A recent article by the San Francisco Chronicle that outlined a potential $38 million loss to the City of Santa Clara for hosting the FIFA World Cup may be premature. Several sources with insight on the negotiations told The Weekly they’re not sure how the Chronicle arrived at its numbers.
In an article posted last week, the news agency had detailed information about the costs. It outlined up to $50 million in expenses for hosting six FIFA World Cup games, including up to $14 million in police fees. According to the article, the City might only receive $12 to $14 million in ground lease rent, leading to a potential $38 million loss.
The Chronicle cited a source within the City but would not name that source. When asked to confirm the numbers, the City did not offer as much detail.
“No, we cannot confirm this information at this time. Any communications on this subject between Mr. Googins and the Council/Stadium Board were confidential attorney-client privileged communications,” said Santa Clara Chief Public Information Officer Janine De la Vega.
The term “confidential attorney-client privileged communications” was used several times by the City in response to The Weekly’s questions.
Negotiations Continue Between City and BAHC
One of the reasons the City was not forthcoming with information is that there is no agreement in place between the City/Stadium Authority and the Bay Area Host Committee (BAHC).
Right now, all numbers are simply speculation because until that agreement is in place, it can’t be determined what costs will be absorbed by the City and what will be absorbed by other agencies, whether through upfront payments or reimbursements.
In a statement to The Weekly, Santa Clara City Attorney Glen Googins said City staff is still working out the terms of the agreement with the BAHC to make sure that Santa Clara is made whole.
“At the center of these negotiations is an agreement with the BAHC that commits them to assume the costs for World Cup events to be held at Levi’s Stadium,” said Googins. “This will include the obligation to reimburse the City for all necessary public safety costs. The BAHC understands and has agreed to this premise, with the details for this, and many other terms, still under negotiation.”
A spokesperson for the BAHC also reaffirmed its commitment to making sure the City’s finances are protected.
“The Bay Area Host Committee is committed to ensuring the success of FIFA World Cup 26 for Santa Clara residents, businesses, and government agencies,” said a spokesperson for the BAHC. “In fact, we’ve spent the past 13 months working diligently with City of Santa Clara staff on an agreement that would protect the city’s finances consistent with Measure J, as has been the case for other major events. We look forward to finalizing that process soon.”
Googins says once the proposed terms of the agreement are identified, it will be presented to the Council/Stadium Authority Board and everything will be made available to the public.
“At that time, the details of such proposed terms, along with projected event revenues and costs, will also be available for review and input from the public,” said Googins. “Unless the City Council/Stadium Authority Board directs otherwise, the legal analysis that my office conducts regarding the risks associated with Stadium Authority/City involvement with this event will continue to be provided to the Stadium Authority Board and City Council on an attorney-client privileged, confidential basis.”
He did not offer a timeline for when the issue might appear on the City Council agenda.
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That is why the Chronicle wrote that it “could” cost us “up to” thirty eight million dollars.
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Which is why the article was not premature.
Here’s the thing about the way Measure J works. It specifically says the city’s General Fund cannot be used for stadium expenses. The Stadium Authority (the city’s holding org) gets money, and the money that it receives flows to the General Fund. Well what happens if the Stadium Authority has extra money? It goes to the general fund as we saw for the first few years of stadium operations.
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So now what happens if there are public safety or other expenses for the stadium NOT covered by the current contracts (e.g., non-NFL events)? Well, the Stadium Authority dollars pay for it. It is technically not coming out of the general fund, but the money that COULD have gone to the general fund never made it there. While no money was taken out of the general fund, no money went into it either.
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This is just creative accounting. If the stadium made money and it went to general fund, then any cost overruns or public safety costs would be pulled back out of the general fund, something that Measure J does not allow for. SO, money never really makes it to the general fund, screwing the city that much more.
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And the really sad part, the council majority (the 49er Five as described by the Grand Jury Report…remember that???) is perfectly happy letting it all happen. It’s like they are the village idiots. The problem is, they are the ones that approve the settlements agreements and give the 49ers everything they want. Who knows what Monday’s Closed Session accomplished (I saw no reportable action from he city attorney), but if it anything like the last one, they will just give the 49ers everything and have no clue as to why it is bad for Santa Clara. And they just don’t care.
