construction costs (Source: SF 49ers).
Note that there are zero dollars flowing directly from the 49ers, and the $75 Million in loan interest isn't shown:
The Bottom Line: The DDA is inconsistent with both the Term Sheet and the 49ers Measure J. The voters only authorized our city council to spend $40 million in RDA funds and $35 million from the hotels. There was no voter authorization for any city agency to taken on massive loans on behalf of a private party.