Last week’s four published Letters all expressed Santa Clarans’ anger at the financing for the 49’er Stadium – proposed in the Disposition and Development Agreement [DDA] between the City, the 49’ers, and the Goldman Sachs financiers. Yet, all of the writers ignored the facts in the DDA.
The Stadium Authority [SA], NOT the City of Santa Clara, will be “on the hook” for the $850 Million construction loan for building the stadium.
The terms of the deal clearly state that loan payments can NOT come from taxes levied by the City on our citizens.
Best of all, the terms of the loan state that Stadco [a 49’er corporation] will assume the loan if the Stadium Authority can not make the loan payments.
Of course, should the SA not pay back the loan, there are a few “small” potential problems with this financing arrangement:
If Stadco has to rescue the SA, they will undoubtedly insist on complete ownership of the stadium and rights to 100% of the revenue. That means that the City’s investment of $40 Million of RDA funds and additional Millions spent on the project will be LOST.
The promised “Millions for schools and services…” in the Prop J ads will never happen.
And, who knows what it will cost taxpayers when the class action lawyers for the stadium bond holders come after the the City ? They will claim that the Prop J “separation” of the SA from the City is a “legal sham” – and that Santa Clara tax payers are obligated to rescue the SA by paying higher taxes.
We better hope that the rosy claims in the Prop J ads come true – that the stadium will not add to our taxes and will bring economic growth.
