Judge strikes down second 49ers stadium referendum

Last week, Santa Clara City Council Member Jamie McLeod hinted at a verdict in the case of City vs. referendum seekers, and it’s here: NO on the referendum. Appeals notwithstanding, there are no obstacles left for the 49ers and City to start building the $1.02 billion stadium on the Great America auxiliary lot.

Taken a week ago: Earth being moved for new sewer lines and utilities to sit under stadium. Note that safety lighting has not yet been removed.

Judge Peter Kirwan clearly sided with the City in his ruling:

In arguing their position, the city and 49ers cited past cases, saying voters only have one shot at deciding “legislative” policy issues, such as stadium construction. Any subsequent issues — like the loan — are only “administrative” acts needed to carry out the wishes of voters who approved the project in June 2010, they maintain.

If there’s a dangerous precedent, it’s that any municipality who chooses to build a stadium in the Bay Area can choose to be purposefully vague or obfuscating when writing up stadium deal terms, get a referendum passed, then fill in the blanks later. Time will tell if others use this as a template. It also remains to be seen if this actually ends up a good deal for Santa Clara years into the lease. Regardless, congratulations are in order to Santa Clara and the San Francisco 49ers, whose diligence (and a lot of help from the NFL) helped make this happen. I look forward to the open house, and will post the occasional picture as construction progresses.

27 thoughts on “Judge strikes down second 49ers stadium referendum

  1. ML, the vague argument was and is not valid. A specific deal was tied to a specific referendum. The opposition had the opportunity to point out the referendum did not point out X and Y and Z, or it was in general too vague, or was simply not a good deal. Voters were then free to decide if the details or the lack of details were worrisome enough to vote against the referendum. Further, as the opposition would and should be eager to do, if there is an incorrect detail or a misleading detail on the referendum as it applies to the deal, they would not have a difficult time finding a judge to issue a TRO.

    If ignorance by the voters to specifics of a referendum were reason enough to re-vote on it, we might as well bring all referendums up for a re-vote. Voter ignorance is part of the process for better or worse.

    This judge did a very good thing. The precedent set by allowing another vote because the referendum wasn’t educational or specific enough would have been chilling. It essentially would have said “hey, if your side loses, just re-vote on it till your side wins”. Again, the opposition put there view out there and lost. The people of Santa Clara spoke (I grew up inSanta Clara and know many people there – there was not a lack of interest or opinion on the matter). The majority want the stadium. The opposition’s court folly was nothing more than the contemporary political art of winning by any means possible. If the A’s get the Ok to go to San Jose, oh brother! You ain’t seen nothing yet in terms of court folly et al!

  2. @TW – When the original term sheet was floated in 2009, the Stadium Authority was only going to be responsible for $444 million ($114 City + $330 SA). A few months ago it became $850 million. That’s not a rounding error. To call it merely “administrative” is horrendously misleading.

    Basically you’re saying that if the voter is stupid enough to fall for allowing the price tag to rise, they deserve what they get.

  3. ML, to answer your question, basically yes though I wouldn’t use the term “stupid”, I would use the term “ignorant”. However, most votes on laws or propositions or referendums is an exercise in some level of ignorance. Most voters look to the succinct bullet points and decide from there. I would point to almost every proposition etc etc and say that most voters were ignorant of considerable amounts of details (myself included). You would have to be a lawyer and economist with a lot of time on your hands to be able to look at these and know all the details with all of the repercussions. Fortunately our system of checks and balances means opposition will look at the minutia with their experts and highlight something that does not add up. They then make it known to the voting public. They did that. They sounded the alarm on it cost more, they sounded the alarm on property values, traffic, crime, school funding will suffer, etc etc. The opposition sounded the alarm on something FAR worse than the issue of the inner monetary figures jumbling around….which is that ‘Santa Clara will be on the hook if business for the stadium goes south’ (something the pro side said was a lie). I believe the voters of Santa Clara were well aware of all these beliefs made known by the opposition. They still voted overwhelmingly for it……meaning the issue is dead unless illegality was at hand. Was the referendum illegal? Was the deal changed on paper after voters got to see it and vote on it? If so then the opposition will have a TRO at hand very soon…..except that the deal wasn’t changed. The only thing that the court folly uncovered is that politics is a shady, rough and tumble game. And ultimately, monetary figure metamorphosis aside, Santa Clara probably received one of the best deals a city has ever received from an NFL team UNLESS the opposition was right and Santa Clara is on the hook if the business goes south.