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You may say, “Well, that’s a crappy attitude.” To which I would respond, not really. It is reality. Look at the council majority allowing Anthony Becker, an indicted member of the council literally caught providing confidential documents to the 49ers directly via Signal, the encrypted app, to become the vice-mayor. What a joke! Sure, the vice-mayor title is merely a title, but it speak volumes in the lack of integrity of the council. Why would they give this hoary distinction to someone that is at best implicated in scandal and at worst a felon? Why not just say, “You know what, it just looks bad to have him in that role.” Why, because they are cowards and lack integrity.
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Why do they let Anthony Becker vote on any 49er item when he is indicted for putting 49er interests over the City of Santa Clara, a city he swore to protect? Because the council majority lacks ethical behavior. It is amazing to me that the council can just act like “business as usual,” allowing Anthony Becker to seriously participate in 49er discussions. Where is your integrity Suds? Park? Anyone???? You are so blinding your rage against Mayor Gillmor and Councilmember Watanabe that you punish them at the expense of the city you are sworn to protect. You all should be ashamed, but I know you are not. You have made a deal with the devil, and now it is too late. I feel sorry for you and your soul. You have to find a way to feel good about what you are doing, lying to yourself every day. And can you imagine what kind of $hit show this would be right now if Becker was mayor right now??? Just think about that. Becker should resign and show some humility. He embarrasses District 6 every day he is in office, and I am ashamed that he represents my district. July 29th can’t come soon enough.
Premature is not the issue, whether the assertion is accurate or not is. Given the financial disaster that many large events (such as the Olympics and indeed FIFA World Cup have been to many host countries and the tainted reputation of both parent organizations I think it entirely reasonable and necessary for the press to insist on exposing the material risk of these events. Getting lost in the glamour and profile of the games without considering the benefit to the community is precisely what some parties would seek – good job by the Chronicle!
Thank you once again for your ongoing reporting on this vitally important subject, involving tens of millions of dollars: A few observations and questions:
(1) 6 games multiplied by 65,000 seats multiplied by $500 per seat equals 195 million dollars. How much of this money would FIFA receive? How much worldwide television revenues would FIFA also receive for these games? How much money is FIFA expending with respect to these games? Approximately, what would be the anticipated net revenue/profit to our Stadium Authority/City if it allows FIFA to use our stadium — the only one of its size in Northern California — six times?
(2) (a) Are there any VALID contracts currently existing between FIFA, the Stadium Authority, and/or our City? (b) Are there any contracts currently existing between FIFA, the 49ers, Stadco, and/or Manco? (c) Between BAHC, FIFA, and/or the 49ers?
(3) Given its ad hoc nature and the stagflation (i.e., inflation/recession) we are currently experiencing, I am concerned that BAHC might not be able to raise the amount of funds from businesses, charities, etc. which it seems to be vaguely indicating that it can. If BAHC is unable to raise these funds, will the City/Stadium Authority be left holding the bag for millions of dollars or more?
(4) Accordingly, I would like to see any contracts — which the Stadium Authority/City has (or may have in the future) with FIFA to allow WC soccer games to be played in OUR stadium (and City) — be made contingent upon/conditioned on BAHC first raising and placing the required amounts of money in an ESCROW account by July 2025 (i.e., a year before the World Cup in 2026).
Gee, I wonder who the chronicle’s informants are. The Karens on the city council, maybe?
It is interesting that in his response to this article, Mr. Vartan emphasizes that no money has gone into the General Fund. What he does not elaborate on is that in one of the April City Council meetings, one of the City Finance officers stated that there has been $14million from stadium events put into the City’s legal fund to pay for the lawsuits the City has against the 49ers. Lisa Gilmore then pressured the Finance officer to then state that there had not been anything put into the City’s General Fund. So, apparently there is a policy in place that the Legal Fund gets paid BEFORE the General Fund. Wow! That seems really smart – Right?