Even more interesting, apparently the Oversight Board cannot be sued!

The 49ers tried to paint a dire picture about losing this $30M--they claimed that this $30M was the key to securing all the rest of the funding. I'd love it if that were true (although it is interesting that the big loans have apparently not funded yet), but I won't hold my breath.

The 49ers knew the risks when they loaned the money to the SA. I'm sure they will find some way to bill the project for this cost.

Neil,
The Merc is wrong on several counts which you have repeated. There has never been any agreement between the county and the 49ers. The contract with the 49ers stadium LLC is with Santa Clara's Stadium Authority, not with the city directly or with the redevelopment agency (RDA) which Gov. Brown dissolved.

The County did not step in and offer any money to the 49ers. Never has. And there's never been a contract for the stadium with the county. It's always been redevelopment money from the city of Santa Clara. The 49ers loaned the Stadium Authority $30 million expecting under a cooperation agreement between the Stadium Authority and the RDA that the RDA would hand over $30 million in property tax dollars. This was despite the fact that in Jan 2011 our governor said he was eliminating RDAs, and the 49ers went ahead and made the loan knowing that there was the possibility that RDA money would go away.

The oversight board is not just the county. There are 2 county reps, plus 2 from the city of Santa Clara, one from the school district, one from the water district, and one from the community college district.

The motion was made to terminate the cooperation agreement between the RDA and the Stadium Authority, thus cutting off the flow of funds from the RDA to the Stadium Authority, leaving the SA with no access to RDA dollars or any other dollars or source of income. Thus, the 49ers have loaned money to a city agency which has no money to repay the loan.

And the Measure J stadium ballot measure says that neither the city nor the RDA are liable for the obligations of the Stadium Authority.

The 49ers jumped the gun in starting construction before having funds from the loans in hand, and while tremendous uncertainty existed regarding whether or not RDA funds would be available. They gambled by loaning money to a city agency which has no taxing authority and no income.

FYI the chair of the oversight board said that the oversight board cannot be sued (as the law was set up by the Governor to prevent lawsuits against the oversight boards.) The 49ers themselves wrote the ballot language which put a firewall in place between the Stadium Authority and the city (it was their ballot initiative).

And Measure J did NOT say that the RDA had to give exactly $40 million. It said 'up to' or 'not to exceed' $40 million. That can be anywhere between zero and $40 million and still be compliant with the law.

Our council member Kevin Moore expressed surprise that the school district would vote in favor of money for the schools rather than handing over money to a private party. They clearly thought they had the votes on the oversight board to say yes to whatever the 49ers want, just as our pro-stadium council majority has been doing for 6 years.

And county counsel said at the meeting that the Stadium Authority was created as a Joint Powers Authority between the city and the RDA to "wash" money between the RDA and the 49ers because under redevelopment law, the RDA couldn't give money directly to the 49ers.
So the money would flow from taxpayers, to the RDA, to the SA, to the 49ers. The link between the RDA and the SA has now been broken.
Thanks to the oversight board for their leadership on this.

Watch the video of the meeting to see what really happened. Clearly, the SJ Merc reporter didn't bother doing that, but just relied on the city and the 49ers for his sources.

Sorry for the shorthand. To be more precise: It was long expected that the county-controlled oversight board would approve the city using $30 million in property taxes that no longer went to the RDA when the RDA was dissolved. On Friday, the board said, "Screw that, we have better things to do with the money." Now: lawsuits!

Neil- It may have been long expected by the 49ers and city of Santa Clara pro-stadium council members that the oversight board would give its approval, but then those who were expecting the county and school district to side with the 49ers/city of Santa Clara didn't pay attention to the following:

When Gov Brown's legislation AB1x26 (does away with RDAs) and AB1x27 (would allow a pay to play scheme to keep some form of RDA) was challenged before the CA Supreme Court by the cities which have RDAs (including the CITY of Santa Clara), the COUNTY of Santa Clara together with Santa Clara's School District (which has been bled for decades by the RDAs) was on the side of Gov Brown in the court case (i.e. get rid of RDAs as we know them.) The County of Santa Clara has been financially burned big time by San Jose's RDA, which owes something like $60 million to the County. So anyone who thought the county and the school district would vote to give away tens of millions of dollars of desperately needed funds to an extremely wealthy private party rather than use those funds for education and services to people in the county wasn't paying attention to the lawsuit and who was on what side.

FYI the pay to play option was struck down by the CA Supremes, so only the 'do away completely' with the RDAs was left.

Yes, some county supervisors and school district members and community college members endorsed the stadium ballot measure. But that was at a time when there was no choice between the 49ers getting the RDA money and taxing entities getting the RDA money. And the 49ers campaign machine made sure that people didn't know how badly the RDA was bleeding all of these agencies - there wasn't press coverage on that. Rather, the press coverage and 49ers campaign machine put out incorrect information - that RDA dollars weren't 'real' dollars and that if RDA dollars weren't spent on the stadium they would be returned to the state (when the dollars are actually locally collected property taxes.) Plus in the past 2 years things here have gotten financially much worse for government agencies, which are running budget deficits at all levels in CA. Furlough days, worries about pension costs, layoffs, etc. seem to be the norm in many cities and school districts here. There just isn't any extra money to give away.