  4. I am not from the Bay Area, but one thing we have learned is certain pressure/NIMBY groups will do anything to stop almost any kind of project. Anyone remember the fight for the stadium vs people sleeping in trees at Berkeley? As it turns out the stadium and entire project are awesome. But if the leadership at Cal did not have guts to fight for the project, it would not have gotten done, same thing applies here, this stadium is needed. Anyone who watched the 49ers/Giants NFC Title game knows that Candlestick has outlived its usefulness. In fact quite a few facilities in California are the same way: Oakland Coliseum, the “Murph” in San Diego, LA Coliseum & sad to say the Rose Bowl are all in the same boat as far as having to be replaced or radically upgraded (Like Cal or Husky Stadium in Seattle). As far as the A’s are concerned, the last time the A’s had a new facility built for them was 1914 in Philadelphia, and the inability to make a profit compared to their competitors may be a reason why this team constantly gets gutted (Like in the 30s in Philadelphia, the Finley teams of the 70s and now under Beane ). It is time for them to finally get a home of their own in a modern facility (As well as a good TV contract), so they can compete against the Angels & Rangers.

  5. so when will they break ground and have some kind of ceremony? if the plan is to have this stadium open by the start of 2014, which is around 2.5 months from now, they better start doing something pretty soon.

  6. ML, part of the problem is that it’s still debatable how much the city is on the hook for. Yes the loans were for 850, but who is servicing them?

  7. I wonder, is there any legal precedent for fans, say south bay fans, suing to overturn an anti-trust exemption? I mean I think we’d have standing, as anyone who lives in San Jose has skin in the game here now with how much the city has spent acquiring land, doing EIR’s, etc…

  8. Funny how we’ve been living this Oakland San Jose drama for the last years when San Francisco is pretty much losing a team too. There just hasn’t seemed to be anywhere near the angst about the 9ers leaving the city as opposed to the A’s leaving Oakland. Growing up during the 80’s and having to endure the Montana, Rice, Lott teams, it feels weird to think of the 9ers not in San Francisco.

  9. Glad to see in this instance SC NIMBYS going down in flames. Hopefully the same happens with HSR NIMBYS on the peninsula (another topic for another blog). Congrats to the Niners and their fans.

  10. @crister – I think part of that is the name change. Once Fremont didn’t work out (Oakland A’s of Whatever) and eyes started looking toward San Jose (San Jose Athletics), the anti-SJ people started getting up in arms. For the 49ers though, they are keeping the San Francisco name so even if the SF fans have to travel further to get to a game, it’s still the San Francisco 49ers.
    .
    I think it’s an identification thing. Even if the team doesn’t play in the same spot, it is easier to continue to identify with the team if you can keep calling them what you’ve always called them. I’m not saying this is the only reason there are Oakland-Only folks, but I think subconsciously that is what triggers the reaction in some fans.

  11. Tony, to be fair in this case it wasn’t NIMBY’s. It was people who felt they’d been cheated by the circumstances surrounding the vote. And they had a decent argument. One that apparently fails in light of precedent but none-the-less was a good one to make. But like I said above, it really comes down to who is servicing that debt. If it’s the city they should have won IMO. If it’s the Niners then the Niners should have won, and they did so far.

