A discussion about the Santa Clara Stadium Authority’s upcoming budget caused the mayor to bemoan the lack of an agreement indemnifying it for the time employees have spent preparing for Super Bowl LX.
At a study session Tuesday night, the Board got an overview of the 2024/2025 budget for Levi’s Stadium. During his presentation of the budget, Kenn Lee, the Stadium Authority Board’s treasurer, noted that costs for the FIFA World Cup and Super Bowl LX are still unknown.
That is because negotiations for the games, both slated to be held in 2026, are still ongoing with the Bay Area Host Committee.
Stadium Authority Executive Director Jovan Grogan told Mayor and Board Chair Lisa Gillmor that his office intends to recoup “every dime” possible for work done preparing for the game.
Despite this, Gillmor still said she was “concerned.” Since the game is an NFL event, she said, the Stadium Authority should be reimbursed for “all” time spent making it happen. The Bay Area Host Committee should pony up for those costs, she said.
“That’s not something I want to see coming from the Stadium Authority budget. That should be a separate thing,” Gillmor said. “The last time we did Super Bowl, three years before the event, we had the agreement before work was even done. This — we still have no agreement, and who knows when we will have an agreement.”
Grogan explained that the NFL changed its bidding process in 2018, so the Stadium Authority did not know that Levi’s Stadium would host the Super Bowl that far in advance.
He repeated his commitment to securing as much compensation for employees’ time spent preparing for the Super Bowl. However, he noted that negotiating parties rarely reimburse for time spent negotiating.
Non-NFL Revenue Slumps
Another notable point of contention was a drop in expected revenue from non-NFL events.
Although the Stadium Authority saw a spike in recent years — $7.8 million projected for this year and $8.8 million last year — next year is likely to see a slight dip. Lee said projections show the three scheduled concerts and four scheduled soccer games will only yield $5.5 million in non-NFL revenue. He called that figure a “point-in-time number,” meaning it is subject to change.
Alex Acton, a lobbyist for the Forty Niners Management Company (ManCo), said the landscape for events such as concerts can change swiftly, but that judging subsequent years by the standard of the previous two years is not reasonable.
“The actual results depend largely on factors that are not totally in our control,” Acton said. “In particular, the schedule for major events are dictated by the promoters and the artists, not necessarily by the stadium manager.”
Debt Service Slows, Capital Expenditure Reserve Looking Meager
Although the Stadium Authority’s paying the debt on the stadium will slow a bit next year, it will still shave $8.4 million from the total cost of the stadium. That debt reduction will bring the total outstanding debt for the stadium to $220.4 million, just a third of the total debt a decade ago.
Lee called the number “significant progress.”
Capital projects are continuing to trend up with $22 million earmarked for both new — including LED installation, waterproofing and camera upgrades — and carryover projects. Among those projects is also a $2.7 million for a sign upgrade, required as part of the amendment to the naming rights agreement with Levi’s.
Despite planned capital projects going forward, the reserve for such projects is scant, tallying just $3.4 million, something that Lee said is unsettling.
“It is a very small amount for an asset that is close to $1 billion in value. We will continue to work with our stadium manager to prioritize the top projects and then identify any revenue source as needed to maintain the facility,” he said. “We are concerned that if there are needs beyond this, we may need additional funds.”
Win Some, Lose Some
The Stadium Authority still has roughly $14.5 million set aside for legal contingency — money held in a sort of financial limbo in case the Stadium Authority loses two lawsuits with ManCo. Those lawsuits involve reimbursement for police and buffet costs.
Other notable shifts in the nearly $66 million stadium budget include a $393,000 reduction in operating expenses due to fewer turf replacements and a $268,000 increase in administrative costs due to cost-of-living-adjustments.
The next regularly scheduled meeting is Tuesday, March 5 in the Council Chambers at City Hall, 1500 Warburton Ave. in Santa Clara.
Members of the public can participate in the City Council and Santa Clara Stadium Authority meetings on Zoom at https://santaclaraca.zoom.us/j/99706759306; Meeting ID: 997-0675-9306 or call 1(669) 900-6833, via the City’s eComment (available during the meeting) or by email to PublicComment@santaclaraca.gov.
Related Santa Clara Stadium Authority Posts:
Levi’s Stadium Has Made $659M, Boosted City’s Bottom Line $21M
Levi’s Stadium Budget Shows Net Gain For Non-NFL Events
View Comments (3)
"He (Grogan) repeated his commitment to securing as much compensation for employees’ time spent preparing for the Super Bowl. However, he noted that negotiating parties rarely reimburse for time spent negotiating." This is no different than any other company to include real estate brokers, Gillmor should know this. RE Brokers typically don't ask buying or selling clients for money up front or insist on invoicing time and material (T&M). Neither do corporations. Companies generally walk into a competitive process knowing that discovery, proof of concept, and negotiations are part of a business development cycle, and a Bill of Materials will be confirmed during final bidding to recoup efforts, expenses, and future profit. Regardless of real estate, a corporate partnership, or small-town pizza shop...investments are made with hopes of recouping expenses when the deal is won and during the subsequent partnership. This sounds more like Gillmor is trying to establish herself as the city authoritarian and permanently affix a label of combative “bureaucrat” to City Manager Grogan as she has been doing for the past few weeks during this Measure A and B cycle.
Is Gillmor whining and moaning about the situation again, instead of working on solutions?
I'm shocked. Shocked, I tell you.
I was thinking the same thing as the two of you. I worked for a company who submitted multiple proposals daily and never expected reimbursement for bidding. It seems to be looking for something to complain about.