Two months after a ground-breaking that featured plenty of warm and fuzzy speeches about the future of the 49ers in Santa Clara, we have the first hint of trouble in the relationship. On Friday, a Santa Clara county board designated with overseeing property taxes from redevelopment zones voted 4-3 to pull back $30 million in funding previously promised to the 49ers stadium project.
As I understand it, the 49ers were covering the $30 million and then they would subsequently be reimbursed by the redevelopments funds. Redevelopment funds have been a source of contention throughout California after the state scrapped the agencies in one of many attempts to clean up the state's budget mess.
According to the San Jose Mercury news report, county tax collector George Putris proposed the motion and got a quick vote approving it. Putris stated that the need for these funds was greater at other public agencies, such as school districts.
There are numerous problems with this situation that all go beyond the argument of whether money should be going to schools or stadiums. I won't begin to argue the 49ers "deserve" this money more than schools. Rather, the problem goes towards the actual intended use of this money, the contractual legal obligations and most importantly, the longterm relationship that exists between Santa Clara county and the San Francisco 49ers.
The contractual legal obligations are important because of the likelihood of lawsuits. One potential issue is the vote that approved funding and included these redevelopment funds. The state made changes to redevelopment agencies as part of its budgetary process, so there are questions as to how that applies in this particular instance.
Building on that are the various contractual legal issues that may arise in this situation. This is something I need to look into further because there are a lot of nuanced details. The 49ers apparently were expecting repayment on $30 million they essentially were "lending" to the county once the redevelopment agencies were scrapped by the state. I would hope there is some kind of contract covering this $30 million, but even if not, there could be arguments of reliance by the 49ers in moving forward.
Trust Politicians? Yea, right!
In proposing this motion, the board argued that there were more important things the money should be spent on. While I won't argue that a stadium is more important than education, I am just a little bit skeptical about the board's statements. According to the Mercury News, the vote would allow the county to instead use the money for on other public agencies, which include the school districts.
The problem I see though is that this money is not automatically being earmarked for schools, but rather "other public agencies." If we look at this beyond any agreements on the money, I can't imagine I'm the only person who doesn't automatically believe that the county of Santa Clara will quickly spend this money on these needy schools. Maybe they will, but given what we've seen from politicians, I'm not exactly holding my breath for them to properly appropriate these funds. This is a smaller aspect of all this in light of any promises, but it still jumps out at me.
The $30 million is no more than 2% or 3% of the total bill. In proposing the motion, Putris reportedly said, "Let's be real: That stadium is going to get built whether or not you get this $30 million." While that is likely very true, that also strikes me as an incredibly troubling statement.
While this is a troubling development, the 49ers stadium should still get built. There will likely be legal battles, but the 49ers can continue building amidst the court battles. We're not talking about several hundred million dollars with this. The real problem is what this says about the potential relationship of these two parties.
The 49ers are looking at turning Santa Clara into their long-term home. Due to the public/private arrangement of this deal, the 49ers will be interacting with the city and county of Santa Clara for a long time to come. Do we really want to see this relationship developing under the cloud of a lawsuit? Yes, it is only one lawsuit, and it only involves one part of a bigger relationship, but this is not an inspiring start.
I don't expect this to devolve into Al Davis vs. Oakland, but there is no doubt that this is a bad start to this relationship. As County Assessor Larry Stone said, ""Ladies and gentleman, retain your attorneys: The litigation is (about) to begin." The 49ers are hoping to open their stadium in time for the 2014 season so they can host Super Bowl L. I still have faith the stadium will open on time, but we could be in for a rough ride. Buckle up.