Karma.

cohn.blogs.pressdemocrat.com/15767/very-bad-if-49ers-sue-santa-clara/

A good article on why the 49ers shouldn't sue.

Well, it sounds like the Santa Clara council is in full fire alarm mode today. Closed door session to study legal strategies and who knows what else. Notice what should be the 49ers problem has turned into the city's problem. What a bunch of doormats.

The 49ers are talking out of both sides of their mouths, 1) this is no biggie and we'll eat it and 2) you're getting sued.

I almost hope the 49ers sue. People will see what classy, nice guys they really are.

I wish I could find this now, but on CSNBA (Comcast Bay Area) last night, the conversation with the host (Jim Kozimor) and his guests got very heated. It's clear that Koz (as he's called) was the only one who thought the 49ers were in the right here.

It's important for people to understand -- this isn't about how 3% of the project will be funded, or about TV screens, or even about teachers. It's about how this project really isn't funded at all yet. The 49ers have been playing a game of, "Well, we got this started, and we're not going to stop because of this."

I'm glad this came up early. And I hope someone sues someone else soon so we can put an end to these shenanigans.

No more work until everything is funded. Is that too much to ask?

Here's the rest of Cohn's column. He was one of Kozimor's guests -- and he is pretty peeved at this entire thing.

www.pressdemocrat.com/article/20120625/NEWS/120629682/1057/SPORTS0908?Title=Hey-49ers-show-me-the-blight

Mike,

tnx for the links to Lowell's columns (he's a Joseph Conrad scholar). I fondly recall him in the Sporting Green in the '80s. Good times.

Thanks Mike!

Comcast was extremely pro-stadium during the Measure J stadium campaign, to the point of allowing Jed York access to air time and not allowing opponents any air time.

And you're right - the project isn't funded at all yet. The loans were supposed to fund two months ago. Hopefully the lenders are really scrutinizing how the loans will be paid back - because those of us who live here and study the numbers don't see the dollars to pay back the loans. There have been boatloads of season ticket holders who've reported in the news/blogs that they aren't buying psls. And if there was a naming rights deal, they'd be shouting it from the rooftops. The Merc article of this morning also seems to indicate that the NFL's loan hasn't funded either.

The 49ers wanted so badly to start construction that they invested $30 million prior to having money in hand from the RDA or the banks or NFL.

Cohn writes the obvious that building stadiums with RDA money where there was no existing blight is a gross misuse and abuse of their [supposed] intended purpose. He advises the 49ers to simply eat this and eschew lawsuits.

Most sportswriters don't think in these terms. Heck no one on the Mercury staff could ever express an opinion that wasn't given to them from the 49ers or stadium mob,

This whole Stadium Project by the Yorks as been built on Scheming the Elected Officials of Santa Clara, Lies, and overwhelming Hype from the York Family. Along with the willing hand of the Media, aka "The SJ Mercury News" shilling for the 49ers.

This is the real reason that the Yorks upped the start of their construction on the stadium, to outrun the Truth from catching up to them.

Bravo to the Oversight Committee, finally someone is looking out for the taxpayer in THIS GAME OF LIES!

It sucks for the city of Santa Clara that the public voted for a lie perpetrated by a corrupt council.

Fut for our sake, in San Diego, hopefully this debacle will be a much needed wake up call against the Chargers' attempts at fleecing our city coffers.

@John, please be aware that in the state elections code there is no requirement for cost disclosure for city-wide ballot measures. That's how the 49ers and our pro-stadium council members were allowed to put a measure on the ballot that didn't disclose the costs of the stadium and didn't disclose that the Stadium Authority would take on hundreds of millions in loans for stadium construction.

So if your ballot measure (if there is one for a Chargers Stadium at some point) is written only for the City of San Diego, please be aware that the team/your city council can legally hide the costs by not disclosing the costs on the ballot.

When Santa Clara was sued to put the costs on to the stadium ballot measure, Santa Clara's city attorney actually argued in front of a judge in April 2010 that there was no legal requirement to disclose costs to the voters on a city-wide ballot measure (on state and county measures there is such a requirement.)

We've had our city staff acting against the best financial interests of the citizens of Santa Clara throughout this whole stadium mess. Nice to know they're working against our financial well being at the same time they're collecting paychecks paid by our taxes. Also, a couple of them are now double dipping - they retired and went to work as 'consultants' for the Stadium Authority. This includes our former chief of police, who campaigned for the stadium, then retired 6 months later to collect an almost $200K/yr pension, plus consults at $100 per hour on stadium security matters.

Another double dipper is our former assist. city manage, Ron Garrett, who a couple years back asserted the stadium presented no financial threat to the city (how the heck would he know?) quit his job, and now consults for the city on the project.

Santa Clara city politics--rotten to the core.