Niners Stadium Deal Debate
The San Francisco 49ers’ plan to build a new stadium in Santa Clara, Calif., is moving forward despite some experts’ concerns the deal could be too risky for the city.
The 68,500-capacity football stadium is priced at an estimated $1 billion including an $850 million loan. At issue is that debt load and whether it’s justifiable to spend that much of public funds that could be used elsewhere, according to the Wall Street Journal.
Roger Noll, emeritus professor of economics at Stanford University, told the Journal “There has never been a [professional] football stadium with a positive economic impact.” Noll added the deal could, at best, break even or turn out to be a disaster.
University of Michigan sports management professor Mark Rosentraub said there’s no way to tell how much of the stadium’s economic impact, such as gas or food sales, will benefit Santa Clara itself.
Santa Clara Assistant City Manager Carol McCarthy and Larry McNeil, 49ers CFO, disagree, saying the partnership will benefit both cities and that contingencies are in place to keep the stadium from becoming a financial burden.
Under the deal, Santa Clara officials will create a Stadium Authority that will own the stadium – with the 49ers as prime tenant – and assume the $850 million debt. The city will also provide 14 acres of land. The National Football League would pitch in about $150 million and the 49ers would pay approximately $30 million to rent the multipurpose facility for 40 years along with other expenses.
Additional revenue will come from the sale of stadium seat licenses, luxury suites and naming rights. There’s also talk of bringing in a second team to share tenancy.
Meanwhile, an opposition group called Santa Clara Plays Fair continues its campaign to stop the 49ers deal by trying to get the project put back on the ballot. Area voters approved funding for the project in 2010.
“It’s fiscally irresponsible to own a stadium and not a core city service,” spokeswoman Deborah Bress told the Journal. “If this is such a great deal, why don’t they have private investors lined up to do it?”