By Robert Haugh
The Santa Clara County Civil Grand Jury issued its second report in two days focused on Santa Clara and the 49ers.
Tuesday’s report focused on the bad behavior of the 49er Five.
On Wednesday, the Grand Jury released a report evaluating the 10-year-old stadium deal and concludes that the team “outplayed” the City.
Mayor Lisa Gillmor responded with a post on Twitter/X:
The Grand Jury report’s summary lays out the good, the bad and the ugly.
The Good
As promised by Measure J, the City’s General Fund has been protected, Stadium debt has been paid down, and reserves have been funded more quickly than originally planned. But the revenues that were promised to the City, which were actually quite modest at about 1 percent of the City budget, have been hard won.
The Bad
The Stadium Authority Board/City Council, both past and present, have compounded the issues by 1) allowing changes to the already 49er-friendly terms in Measure J to be adjusted in the Stadium’s legal agreements to further and materially benefit the 49ers; 2) giving away what little leverage and control they did have in settlement agreements; and 3) relinquishing its power to the 49ers over the last decade. By taking a passive role in its oversight duties, the Board has undermined Stadium Authority staff.
The Ugly
Furthermore, 49er entities have inserted themselves into the local political landscape; 49er-funded independent expenditure campaign contributions for the last two election cycles in the City of Santa Clara (City) totaled over $7.5 million. This has led to divisiveness, distrust, and rancor among City leaders and garnered distrust from the residents.
Here are the 20 Findings from the Grand Jury report:
Finding 1 From the beginning, the City was impatient and overmatched in its negotiation posture with the 49ers to the long-term detriment of the City/Stadium Authority.
Finding 2 The City has not studied the actual economic impact of the Stadium. The 49ers have produced their own studies, which they use to tout long-term unverified benefits and frame all discussions surrounding the success of the Stadium.
Finding 3 Measure J’s promise to protect the City’s General Fund has been realized. The funding structure from the Stadium Lease has successfully allowed the Stadium Authority to pay off Stadium construction loans and fund required Waterfall reserves faster than originally planned.
Finding 4 The City/Stadium Authority agreed to use ManCo, an affiliate of the 49ers, with an inherent conflict of interest to handle the Stadium Authority’s financial interests in non-NFL events.
Finding 5 The City/Stadium Authority failed to ensure that the Management Agreement included a fair termination clause.
Finding 6a The City/Stadium Authority failed to ensure the Management Agreement provided the Stadium Authority with full access to financial records.
Finding 6b ManCo’s financial transparency with the Stadium Authority has improved with the implementation in 2022 of a new financial management system.
Finding 6c Transaction-level testing generally supports ManCo’s reporting of financial results for non-NFL events.
Finding 7a The City/Stadium Authority failed to ensure that the original Management Agreement and the 2022 settlement agreement contained sufficient language requiring specific items or methods and performance metrics to prioritize Stadium Authority revenue generation. This has resulted in a failure to hold ManCo accountable for the success of non-NFL events.
Finding 7b The Stadium Authority failed to use the prescribed Marketing Correction Plan per Article 3.3.1 of the Management Agreement process to hold ManCo accountable for unsuccessful non-NFL event bookings.
Finding 8a There is no evidence showing that ManCo is negotiating to maximize Stadium Authority profits for non-NFL events.
Finding 8b The Stadium Authority has failed to ensure the Management Agreement requires ManCo to incentivize its staff to prioritize the Stadium Authority’s success. There is no evidence that there are employee sales goals, metrics, or consequences related to unprofitable non-NFL events.
Finding 9a StadCo/ManCo interprets the Stadium Lease to require non-NFL ticket surcharges be applied to tickets associated with Rental and Trophy Luxury Suites, but failed to remit all corresponding surcharges to the Stadium Authority.
Finding 9b StadCo/ManCo interprets the Stadium Lease to not require non-NFL ticket surcharges to be applied to Seating Bowl complimentary tickets and Owners Club Luxury Suite tickets.
Finding 9c Suite ticket revenue submitted to the Stadium Authority does not account for suite ticket revenue for certain suite attendees.
Finding 10a Most revenue from non-NFL events goes to the promoter, which is typical. StadCo can make money on luxury suites regardless of the event’s profitability for the Stadium Authority.
Finding 10b The Stadium Authority is unaware of the market revenue potential for non-NFL events at the Stadium. The Stadium Authority does not know what net revenues should be expected for nonNFL, ticketed and non-ticketed, events.
Finding 11 Per the Stadium Lease, the Stadium Authority failed to negotiate pertinent details about buffet costs in the contract, such as parameters on cost thresholds and alcohol. The Stadium Authority accepted responsibility for buffet costs but failed to follow up when the expense was omitted from ManCo’s budgets.
Finding 12 A Multi-Use Community Facility at the Stadium was one of Measure J’s original promises and was memorialized in the Stadium Lease. The current designated space for the Community Room at the Stadium is not easily accessible nor is it pragmatic for most civic events.
Finding 13 The FIFA World Cup commitments for the City and the Stadium Authority were made without consultation with the City/Stadium Authority.
