The Merc’s Mike Swift has a good overview of the 27-page term sheet released by the City of Santa Clara earlier tonight (more here). New cost is $937 million, which includes the PG&E substation relocation and the parking garage across Tasman from the stadium. I gave the term sheet a quick look. Here are the raw notes I made on the document(s):
1. City contributions: RDA is pledged to give $42 million, including a $12 million loan from the team. Reimbursement can occur through additional pledged source revenues (hotel taxes). Hotel taxes – $35 million. $20 million from Silicon Valley Power. $17 million for new garage.
2. Facility rent is $5 million/year. Ground rent is $180k first year, add’l $35k per year after that up to $1 million/year. Revenue goes to SA.
3. All parking and concession revenues are to be controlled by the SA.
4. Team revenue is defined as::
- Ticket revenue (excluding ticket fee/tax)
- Premium seat revenue
- Team service revenue (equipment/technology rental)
- Ad/sponsorship revenue
5. Second team provisions
a. $28 million of RDA money is refunded
b. Add’l $1 million ground rent, goes up $100k every 5 years starting in year 11
c. 49ers responsible for all costs to bring a second team in – except in temporary (2 year max) situations
A. City claims that it is not responsible for financial condition of the SA.
B. Yet SA’s board will include City Council members
C. SA revenue sources
- Stadium Builders Licenses. There are references to “an entity experienced in the marketing and sales of SBLs.” Oakland Football Marketing Association, anyone?
- Naming Rights – A portion of construction bonds may be secured solely from Naming Rights sort. They will obviously have some kind of annual revenue target. If, through investigation, potential deals fall short of the target? What will they do: wait for the targeted number (Cowboys), or approve a lower revenue deal?
- Ticket fee/tax
- Upfront Vendor Payments – concessions and pouring rights
Construction of SA-designated part of project can only continue as long as SA is properly funded. That makes the dilemma in #2 above something of a showstopper. It’s hard to get a loan secured by naming rights done if there’s no naming rights sponsor. Which makes me wonder: Do they already have the naming rights sponsor in hand? When the idea first came up in 2005, I was led to believe that the likely candidate was Yahoo, which is no longer in the kind of fiscal shape to make such a deal. Then again, maybe it’s Intel, who’s no stranger to major advertising and sponsorship pushes.
Again, there is no mention of what occurs in case of an SA revenue shortfall.
The inclusion of the “Second Team” terms is interesting, but there isn’t any significant accompanying information to appraise it. Councilman Dominic Caserta asserts that bringing the Raiders (the document goes out of its way not to mention the team by name) in will make the project a slam dunk. It’s a bit premature to say that, though there’s no doubt that having the Raiders on board will definitely help pay the bills.
I’ll save the extensive review for after the City Council meeting.