Santa Clara sells the farm to win Super Bowl

As the cities of Santa Clara (+ San Francisco) and Miami get closer to the NFL’s May awarding of Super Bowl L to an official host city and stadium, one city is struggling to get its ducks in a row whereas the other is taking care of its final bid details. Miami’s bid is flailing as funding for a major upgrade to Dolphins Stadium remains in limbo. Meanwhile, Santa Clara’s City Council is prepared to approve a series of concessions to the NFL that should sew up the game for the South Bay, while creating a risk that Santa Clara will run in the red in the process.

To help pay off the 49ers stadium, the Stadium Authority has several revenue streams tied to taxes and fees employed for every Niner home game and other events. The NFL requested that such fees be waived for the Super Bowl, and apparently the City is more than happy to comply. Fees being waived include the following:

  • 10% NFL Ticket Surcharge – At a conservative set price of $500 per SB L ticket, the $50 surcharge would yield $3.75 million with an expanded capacity of 75,000.
  • $0.35 Ticket fee – Meant to fund some senior and youth programs. A cap of $250,000 per year is imposed on this revenue source. If the 49ers play at least one home game, it’s likely that the 49ers would hit the cap, rendering additional collection of this fee moot.
  • Hotel tax – A Mello Roos district was created to provide some stadium funding, backed by a hike in the transit occupancy tax from 9.5% to 11.5% in the stadium’s immediate area. The NFL asked for its share (350 rooms for an unspecified number of days) to be waived. Assuming that the NFL needs 350 rooms for the full two weeks, the City would forego some $70,000+ in hotel taxes. The City notes that it expects to make up this loss via taxes collected on additional room bookings.
  • Off Site Parking fee – The City has imposed a $4.54 fee per space for event parking. That too will be waived. This appears to be for all Super Bowl activities, not just the game itself. The City notes that the fee is meant to offset the cost of traffic management.

The non profit San Francisco Super Bowl Committee is supposed to reimburse the City for the cost of services rendered by the City (and other jurisdictions). The committee is not going to backfill the City’s lost revenues. Strangely, no estimates of this impact were disclosed, even as the City touts $300 million in additional economic activity for the region. Much of that major economic impact will be felt in San Francisco, where the majority of non-game events will be held. The key will be the layout of the Super Bowl hub surrounding the stadium. If attractions such as the NFL Experience are staged at Moscone Center instead of the Santa Clara Convention Center, real economic impact for Santa Clara will be limited outside of Super Bowl Sunday.

A year ago I wrote about what it would take to host a Super Bowl in the Bay Area, and despite Santa Clara “taking one for the team”, there is a burgeoning sense of excitement about the possibility of hosting the big game. It’s just too bad that the City Council, knowing it had at least a little leverage with the knowledge that Miami is struggling so much, hasn’t considered driving a harder bargain with the NFL. Maybe next time – if there is a next time.

26 thoughts on “Santa Clara sells the farm to win Super Bowl

  1. Dolphins bid is failing because of backlash over the Marlins stadium financing.

  2. I know those. They are awesome (building the wifi network)

  3. @ML: sorry, this is off topic, but I’m doing some research and I had a question about something we had chatted about in the comments a long time ago. Is there a way I can get in touch with you directly (email?), or something other way to send a quick note? Also happy to just drop the question here in comments, but don’t want to distract. Thanks in advance.

  4. I was fortunate enough to go to this years superbowl, seeing how many communities outside of New Orleans benefited. I think SC and the whole Bay Area will feel a positive impact.

    We stayed in Gulfport, MS which is about 70 miles outside of New Orleans. All the hotels in Gulfport where full of Super Bowl Attending fans, mostly ravens :(…. fans.

    We stayed at a best western wich has a normal rate of $85 a night during the high season. THe SB weekend rate was $150.

