The San Francisco 49ers and the city of Santa Clara are having a bit of a feud regarding payment of rent. I don't even know that "feud" is the right word, but something is happening. And it is possible this is more a feud between the 49ers and only a segment of the city leaders.
According to a San Jose Mercury News report, Santa Clara "city leaders" contend the team has withheld more than $5 million in rent since December. They claim it is part of an effort to lower the rent being paid to the city. Naturally this has led to a little bit of outrage the last couple days.
Santa Clara mayor Lisa Gillmore is quoted in the article on Friday saying "I'm going to ask the city is made whole for their contractual obligations. It needs to be paid." She also spoke about the 49ers attempts to lower their rent.
Gillmor says she'll push to ensure any changes to the Niners' rent or contract are discussed in open session because it's "public money."
"It was mentioned they had apparently reset their own rent without our approval," she said. "But I want every penny accounted for and delivered as per the contract."
I'm doing some more research into the subject, but I wanted to get an initial post up with some background info and a few thoughts. I am going to spend the coming week trying to get ahold of folks with the city of Santa Clara to get more of their thoughts on it.
The article talks about the 49ers making two payments this past month totaling $5.5 million, which put them paid up on the lease. As to the rent adjustment, here is the pertinent portion of the Levi's Stadium lease that discusses the potential for a one-time adjustment to the rent.
The contract provided for a one-time reset of the rent based on how debt service or expenses have increased or decreased. According to the article, stadium expenses were not as high as expected, and people were paying off their Stadium Builders' Licenses earlier than expected.
The article then points to the 49ers wanting to pay $20.25 million, and the city wants $24.5 million again "just to pass a fiscal budget and continue negotiations", because they are not sure if that's enough to cover what needs to be covered. It is my understanding that negotiations had moved toward that $20.25 million and that is where the 49ers assumption had come from with that number.
I'm going to try and get some questions answered by the city because part of this strikes me as a bit political. Gillmor recently took over as mayor when Jamie Matthews stepped down after the Super Bowl. Matthews was viewed by many as particularly friendly to the 49ers, while Gillmor is viewed as not a fan of the 49ers. Gillmor and two other members of the city council have had a contentious relationship with the organization. You can read more about it here.
If the 49ers had paid up prior to Gillmor's statement on Friday, I'm left a little confused about Gillmor's statement about contractual obligations. She has pushed for more transparency in the 49ers relationship with the city, but it seems like there have been public meetings with regard to this adjustment. On March 8, the city's Director of Finance, Gary Amelingm and the Economic Development Officer, Ruth Shikada, provided an update on the rent adjustment issue. You can read an executive summary here, the power point presentation here, and video of the meeting here. I highly recommend giving the two documents a read, as neither is particularly long.
The report specifically states it is not making a recommendation. Rather the staff will bring an item for action at the Tuesday, March 22 Stadium Authority meeting. I'll try and find a live stream for that on Tuesday, but if I can't, I'll work on a recap of it later in the week. Once I have seen what's up with that meeting, I'll work on contacting the city to see where the issue stands. I would think Gillmor and others will be on hand at the meeting to voice any of their concerns. That might answer most questions, but if not, I'll follow up with city hall to see what is next in this whole rigmarole.