Santa Clara Gives 49ers a Month to Turn Over Stadium Books

SANTA CLARA, Calif. (CN) – The city of Santa Clara escalated its battle with the San Francisco 49ers, giving the National Football League team 30 days to either provide key financial documents relating to the operation of Levi’s Stadium or stand in breach of contract.

The Santa Clara City Council voted unanimously Tuesday to issue the 30-day compliance letter demanding the team turn over several documents related to revenues and expenditures relating to non-NFL events at the stadium, where the 49ers play their home games and which is owned by the city.

“What we are asking for is nothing more than what is required by the management agreement,” said Santa Clara Mayor Lisa Gilmore, who has led the crusade against the 49ers in recent weeks.

The city owns Levi’s Stadium, taking out a bond that eventually totaled $850 million to help construct the $1.3 billion facility. They have enlisted a private company called Stadco to run the day-to-day operations.

In 2010, voters approved Measure J, which greenlighted borrowing for the stadium construction. Embedded in the language of Measure J, and meant to reassure a public wary of the NFL’s tendency to fleece municipalities in stadium-construction agreements, were stipulations that set forth prohibitions on the use of taxpayer money for stadium operations or maintenance.

Gilmore recently said those stipulations were flouted, and accused the 49ers of using taxpayer money to re-sod the stadium field after non-NFL events in violation of Measure J. She then promptly called for an audit to determine if and when city money is being used by the stadium managers in violation of the agreement.

To date, the current dispute between the city and team involves the timely delivery of financial documents the city claims are vital to its ability to understand how best to manage the public asset.

“Looking at the agreement, there is nothing prohibiting the Stadium Authority from looking at those documents,” Gilmore said.

The 49ers, represented by attorney Harry O’Brien and team president Al Guido, said that they have turned over all the requisite documents – withholding only ones that contain proprietary information related to either security or privileged business information.

“It is in no one’s best interest, not in ours, or the city’s or the acts that come here, for that information to become public,” Guido said during the proceedings. “You want event line items, but if promoters get that information they will be able to squeeze margins.”

The City Council remained unpersuaded.

“If you want to operate as a closed proprietary entity, we might entertain an offer for the purchase of the stadium,” said Vice Mayor Teresa O’Neill. “But you were hired by a public entity and it puts upon you a certain obligation.”

In contrast to last week’s council meeting, where a number of 49ers employees showed up at City Hall to berate Gilmore and the other council members, the majority of those in the audience on Tuesday were in favor of the council issuing the 30-day warning.

“Last week you were too busy insulting our mayor to listen to the demands of this city,” one speaker said early on in public comment.

Indeed, several of the speakers took issue with the tone of last week’s public comment, accusing the 49ers of busing in their employees as a diversionary tactic meant to distract attention from the matter at hand.

Those employees were not in attendance Tuesday, and were replaced by outraged community members.

“The votes gave you a mandate on Nov. 8,” said one speaker, referring to the fact that all of the council members in favor of aggressively holding the team accountable were overwhelmingly re-elected, despite opposition from well-heeled opponents whose campaigns were rumored to be financed by the team.

It also does not help that the 49ers, under the direction of CEO Jed York, have failed miserably on the field since moving to Levi’s Stadium in 2014.

In moving to the new digs, the team raised ticket prices significantly while also parting ways with their successful head coach Jim Harbaugh. The team has had two losing seasons since – and is currently vying with the Cleveland Browns for the dubious distinction of being the worst team in the league.

“York got rid of Harbaugh and took one of the best teams and made it now one of the worst,” said one enraged citizen. “He (York) has made our team and our city a laughingstock.”

Gilmore had previously alluded to taking over management of the stadium altogether should the 49ers persist in withholding documents, but the city attorney informed her that such an arrangement would have to be agreed to by all involved parties.

For now, the team and city are at a stalemate and may be headed for some mediation unless cooler heads prevail in the coming month.

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