Abraham Lincoln had a lot of fun in his tenure as an attorney on his way to the White House.
In one of his trials he asked a witness “How many legs does a cow have?” The witness replied “Four.” Lincoln then asked the witness “So, if we called the cow’s tail a leg, how many legs would it have?” The witness replied “Five”.
“No,” replied Lincoln, “Calling a tail a leg doesn’t make it a leg. The cow still has four legs.”
This seems to be the situation we have in Santa Clara. There has been a lot of name calling in regards to our relationship with the 49ers. But calling names and making accusations does not change our mutual contracts.
While the 49ers have been vilified as the bad partners in a stadium arrangement that has soured over the past year and a half, the City has not exactly been operating with “clean hands”.
First, we need to look at contracts from which most agreements are arranged and from which most disputes arise.
The City and the 49ers worked in tandem for more than two years in coming to a workable agreement that would permit the building of our stadium, guarantee a cash flow that would retire the debt, absolve the City from using any monies from the General Fund, and provide specific funds for contingencies.
Second, we must either agree to abide by the contract, renegotiate the contract, or (as a last resort) take legal action to resolve any conflict in the contract.
It appears the 49ers negotiated a very good agreement with the City based on the payout results. It also looks as though the City has been a substantial beneficiary.
However, when it comes to money, it’s like slicing up a cherry pie. The other slices always look bigger, and often better, than the one we were served.
No one can fault the 49ers for being astute in their negotiations. After a full year of operations, the contract with the City stated the stadium rent would be adjusted and reset based on performance. This rent reset amount would remain level for 30 years. The City Council agreed to this contract in 2014.
After a full year of operation, the calculations were completed which indicated the 49ers rent would be reduced from $25 Million to about $19 million. So, about a $6 million a year reduction.
When the City did the math, they saw $6 million a year becoming $180 million over the life of the contract. This created a firestorm of dissention, disagreement and division.
Since the City would not cooperate in good faith and accept the contract terms, the 49ers filed for arbitration to settle the issue. This is still ongoing.
The City then threatened to take over the stadium operations for breach of contract.
The 49ers have fired back and filed a new law suit against the City for failing to provide proof of allegations, acting in bad faith and failing to provide facts to substantiate their claims.
Now, while the 49ers have been dismal on the field, they are a powerhouse in the management department. Since opening of the stadium, they have paid down the debt by $200 million, placed $5.5 million in our General Fund, added another $3 million to the contingency fund and paid $2.5 million more in youth and senior ticket tax. This of course is in addition to the rent.
It just seems that all these unnecessary legal battles are using up a lot of City money we could be using for affordable housing, street repairs, senior service upgrades and youth soccer. That seems like a better leg to stand on.
We would like to know what you think.
