07/06/2012 by Matthew Grant Anson

Santa Clara County pulls out of 49ers stadium funding game

Santa Clara Stadium
The new 49ers stadium in Santa Clara will cost $1.2 billion and open in 2014.

It’s the stuff city officials’ nightmares are made of: the moment that their beloved professional sports team comes shilling for millions of dollars in funds for a new stadium or arena. While cities and counties usually bend to the pressure, one Northern California county has had enough.

In a surprise move last week, Santa Clara County pulled $30 million in funds from the 49ers new stadium, stating their intention to spend that money on school districts instead. And while the city has received immediate flack from shocked Santa Clara city leaders and 49er officials, according to Whittier College professor and urban politics expert Dr. Eric Lindgren, the County made the right decision.

“This is pretty common that these pro sports teams seek public money to build their stadiums, but it’s almost never a good deal despite what they say,” Lindgren said. “No city has made money off of publicly subsidizing these things. It’s almost universally a bad deal.”

Santa Clara was supposed to pony-up $40 million to the 49ers after voters approved a measure in 2010 to help build the stadium via redevelopment funds. However, the redevelopment fund has only covered $10 million sent to the 49ers so far, and after the state scrapped redevelopment agencies altogether, the County’s oversight board voted 4-3 to keep the remaining $30 million for local government and schools.

The courtroom, not the gridiron, is where this battle is headed next.

“Let’s be real: That stadium is going to get built whether or not you get this $30 million,” county tax collector George Putris, the oversight board member who proposed the motion, told a 49ers attorney during the meeting.

Putris may be right. 49er officials have said that the team will absorb the $30 million loss in funds, as it amounts to less than 3 percent of the new stadium’s $1.2 billion estimated cost.

So why do cities like San Francisco usually bend to the will of owners worth millions if not billions of dollars?

“The issue is that owners use what is essentially blackmail, where if you don’t give me a new stadium, even if it’s a bad deal for you, I can take away these jobs and revenues by moving the team. It’s worth it for a city to have a pro team, but not if they have to give up a bunch of money up front [for a stadium],” said Lindgren.

“Look at the Yankees. This is one of the wealthiest teams in the country, in all of sports. They forced the city of New York to build a stadium for them.”

City officials are between a rock and hard place when it comes to financing stadiums. “I really think cities are the weakest players,” Lindgren said. “They can’t force teams to stay. They get pushed around by big money and by the allure of better economic times. That’s one of the things owners play on: they know politicians are going to get hammered [by voters] if they lose the team.”

But San Francisco may be a rare city with some advantage on its side, which could be why Santa Clara County had the guts to keep their tax dollars in the face of big money.

“I think a city like San Francisco or a county like Santa Clara has something most places don’t,” Lindgren said. “San Francisco can’t move. They’re not going to move – they’re in a premier city. They’re not going to move to Arkansas.”

In the eyes of the voters, losing a storied franchise to another city creates generational grudges that only sports fans can hold.

Lindgren explains that even though Oklahoma City is losing money after their promise to build a new arena when Seattle wouldn't for the Supersonics, the franchise (now the Thunder) immediately began reaping the benefits in other ways. Although Kevin Durant was drafted by the Sonics, he has made the Thunder an NBA-finals caliber team in just three short years. Even though Seattle made the right economic decision by not allowing itself to get strong-armed into building a new arena, the citizens of the city were still left to watch their former team make it all the way to the Finals while still having no team of their own to root for.

So the question remains: can Santa Clara buck the trend, tell a multi-Superbowl winning franchise that it's going to spend its money on badly needed civic services instead, and still come out a winner?

If so, sports team owners might be in for a few nightmares themselves.

Categories: Economy

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