  12. LS, you’re dead on for a large part of it I think. The name change is what puts fans who are upset but not going to complain too much about it over the edge. If you read any Oakland-Only site they seem fixated on the “San Jose” name as much if not more than anything else. Add into it that Oakland is a city slowly withering (unlike SF), the more suburban nature of football, the fact the Niners aren’t moving to San Jose proper, and that it’s 81 v 8 games every season and it rounds out why the Niners haven’t had such a visceral response from SF residents that the A’s are getting in Oakland.

  13. @ML- Your comments above are what is “misleading”, my analysis below tells the story on why the new deal is better than the original…..The judge clearly saw this and ruled in the favor of the 49ers.

    The voters of Santa Clara voted for 444M as you pointed out as their share. 333M was to include naming rights, seat licenses, and sponsorships. 114M was from RDA funds, hotel tax, and a new parking garage…..The 49ers rent payments were a paltry 5M a year.

    If the city came short on the 444M in anyway it would have come from the General Fund. That was outlined clearly in the vote and that scared Santa Clara Plays Fair……….I am glad they lost “yet again”.

    In the new deal, granted the “tax sheltered” Stadium Authority takes on the 850M loan but in exchange:

    -49ers agree to pay 30M a year in rent payments per year
    -49ers agree to pick any difference between the lease payments and debt service on a year to year basis.
    -All revenues (SBLs, naming rights, season tickets, sponsorships, parking) all go to paying down the 850M loan.
    -In the previous deal, any excess from Santa Clara’s share or the 49ers share that party would get to keep it, now everything is applied to the loan.

    In essence, the 49ers have put a permanent stopgap on the Santa Clara General Fund. How is this not good for the citizens of Santa Clara?

    That is what I call “good business” where each party made concessions and in reality the 49ers and the NFL are on the hook for the stadium loan, not Santa Clara.

    The NFL took this risk with the 49ers because they need a California site for a Super Bowl and this is by far the closest to reality.

    These new parameters would have passed even easier in a vote as the 49ers/NFL assume all the risk. The Stadium Authority taking on the loan makes sense because its “tax sheltered”.

    In the end, the 49ers are going to get their stadium in a deal that was one of the best ever for a municipality. The team and NFL take on the risk while Santa Clara gets a brand new, state of the art stadium.

    The citizens got in fact a “better deal” than before. It does not seem like it on the surface but when you dig into the details it is easy to see this is a great deal for Santa Clara.

    If the 49ers/NFL default, Santa Clara has full leverage to sue the 49ers/NFL.

    Your comments “To call it merely “administrative” is horrendously misleading” is wrong……..then again you were the one whose #s were way off from day 1 and thought this would never get built.

    • @Sid – The NFL is not taking any greater risk than they normally take with regard to financing stadia. Your Pollyanna-ish spinning of the deal is laughable. My position on the deal has always been: If there are two teams it makes sense. If it’s one team it doesn’t pencil out. The team and league can promise the moon, their problem is if the NFL hits an economic rough patch that affects its or the team’s ability to make payments, there’s only one party that’s ultimately responsible for the loans: the City of Santa Clara. The City can sue as much as it likes, in the meantime the mortgage still needs to be paid. If you think the NFL and 49ers have done some great magnanimous gesture, then you have no ability to appraise these types of deals. Honestly, if this is no big deal, as you suggest, then the NFL should go to both Cincinnati and Indianapolis and help make up their budget shortfalls. That would truly be magnanimous.

  14. Just my theory, but I think the Niners keeping the SF name is a ploy to keep Frisco at bay (no pun intended), ie no threats of lawsuits, Dianne Feinstein intervening, etc. Trust me, if the Niners had announced that they would be changing the name to San Jose or Silicon Valley, you’d see Frisco and their pols take up arms to try and stop the stadium/move. Lets see what’s happens when the Niners are physically playing in Santa Clara.

