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$6.5 billion mega-project approved near Levi’s Stadium

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Levi’s Stadium can bring some money into the local economy, but this kind of development project is where the real money is at.

Santa Clara is getting some serious investment in the coming years. The city council voted to unanimously approve a $6.5 billion private development project for the area next to Levi’s Stadium. The mixed-use project will go on a 240 acre site that currently includes a golf course and dirt-bike track. Construction is expected to begin in late 2017, and rolled out in phases.

A real estate firm involving Joe Montana was originally the lead on a development plan. They are no longer leading it, but will still be involved, and it sounds like there will potentially be a Montana led sports-themed restaurant included in the first phase. That phase “includes a minimum of 600,000 square feet of office, a 300-room hotel and relatively modest 50,000 square feet of retail on a parking lot across from the stadium.” That will be followed by a “City Center” phase, which would add a minimum of 500,000 square feet of retail, plus offices and potentially apartments.

The golf course being used for this is used for game-day parking for the 49ers. Santa Clara mayor Lisa Gilmor said a deal had been worked out with the developer, the city, and the 49ers to help provide more parking for stadium events. They did not include any details, but more parking is a big deal for this kind of project. One of the 49ers problems the first two seasons at Levi’s Stadium was people getting to the stadium. Ingress and egress was not ideal, and parking was spread all over the place.

I am somewhat amused by some of the backlash on the project. A disposition and development agreement was apparently only made available “several days ago” and the public had not had sufficient time to look at it. There are no more specifics on that, but Gilmor and others on the Santa Clara city council have complained about transparency issues with the 49ers on Levi’s Stadium issues. I’m curious what their thoughts are on transparency with this development project now that it is a whole lot more money in their pockets?

The 49ers and the city council have had their issues the last couple years, but I don’t think we see this development yet if not for Levi’s Stadium. Silicon Valley is booming, so it is possible this would have been worked out eventually, but I have to think the 49ers stadium helped spur it further along.

One of the many arguments professional sports owners and cities make for financing new stadiums is the impact it will have on the local economy. They say the new stadium will bring jobs, economic impact and prestige. Those things do happen to some extent, but the numbers are almost always exaggerated, particularly when it comes to the direct impact. However, there is something to be said for getting this deal done. Some people will just be moving their spending from one area to another, but there will likely be plenty of people spending money at this site that might otherwise just stay home, or spend significantly less. The 49ers stadium itself does not create a significant direct impact to the local economy. Getting this development built out should have a significant impact on the local economy. We’re a long way from any sort of completion (or even starting), so we’ll see how this is looking five or ten or more years from now.