By Robert Haugh
Santa Clara Stadium Authority Member Kelly Cox issued a blunt warning about Levi’s Stadium finances at Tuesday’s Stadium Authority meeting.
The stadium is headed toward a “financial cliff,” while millions of dollars in approved capital projects remain unfinished.
“Anybody paying attention knows, we’ve hit a financial cliff and we really need to start solving this problem,” Cox said.
Cox said the issue isn’t simply that the aging stadium needs more money for repairs and improvements. She said the 49ers’ stadium management company has repeatedly failed to complete projects after the Stadium Authority approved the money.
According to Cox, over roughly the past decade the Stadium Authority approved about $130 million in capital spending but only about $33 million (approximately 25 percent) was actually spent.
This year, she said, the Stadium Authority spent about 49 percent of its approved capital budget.
“We cannot continue to budget tens of millions of dollars and have a fraction of that done,” Cox said. “Inflation costs go up. The cost of projects rise.”
Cox said those delays could now have serious financial consequences as Levi’s Stadium gets older and major repairs become more expensive.
She also warned that Santa Clara residents should not expect the stadium to continue producing the same excess revenues for the City’s General Fund.
“What we know right now is our general fund will not make money off the stadium anymore except for our rent,” Cox said.
“For the next 10 years, we will not make any money,” she said, referring to revenue beyond performance rent.
Finance Director Kenn Lee acknowledged that the stadium’s long-term capital needs are a problem.
When discussing the amount currently dedicated to capital improvements, Lee said, “When you look at the size and the value of our asset, that’s insufficient.”
He said the Stadium Authority is conducting a facility condition assessment to determine Levi’s Stadium’s future capital needs.
Mayor Lisa Gillmor then shifted the discussion to another unresolved financial question.
Gillmor asked exactly how much the Stadium Authority has been charged for Super Bowl LX and FIFA World Cup preparations.
Lee couldn’t provide the number.
“I don’t have the exact number,” he said, adding that staff would have to provide updated information later.
When Lee later explained that staff time and other general administrative expenses connected with FIFA continue to be charged to the Stadium Authority, Gillmor immediately followed up.
“So you’re continuing to charge the Stadium Authority for Super Bowl and World Cup costs,” she asked. “That’s why I want to know the total to date, what you’re charging the Stadium Authority, which is the public.”
Santa Clara’s official policy for the World Cup was to obtain reimbursement for event costs and avoid impacts to the General Fund.
The City also negotiated agreements requiring the Bay Area Host Committee to reimburse qualified Super Bowl and FIFA expenses.
Today, the Stadium Authority Board still does not have a complete public accounting of exactly what the two events have cost the Authority or how much of those costs will ultimately be reimbursed.
This could have all been prevented. The Council was advised of the 49ers lack of knowledge with managing contracts and public works projects—and let it go. Don’t forget that the former City Manager publicly warned the Council that the FIFA contracts had conflicts of interest and that the 49ers had obligated the City’s public funds and resources without any approval or transparency. Instead of seeking answers, the Council let it go. It’s the Council’s fault that the Stadium Authority is in this situation, and it will get worse if Gary Ferraris is elected Mayor. Gary will be worse than Becker!
To be clear, it was the council majority (ie suds jain, Kevin park, Karen Hardy, rah chahal and Anthony Becker ) who approved those contracts in repayment to Jed York’s millions for getting them elected. And yes, Gary Ferraris is much worse than Becker. I spent time with him at the Art and wine festival yesterday. Oy vey!!
“And the Beat Goes On, and the Beat Goes On”
Sonny Bono wrote this song in the mid 60’s, yet it is so relevant when dealing with the NFL.
Every NFL host City (Except Green Bay) is just used and abused, and the only thing they want to hear at any time is just one simple statement.
“Thank you Sir, may I have another”.
Who thought it was a good idea to put “The Inmates in charge of running the Asylum?”
How did we ever think this was going to be a good outcome?
What is needed right away is an independent 3rd Party Auditors, and Open Books moving forward. By the way, it’s our money!!
Not asking for anything here that does not make total sense.
Basic simply Financial Oversight
1. Fiscal Responsibility
2. Fiscal Accountability
Both are needed and critical to having this be anywhere close to a win for our City. If not… we will just go down in the books as another revenue stream for the NFL.
If not, “And the Beat Goes On, and The Beat Goes On”.
TIME FOR A CHANGE, AND SOONER IS WAY BETTER THAN LATER.
How that happens is we get control of our City Council once again.
If anything comes in your mail box, email, radio or TV, wait until the end and see who is paying for it….
If the 49ers are paying for it, it just makes good business sense to them.
Do the math, spend $0.1 (Penny) to make a $1.00 (Dollar). Spend a $1.00 to make $100 dollars.
We don’t need to ask Jed York how he feels about saving a little money. Hey, $20 is $20…
We can change all of this, all it will take is for us to finally all understand who is for us, and who is against us.
Just The Facts Ma’am
“And the Beat Goes On, and the Beat Goes On”….
When I suggested a tax on all seats sold at every event as a way to make extra income from the stadium, the council and city manager blocked me. These short sighted mfer’s have not accomplished much. I’d bring it back up, but I know that would be a waste of my time.
There should be an official outside audit of all the financials associated with the stadium, say, for the last 10 years.
This is like a horror story that never gets better, only worse. I remember long ago when we tried to get control of the stadium, that’s when the niners pushed to have districts vs city wide. I was told at the time it was so the niners could more easily buy the council. Yep, Lisa was right.
This is why the council majority in 2019 voted to remove the management agreement from the 49ers and in February 2020 voted unanimously to terminate the management agreement. Yet, we were accused of political retaliation and lawsuits were filed only to be settled by another council majority. And the management agreement stayed with the 49ers.
Now here we are. No money for the general fund except for rent. This is why transparency and accountability has been called for again and again. Yet, it was required that non-disclosure agreements be signed which I did not do. Now we see the results of no transparency and not being able to stand up for what is best for Santa Clara. Our City needs infrastructure improvements yet monies that could be used to build a Downtown or address the blight on El Camino Real are being wasted at the stadium due to poor management.
The Stadium Authority’s apparent financial crisis can be traced directly back to the council majority’s decision in 2022 to hand management to the 49ers without ever getting an accounting of their first eight years of mismanagement and prevention of further self dealing. Just days after their approval of a rushed 2022 settlement for peanuts, 49ers owner Jed York started pouring millions into the elections of Hardy, Chahal and Becker. Hardy and Chahal who originally voted to terminate the 49ers’ management agreement have never explained why they reversed their decision, as they benefitted from York’s spending. Folks have been asking what the 49ers want with their latest round of election interference in the form of contributions to expenditure committees for Ferraris and Williams. Seems clear that they want to suck more potential revenue that should rightfully go the hardworking taxpayers of Santa Clara.