[…] The report was released last month. The Grand Jury evaluated the 10-year-old stadium deal and concluded that the team “outplayed” the City. […]
At the end of the report, the Grand Jury had a list of recommendations. They are practical, reasonable, and common sense suggestions. Most who post here probably don’t think they go far enough, but maybe we should get the basics done first.
Can we demand that the council vote on and pass all of the suggestions? If the “49er 5” refuse, can we then all unite behind candidates who promise to implement the Grand Jury recommendations as soon as they are elected?
Robert,
Your graphic stating that the Forty Niners have gotten nine million from concerts and the city nothing is inaccurate and deceptive.
Profits were made to split with the city but those profits were held in a legal contingency fund due to the city wanting that in case litigation required it. While I think it is an unsettled question whether or not the city has gotten its fair share the fact of the matter is that in the last couple of years there have been millions of dollars in profits split to the city. The city chose to put them in a legal contingency fund rather than into the general fund.
And in fact since the litigation was ended then the funds will be going into the general fund. It is a matter of debate whether or not the litigation should have been settled as it was but it is a fact that settlement leads to the city taking millions in profits out of the contingency fund and directing it to the general fund.
“Your graphic stating that the Forty Niners have gotten nine million from concerts and the city nothing is inaccurate and deceptive.”
You’re absolutely right because Jedboy got a helluva’ lot more thanks to THEIR deceptive negotiating with an unmatched City staff and took advantage of that! And then Jedboy got a great rate of return after he “hired” a city council that gave him even more $$$ back of course the original 49er 5 helped too and received a lot of dough, ray, me and signed the dotted line in 2010 that brought this unscrupulous pandemic to Santa Clara. And the civil grand jury even says there’s nothing that can be done.
So thanks to Mahan, Moore, Caserta, Kolstad and Matthews along with Becker, Hardy-har-har, Jain, Chahal and Park for making a former millionaire a billionaire while Santa Clara figures out how to get its ISC opened again!
Frustrated ISC Parent,
I think there is plenty of reason to wonder if the Forty Niners have gotten more than their fair share of profits from nonfootball events at the stadium.
That is not what my comment is about. What my comment is about is that the city has gotten profits too and not zero dollars like the graphic claims. We may not have gotten our fair share but that is a matter of debate. And it is simply a matter of fact that we have gotten millions of dollars in profits.
You should also thank Gillmor and Watanabe for the passage of Measure J. I have very big concerns about the current council majority’s votes on stadium issues but none of them were involved in Measure J except for Hardy who was a voice against Measure J. And for Measure J you can also add thanks to McLemore and Caserta and Steve Lodge.
In the middle of all these reports and blog stories and new articles, I have copies of texts between Becker and Jain that are devoted to insulting LG and Kathy W, as well as Vartan. Why do they do this? What jobs are created, or parks developed? Yes, Kirk has said and done things I disagree with. But I respect his sincerity and his zeal. He has created jobs, made a difference. That is good. For thirty years, LG has made the community better. So has Kathy. Yes, I frequently disagree with them both. But they still are dedicated leaders. Burt Field deserves to be a commissioner. I argue with him on a ton of issues, but I regard him as a dedicated coach. Why is the city plagued with petty little boys like Becker and Jain? Yes, we can have a great Mission City and argue about development vs preservation. But with Jain and Becker, we have snails in the garden.
ManCo has got to go.
“49er 5” have got to go.
Fox’s don’t watch the Hen House.
Inmates don’t run the Prison.
Mental Patients don’t run the Asylum.
Who, How, and Why, did anyone ever think it was a good idea to put the “Renter” in charge of the Rental Property?
It’s going to take some work.
Where I started was my household.
Register to vote.
Next ask any of your kids who live at home / over 18 to register as well.
Then go next door, knock on their door and say Hi.
Ask them if they are aware what is going on with the 49ers and our City?
Give them the links to Mr. Haugh’s website.
All the yelling and screaming is just a waste of time and energy.
VOTE!
And when you do vote what is best for us, not some NFL franchise.
Really in the 10+ years they have been here in our City / Stadium, what have they done for us?
Burt Field
Yes, voting is crucial, but we need someone to vote for. Many have suggested you run for city council. Do you see that happening? I would love to vote for you.
Wow, another zinger describing how poorly our city is treated by the 49ers. I could be wrong, but it seems to me that a ton of money came from the city utility fund to help finance the stadium. This was used so they could say general funds weren’t used.
Oh yes, the city was outplayed, that was obvious then, but this makes it clear we are still being outplayed. We need to get a council majority on our side and then tighten the screws. No way the 49er five would vote to put the squeeze on their sugar daddy.
Howard
You get an Attaboy for encouraging Burt.
Now can you encourage 10 people to get him 100 votes each?
Then can you getv20 more to get him 50 more each?
Field needs 2000 votes by Oct 15.
Mr Haugh gets a compliment. He did right. Does it surprise anyone that i have just receive texts between Jain and Becker for May 2024 referring to LG and KW as hypocrites and insulting Vartan?
The root of the problem is Jain and Becker. Two adult children. Two political whores.
Jed can’t win Super Bowls so he fleeces the City of Santa Clara instead. Go f*** yourself, Jed!