49ers Stadium Update: Santa Clara City Council Approves Construction Preparation Funding

As the 49ers continue this rather magical run in 2011, there is still the often discussed new stadium issue to be resolved. The team has been working with the city of Santa Clara to get a stadium built and is hoping to get shovels in the ground by late 2012 and open up the stadium for the 2014 season.

Last night the Santa Clara City Council approved $10 million to begin preparing the site for the eventual construction. The preparations cover things like rerouting utilities and adding access road, sidewalks and parking spaces. It is preliminary work that apparently needs to be done before shovels can hit the dirt.

The preliminary work is great and all, but there is still the matter of paying for the remaining $900+ million that will be required to get the stadium done. Santa Clara is providing approximately $114 million in public funds that will come via $40 million in redevelopment dollars and the rest from utility revenue, bonds and an increased hotel tax.

The 49ers will be on the hook for the remaining $800+ million in construction costs, along with potential overruns. They will pay for that with among other things: naming rights, personal seat licenses, suite sales, ticket sales, and some G-3 style funding from the NFL. There is also the factor of potentially bunking with the Oakland Raiders in a new stadium. It would ease the financial burden. I remain a supporter of sharing the stadium but I'm not holding my breath for that any time soon.

The biggest issues will be working out a financially viable naming rights deal and convincing folks to purchase the PSLs. The 49ers recent success should actually help raise the level of enthusiasm at a perfect time. It is my understanding that people will be able to look into season tickets in the new stadium in January. If the team continues its strong run into January, I'd imagine we might see a modest rush early on.

The naming rights negotiations will be an interesting aspect of this process. The potential stadium in Los Angeles already sold a huge naming rights deal with Farmers Insurance, but the location of the stadium near the Staples Center is an ideal location with the potential for numerous high profile events. For a 49ers stadium in Santa Clara, California, the opportunities are not quite the same. There is the chance for some decent money from Silicon Valley. Just make sure to pick a company that won't go out of business in six months like we saw with a lot of late '90s, early '00s naming rights deals. And let's avoid Enron Field entirely (yes, Houston, we still remember).

The 49ers and Santa Clara are making progress towards a new stadium, but plenty of obstacles remain. For now it is mostly baby steps in the right direction, but starting in January things get real. The team has reportedly sold approximately $173 million in luxury suites over the last year, so that's a nice chunk of change. Suite money is important, but once again, it comes down to naming rights and personal seat licenses. The 49ers success this season won't completely dictate the market for either, but it would provide a strong shove forward. For PSLs, excitement will lead some folks to invest early. For naming rights, returning the 49ers to prominence in the NFL is valuable for maximizing the naming rights deal.

For updates on stadium news, we've got a running 49ers Stadium story stream at SB Nation Bay Area.

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