Santa Clara County officials shocked the city of Santa Clara and the San Francisco 49ers by announcing they would be pulling nearly $30 million out of the team's new football stadium, a move that's likely to trigger numerous lawsuits.
The 49er's relocation to Santa Clara, Calif., has gone swimmingly thus far, with no major hiccups along the way. The stadium is being paid for by a combination of funds from the team itself, the city of Santa Clara and Santa Clara County, with the county chipping in the least.
In 2010, Santa Clara County voters approved $40 million in redevelopment money to be put toward the new stadium. The redevelopment committee paid about $10 million to the 49ers before the county opted to scrap the redevelopment committee itself. In order to proceed, the 49ers loaned the county $30 million, expecting to be paid back over time from the county's property tax revenues.
Yet the new board that oversees property tax for the county passed a motion that says the $30 million will be used elsewhere. According to the San Jose Mercury News, the board said the money should go to the county's school system rather than "little televisions in the back of stadium seats."
"Let's be real: That stadium is going to get built whether or not you get this $30 million," county tax collector George Putris, who introduced the motion, told a 49ers attorney at the meeting.
That sentiment may have a ring of truth to it. The $30 million accounts for less than 3 percent of the total costs for the new stadium. In addition, since the 49ers loaned the money to the county in the first place, they are not relying on being reimbursed. Thus, construction of the stadium is not expected to be delayed or affected.
However, the team will likely be fighting for the money in court. The 49ers and the city of Santa Clara pointed out that the voters determined that money should go toward the stadium, and it's not the county's money to take back.
Lizanne Reynolds, counsel for the county, said that the board had the power to pull the funds if it was found to be "not in the best interest" of other county agencies that could use the money - in this case, the schools. Putris then reportedly pulled out the motion to keep the funds, which he had written before the meeting. The motion passed 4-3, against the wishes of Santa Clara mayor Jamie Matthews, who was one of the three dissenters.
"Just because you can find a legal argument doesn't make things right," Santa Clara Mayor Jamie Matthews told the news source. "Some things are right and wrong, and we have an obligation to the 49ers. It was voted on by the citizens."
There may also have been a problem with the way the business was conducted. City Attorney Ren Nosky pointed out that the motion to pull the stadium funding was not on the agenda, and thus may have violated open meeting laws. Nosky said thousands of stadium supporters would likely have shown up to protest the move if the idea had been talked about beforehand.
Harry O'Brien, an attorney for the 49ers, disagreed with Reynolds' view that the town had the power to pull the money from the stadium.
"You absolutely do not have the legal authority to walk away from these legally binding obligations," he reportedly said at the meeting, according to the news outlet.
Although legal battles are likely looming for Santa Clara and the 49ers, construction is expected to move ahead as planned. Contractors hoping to be chosen for major projects such as a football stadium should consider the online auction site IronPlanet, which offers a wide array of cranes, excavators and other construction equipment. What's more, IronPlanet's IronClad Assurance allows prospective buyers to view full inspection reports before they submit a bid.
