Bay Area sports teams have had a notable recent history of stadium issues, and we can add the San Francisco Giants into the mix! The team is attempting to get a break on property taxes for AT&T Park, claiming the stadium has depreciated in value. They believe the value has dropped to $158 million, and they should receive a refund of $8 million covering property tax payments from 2011 to 2014. The two sides addressed an appeals board this past Tuesday.
I bring this up on a 49ers site because of the contentious relationship that has developed between the Giants and the city of San Francisco on this topic. The San Francisco 49ers have had a contentious relationship of their own with Santa Clara city hall for some time now. Recently the 49ers filed for arbitration in their dispute with the city over Levi's Stadium rent. The team pays rent on the stadium, and the lease allows for a one-time decrease in the annual rent due. The stadium debt servicing is ahead of schedule, and the expenses are less than expected. The 49ers and city hall have had auditors sorting through the numbers. The 49ers presented a number, and some members of city hall questioned the supporting data. The lease includes an arbitration clause, and so it will be heard before an independent arbitrator.
The Giants issues are primarily with San Francisco Assessor-Recorder Carmen Chu. In 2014, she retroactively raised the team's property taxes for 2011, by what the team claims was 97 percent, and carried those raises forward. The Giants believed the increases are excessive, and are having the numbers assessed by "by a neutral panel of experts as provided by law."
Chu set the value of the stadium at $407 million, and the Giants have set the value of the stadium at $158 million. San Francisco real estate prices have exploded over the last 15 years since the Giants built their stadium. However, way back when, Giants senior VP and general counsel Jack Bair said the stadium was more like a car than a home, depreciating in value, rather than potentially appreciating. The Giants also argued they hold a 66-year lease, where a home-owner holds the home in perpetuity (assuming they pay their mortgage). They were attempting to get back property tax money from 2001 to 2003, and a judge awarded the team $3.6 million in property taxes.
The Giants have gotten a lot of praise over the years for their stadium process. They are lauded as one of the few "privately financed" stadiums in American sports. While they are paying the mortgage on their own, to say they received no public help is a bit of a misnomer. One number that is fairly well known is that they received $15 million to relocate a public transit facility. However, beyond that, they got the land (value estimated at $33 million) for free, they received a full property tax exemption early on that has been valued at around $83 million, and they have received a variety of fire, police, and garbage services, valued at $33 million.
Given the difficulty of building stadiums in California, they do deserve a certain measure of credit for what they accomplished. But we don't need to get too crazy with the praise. I have no problem with them pushing for property tax refunds based on a neutral valuation, just like I have no problem with the 49ers trying to decrease their rent. The 49ers lease allows for a potentially significant decrease in rent, just like the Giants have the legal right to challenge a property tax assessment. But given the 49ers recent issues at Levi's Stadium, I have a hunch we'll continue hearing more about that than we do the Giants squabble with the city of San Francisco.