  15. Sid, the judge did not “see this” and rule on it. Judges rule using precedent and rule on the matter in front of them as it relates to it. The matter at hand was whether an already legislated action could be re-legislated by the voters after they’d already voted on it. And the ruling was it couldn’t.

  16. “Oakland is a city slowly withering” Wow, well, that’s simply not true. Sports aside, if anything Oakland has been experiencing a revitalization of sorts.

  17. eb, Oakland is the ONLY major city in California with a shrinking population. Nothing “not true” about that.

  18. Dan, that 2% drop in population was largely due to African American flight, which is happening throughout the inner East Bay as they are leaving to outlying areas. Gentrification and crime, unfortunately, are making major changes in that community. Here’s an article which explains it fully, http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/03/10/MNO91I8F86.DTL
    As to Oakland being a “withering” city, just type “Oakland renaissance,” “Oakland revitalization”, “Oakland artists,” etc. into Google and you’ll come up with articles like this L.A. Times piece http://articles.latimes.com/2011/mar/20/travel/la-tr-oakland-20110320
    Sports aside, Oakland really is and has been on the upswing. Maybe if all you see is the Occupy stuff or crime on the news you might come to that conclusion, but if you are in the Town on a regular basis, you are seeing these positive changes taking effect. Is Oakland Paris or SF or London? Absolutely, not. Is crime a huge issue? Yes. But your stereotype is just that.

  19. Regarding the lack of SF/North Penn objection to the Niners moving south; I think it just speaks to the different relationship we have with our baseball and football teams. On football game days, the stadium becomes a city in itself. On baseball game days, the game nestles its self into the routines of the actual city.

    .

    Even though I’m pulling for SJ approval, I’ll be bummed when I can’t make it to weekday evening games. I don’t feel the same way about the Niners. They aren’t apart of daily life. They’re the circus whereas the A’s are my favorite movie theatre that plays cheap double features.

  20. eb, art is nice but it doesn’t pay the bills. Taxpaying citizens and businesses do.

  21. Here is some basic common sense: Unless you live in wealthy sections of Manhattan, LA, SF or Berkeley, most people really do not care about the arts, so if there is a thriving arts community in Oakland, most people would say WHATEVER, we care more about Raider Nation. As for the rest of the country, If anyone saw the TV shots of “Occupy Oakland” and the damage they did, they would not feel so positive about the city. The Raiders, and to a lesser extent the A’s, offer the nation a positive image of Oakland, and without them they would essentially be Camden, New Jersey West. On the other hand, San Francisco has the picturesque setting, Golden Gate Bridge, Fisherman’s Wharf etc, which will not go away (Unless the 1905 Earthquake is repeated). So losing the 49ers would not be the negative that no Raiders, A’s & Warriors would be.

  22. *facepalm* @ David & Dan

  23. 1906…

    Sorry typing quickly on an iPhone is an art I’ve yet to master with my fat fingers.

  24. @Dan The article I gave and the others online cite the creation of new businesses in Oakland, so I don’t quite get your point. There are also plenty of taxpaying citizens in Oakland. As for bills, well, most all CA cities are up to their necks in them. Your view of Oakland is your own, Dan, I just vehemently disagree with your characterization.
    @David Brown While I disagree with your position on the arts being less than important, I totally agree that the sports teams in Oakland are very important to the psyche and status of the city. Oakland does indeed have a lot to lose if the Raiders and A’s jet.

  25. Tony D.
    March 6, 2012 at 10:18 AM (Quote)

    “Just my theory, but I think the Niners keeping the SF name is a ploy to keep Frisco at bay (no pun intended), ie no threats of lawsuits, Dianne Feinstein intervening, etc. Trust me, if the Niners had announced that they would be changing the name to San Jose or Silicon Valley, you’d see Frisco and their pols take up arms to try and stop the stadium/move. Lets see what’s happens when the Niners are physically playing in Santa Clara.”

    Simply not going to happen

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