    Resturants, Bars and hotels 70 miles away were full of SB attending fans. On the plane ride over about half the plane was going to the SB, no one was staying in New Orleans. They were staying in the surrounding communities.

    SC may get a hit from not collecting these taxes but a few weeks ago the merc reported that $400 million worth of SBLs have already been sold, 25% left to sale and they except to sale out.

    So that is why i think they did not need to play hard ball with the NFL, they expect to cover almost all the construction loan of $450 million from SBLs alone. They havent even sold the naming rights yet, cash is flowing in fast..

  5. All those fans coming from out of town will be staying in SF and eating and drinking and paying taxes there. And for every tourist SC brings in, they’ll probably just displace a local who will be avoiding the whole area. Boondoggle. The super bowl’s gotta be somewhere and the NFL wants it in new places with new stadiums – no reason to bend over backwards for them

  6. Frisco is going to get the benefits (full hotels, full restaurants, etc) of the Super Bowl. Santa Clara is going to get the bill (police coverage, traffic, etc)….

  7. Comical idea that the Cubs would threaten to leave Wrigley. They obviously get way more revenue playing there than they lose by having neighbors sell rooftop tickets. The “Chicago Cubs” split from Wrigley Field don’t really have any unique value. No reason for Chicago to give them any special handouts.

  8. Tim you say that, but the same thing could have been said about the White Sox 20 years ago or the Red Sox 10 years ago. And the White Sox did move out of old Comiskey and the Sox were VERY close to moving out of Fenway if not for a last second repreive. If Fenway isn’t above reproach there’s not way Wrigley is either. It needs some serious work to remain a viable MLB venue independent of ancillary revenue generators. That’s not to say I fully believe they’ll be moved, but having another options definitely makes the likelihood that Chicago will be forced to pony up that much more likely. And if they don’t it is more than plausible that Wrigley’s days are numbered.

  9. 9ers new stadium being considered possibly as a rotation spot for the pro bowl. from espn:

    “Commissioner Roger Goodell has been down on the quality of the Pro Bowl for the past few years although he reiterated Monday he saw a better product this year. Still, Goodell would be willing to eliminate the Pro Bowl game at some point. A decision is needed soon on where the game will be played.

    The NFL has also discussed rotating in places such as Phoenix, New Orleans, Miami and possibly the new stadium in San Jose, a source confirmed. If the game continues, it will be played the Sunday between the championship games and the Super Bowls because ratings for the Pro Bowl have been good.”
    http://espn.go.com/nfl/story/_/id/9071876/owners-delay-helmet-vote-pass-2-other-rule-changes

  10. be nice to have a outdoor venue the niners new stadium is as a regular part of the super bowl rotation.

  11. KTVU last night referred to competing Super Bowl bids from Miami and “the Bay Area.” How about referring to it as competing bids from Miami and Santa Clara? Because the media is going to do its part to pretend that the 49ers will still be in Frisco when in fact, they are leaving.

    • @pjk – The committee putting together the bid is the “San Francisco Super Bowl Committee”. Santa Clara is merely a place that has a venue.

      @all – The Cubs’ official statement is that they are continuing to focus on Wrigley, which is smart. If talks with the City completely hit the wall, then they can start talking about stalking horses.

      @jeffrey – Here.

  12. If the Cubs are serious, more power to them. The Cubs moving to a new stadium in the burbs turns them into the Milwaukee Brewers. Good luck getting 3 million fans to pay when they’re losing 100 games and their stadium is no longer brand new.

  13. Glitz and glamour continue to be blinding factors, despite the plethora of studies that tell us public expenditures, more often than not, fail to provide a benefit worthy of their cost….ESPECIALLY sports-related projects and stadia in particular.

    Though I seriously won’t care one bit what the cost-benefit analyses of a new A’s stadium indicate. There’s the psychic cost of waiting that a lot of people seem to be ignoring, but its growing and growing and growing.

