City of Santa Clara debates loan to 49ers for stadium
- December 7, 2011
By LIsa Amin Gulezian
SANTA CLARA, Calif. (KGO) -- It's the biggest loan to a public agency for any stadium in NFL history and it was debated in Santa Clara Tuesday night. Three financing groups are willing to loan the 49ers and the city's stadium authority $850 million. The public got a chance to weigh in on this.
There will be another public comment period on Thursday. Tuesday night residents heard details about the specific funding and had a chance to sound off about the details."Yes, it is exciting, could be considered a huge gamble, but it is worth it," said Peggy Parkin, a resident.
"This is quite an egregious bait and switch we're witnessing here," said Craig Larsen, a resident.
The jury is still out on the stadium deal in Santa Clara. Tax payers heard details about the latest finance plan from Goldman Sachs, U.S. Bank, and Bank of America. The three have agreed to loan the city's stadium authority and the 49ers, $850 million.
"We're creating a finance structure that we'll go over tonight to show that we're basically lending it to a financing vehicle and lending the money down into both pieces," said Gregory Carey from Goldman Sachs.
"Everyone is on the hook and everybody has some skin in the game and when push comes to shove the citizens of Santa Clara are protected because all cost over runs for operations, maintenance are all paid for by the 49ers," said Mayor Jaime Matthews.
In other words, if the stadium authority can't pay the money back, the 49ers will.
"With the loan there is absolutely no obligation on the tax payers. You can consider the general fund deadbolt locked," said Paraag Marathe, the 49ers chief operating officer.
"When push comes to shove, I really doubt the 49ers will honor the promise. I sincerely doubt that," said Bill Bailey from Santa Clara Plays Fair.
Here is how the new funding breaks down: the total cost for the stadium is now just over $1 billion, up from the original $987 million quote. $850 million will come from this new loan. The 49ers will pay $150 million. A hotel tax will fund $35 million of it. And a maximum of $40 million in redevelopment money can be used.
Sports economist Paul Staudohar, from Cal State East Bay, is skeptical. He says, "Why should tax payers fund Taj Mahal stadiums for fabulously wealthy owners? Shouldn't it be the owners themselves that are doing this?"
Stadium supporters thought they'd overcome a major hurdle when Cedar Fair, which owns Great America, decided to drop its lawsuit against the city of Santa Clara over parking issues that may arise if the stadium is built, but the issue of financing will continue until Tuesday. That's when the council will vote on it.