SANTA CLARA — The spat between the city of Santa Clara and the San Francisco 49ers escalated this week when the city’s stadium authority board voted unanimously to seek about $5 million in unpaid rent from the team.
The 49ers have told the city they are not paying 20% of this season’s bill because the coronavirus pandemic caused the cancellation of two exhibition games at Levi’s Stadium, City Attorney Brian Doyle said.
But there’s no provision in the lease agreement that gets the 49ers off the hook as a result of the National Football League’s cancellation of the entire preseason schedule, he added.
In a closed session Tuesday, the city’s stadium authority board — comprised of Mayor Lisa Gillmor and the City Council — approved filing an arbitration claim to recover the lost money from the team. It is unclear who will arbitrate the case.
The city says the 49ers owe approximately $2.7 million now and it anticipates the figure to climb to about $5 million by the end of September.
The board’s decision to file for arbitration comes five days before the 49ers open their season at home against the Arizona Cardinals and caps a tumultuous off-season between the city and the team.
In February, the council voted unanimously to end an agreement that allows the 49ers to operate the stadium for home games and other NFL events. But because the team and city are engaged in litigation, the 49ers’ management of the facility has not changed.
“The courts are pretty clogged up with COVID and other things,” Doyle said Tuesday night. “It’s not going as quickly as we’d like it to go.”
“Mr. Doyle is, again, misrepresenting the facts in service of the City’s ongoing political agenda,” said Rahul Chandhok, the 49ers’ vice president of public affairs and strategic communications. “The September rent payment will be paid in full, in accordance with the terms of the Lease.
“While the 49ers work to support the region’s economy, Mayor Gillmor continues a pattern of mismanagement that is costing the city critical revenue, hurting small businesses, and endangering local jobs. This is just another attempt to scapegoat the 49ers for her incompetence, and her confusion on the terms of the Lease that she supported enthusiastically when it suited her political aspirations.
“Mayor Gillmor is spending millions on PR consultants, advisors, and providing raises, during a global pandemic, to the already highest paid City Manager in the state, all while knowing the city’s budget is in disarray and has been for years. Instead of scapegoating the 49ers, it is time for the Mayor to look inward.”
The city and team have been battling each other for years, with the most recent dispute surfacing in late July when city manager and stadium authority executive director Deanna Santana wrote a letter to the community claiming the 49ers have not complied with a voter-approved measure that prohibits taxpayer money from being spent on stadium authority maintenance and operating costs.
She wrote that the team owes the city $1.1 million for public safety services.
Santana also noted the 49ers in June demanded that the city pay $2,741,014 within four days to recover losses incurred in the 2019-20 fiscal year.
“The 49ers demanded these funds without providing any supporting records or detailed information that substantiated these losses.” she wrote.
The city did not pay, and the team’s demand was presented to the stadium authority board on July 14. The board agreed to table the matter until it could confirm the amount, according to Santana.
Doyle said Tuesday the matter remains unresolved.
Santana added in her letter that non-NFL fiscal year losses, which included events such as the Pac-12 football championship and Monster Jam truck show, occurred before the coronavirus pandemic led to shelter-in-place orders and exposed the 49ers’ practice of booking money-losing events.
She said the team had estimated the stadium authority would make about $18,000 in revenue by the end of last fiscal year.
The 49ers blasted Santana’s claims. In a statement to local media outlets at that time, they said Santana and Gillmor were “cherry-picking numbers entirely out of context and relying on fuzzy math.” The team says it generated $68 million in revenue for the stadium authority just in the past year alone.
The 49ers added that “any losses related to those events are due to Ms. Santana pushing excessive costs” onto the stadium authority and “creating enough dysfunction” to upset major concert performers.
Pop star Ed Sheeran canceled a Levi’s Stadium tour stop, scheduled for the summer of 2018, because of the city’s 10 p.m. midweek concert curfew.
And last year, Rolling Stones officials called out the city for over-regulation and micromanagement after the legendary band’s Levi’s Stadium show.
“The touring industry has made note of the difficulties and uncertainties presented by the City and eventually will just skip your market,” Michael Wozniak, the band’s security coordinator, wrote in a letter to Levi’s Stadium general manager Jim Mercurio.
The city pulled the plug on the concert’s pyrotechnic show at the last minute, requested the band’s structural engineer to travel to Santa Clara to inspect the stage and did not allow stadium catering to feed the performers, Rolling Stones officials said.
Santana blamed the 49ers, telling this news organization in an email last September that the team “brought issues very late to the city’s attention” and the city “has a responsibility to ensure that events comply with building and fire codes, which it did and, it is unfortunate that the Forty Niners and Promoters view this regulatory function as excessive or micromanaging.”