  14. The Cubs story, if anything, is leverage to get what they want at Wrigley. It’s a 25 acre site crammed next to the Tri-State Tollway under a busy O’Hare runway flight path.

    For comparison, Miller Park is 25 acres on a 265 acre site.

  15. “Tim you say that, but the same thing could have been said about the White Sox 20 years ago or the Red Sox 10 years ago. And the White Sox did move out of old Comiskey and the Sox were VERY close to moving out of Fenway if not for a last second repreive. If Fenway isn’t above reproach there’s not way Wrigley is either. It needs some serious work to remain a viable MLB venue independent of ancillary revenue generators. That’s not to say I fully believe they’ll be moved, but having another options definitely makes the likelihood that Chicago will be forced to pony up that much more likely. And if they don’t it is more than plausible that Wrigley’s days are numbered.”

    No one ever went to see the White Sox for Old Comiskey, but they do see the Cubs specifically to see Wrigley. As for Fenway, it wasn’t exactly last second, and while the Red Sox considered moving across the street they then realized that they would make more money in an authentic old stadium than a fake new one. The Cubs will do the same.

  16. Having been trapped in work till you drop mode for an extended period, I haven’t been following the Wrigley stuff at all. Can anyone point me to a place that details what exactly the Rickett’s want?
    .
    Looking at the site in Rosemont, all I can do is laugh. If the owners of the team are so short sighted as to trade what exists at Wrigley (only place even remotely like ti is Fenway) for that parcel of land… Just wow.

  17. The Santa Clara city council has been doing nothing but conceding everything to the 49ers ever since that team decide to make its headquarters in their city many years ago.

    This story (about giving away the farm just to host the SB) is yet another in a long line of poor decisions by this city council, and it makes me feel very sorry for the poor Santa Claran taxpayer (it’s a small suburb, so there are barely 65,000 taxpaying units, in a suburb with a population of less than 120,000.)

    But the big dig is against the NFL. Those shuckers game cities and states all over the country to get themselves new stadiums paid in whole or in part by taxpayers. And the taxpayers are always on the short end of the stick.

  18. Yes, Santa Clara does appear star-struck. But Santa Clara is about to find out it will get as much benefit from hosting an NFL team as Landover, Md. (Redskins), Irving and Arlington Texas (Cowboys), Orchard Park NY (Bills) and East Rutherford, NJ (Giants, Jets). As in, not much…

  19. @PJK

    The same thing can be said about Oakland with it’s sports teams. I don’t think running 20 million a year in the red just to say we have professional sports really brings much to the community outside of espirit de corp. Last time I checked most sports teams and out of town visitors stay in SF or the surrounding areas if they visit Oakland for a Raiders or A’s game.

    I would not group Arlington, TX when it comes to the other locations that you have mentioned. Arlington has their stuff together when it comes to paying off stadium debt. By the time Oakland pays off the Mount Davis, the debt for Cowboy Stadium will have been paid off.
    The events at Cowboy stadium bring in an estimated 40 million a year to the Arlington area alone.

    If Santa Clara does get awarded the SB as expected the event should generate over $200 million to host city and the surrounding areas.

    http://www.dallasnews.com/news/cowboys-stadium/headlines/20121121-arlington-s-record-sales-tax-revenue-will-pay-off-cowboys-stadium-debt-years-early.ece

  20. i remember the last time oakland held a “national event” was when they hosted the western regional finals for the ncaa tourney, the year ucla beat memphis i think. that weekend went to jack london square and it was basically empty or as it was on a usual weekend. now the super bowl is a whole lot different but i’d guess frisco as a whole will be the primary benefactor.

  21. Didn’t I read that in NO every hotel room within 70 miles of the stadium was booked- if so applying that same scenario to the Bay Area then the entire region will benefit from the SB- not just sf- Filling up hotel rooms at probably 3x their usual cost on a weekend when they typically are vacant- not to mention all these people want to eat and drink- gotta be alot of value for the entire region

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