In 2010, when Santa Clara voters approved creating a city-run stadium authority to build an NFL stadium to attract the San Francisco 49ers, politicians patted themselves on the back for getting things done and luring a storied franchise 45 miles south to Silicon Valley. The relocation took place

The contrast with Oakland and its inability to come up with a stadium proposal that would keep the Raiders from eyeing other metro areas was clear. Leaders in the cash-strapped city were unable to prevent the Raiders from committing in 2017 to moving to Las Vegas and working with the Nevada state government on a financing plan that should yield a 65,000-seat stadium for the team to begin using in the 2020 season.

But now the narrative has taken a dramatic shift, and it’s Santa Clara leaders who are facing grief in their community over the 49ers’ arrival in town and the impact of the $1.27 billion Levi’s Stadium (pictured), named after the San Francisco company which paid for marketing rights.

What was billed as a win-win situation by team and local officials now looks far more complex. The initial honeymoon has long since given away to a fractious relationship.

The biggest annual strain is over how much the team must pay per season. A complex agreement set the 49ers’ rent and operating fees at $24.5 million for the 2017 season. The 2018 assessment was fought over for months before an arbitrator recently said the amount should be set at $24.762 million for the coming season, an increase of just over 1 percent.

The ruling contradicted the team’s analysis of baseline rent, stadium operating expenses, debt service and capital reserves. The 49ers argued their total payment should be as little as $16.775 million – a 32 percent cut. The city asked for as much as $25.862 million – a 6 percent increase.

“We want to work with 49ers, not against them,” Mayor Lisa M. Gillmor said in a statement released after the arbitration decision. “Hopefully the team understands that Santa Clara will always put community interests first.”

There have also been squabbles over the city’s 10 p.m. weeknight curfew for events at the stadium, which has the potential to cause headaches for the team, given the regular season games the NFL holds each week on Monday and Thursday nights, as well as the preseason games that are regularly scheduled on weeknights. Some residents respond by citing quality-of-life issues created by team-related traffic.

Personal-seat license fees needed for revenue model

Both the city and the team share concerns over attendance. While the 68,500-seat stadium regularly sells out on paper, Pro Football Talk and other popular NFL websites took to mocking the 49ers last fall after an October game in which the stadium seemed less than half full, pushing ancillary revenues down. An unexpected problem has been the intense heat seen at Levi’s Stadium for several preseason and regular season games.

A five-game winning streak to end the 2017 season raised hopes that attendance will improve going forward. But as Pro Football Talk pointed out, the team and city have reason to be deeply worried about renewals for personal seat licenses, the expensive way that fans can guarantee themselves top seats at games.

The license fees are crucial to the revenue model being used to pay off construction and related debt. Many once-successful teams have struggled to sell PSLs after their fortunes took a turn for the worse.

Meanwhile, the long-shot hope that the Raiders would continue to have a presence in Northern California after their 2020 move to Las Vegas has been dashed. Nevada media outlets recently reported that the team is likely to move its preseason training camp from its longtime base in Napa to Reno that summer.

Mendoza says California’s population and demographics have changed significantly since the formation of counties and by increasing the number of supervisors from five to seven, residents of California’s largest counties will get a more representative and responsive county government.

Cost of increasing government has always been an obstacle to changing the number of supervisors. Mendoza’s legislation tries to confront that issue by declaring that the cost of seven supervisors shall not exceed the cost of five supervisors at the time the measure takes effect after the 2020 census.

With California’s huge and diverse population, the suggestion that county representation be improved makes sense – but who should decide, state voters or local voters?

Los Angeles County, the largest county in the state, would be directly affected by this measure if it becomes law, along with the counties of Orange, San Diego, Riverside, San Bernardino and perhaps Santa Clara if it crosses the 2 million population threshold before the initiative takes effect.

In Los Angeles County, four times voters were asked to increase the size of the Board of Supervisors. Four times the voters said no.

In 1962, 1976, 1992 and 2000, Los Angeles County voters rejected increasing the board to either seven or nine members from the current five. In the most recent vote, the proposal was defeated by nearly a two to one margin.  Mendoza argues that a statewide measure is needed to prevent local county officials from defeating any local measure to expand the board. Indeed, the bill analysis for the Senate Committee on Elections and Constitutional Amendments argues that Los Angeles County Supervisors responded to a legislative attempt to expand the Board in 2000 with a cynical approach of the supervisors putting an expansion measure on the ballot with weak cost controls then working to defeat it. 

Be that as it may, the fact is that voters in the county have four times defeated an effort to change the number of supervisors. If Mendoza’s measure receives a two-thirds vote in the Legislature and appears on the ballot, all the voters in the state will have a say, not just the voters in the most populous counties. In fact, many voters who do not live in the affected counties will help to decide the issue. 

Under such circumstances, local self-determination could be lost to a state requirement.

With time running short on the availability of DHS grant money, and bipartisan support in the U.S. Congress for advancing new phone protections, critics accused Santa Clara County officials of haste and overreach.

Santa Clara County Sheriff Laurie Smith found herself at the center of the dispute, which revolves around her request to the county’s Board of Supervisors for a portable surveillance system commonly known as “Stingray” (pictured above).

According to Ars Technica, “The same company that exclusively manufacturers the Stingray — Florida-based Harris Corporation — has for years been selling government agencies an entire range of secretive mobile phone surveillance technologies from a catalogue that it conceals from the public on national security grounds.”

For the Silicon Valley situation, the San Francisco Chronicle explained, “The device is said to mimic a cell tower, allowing authorities to track cellphones and pinpoint their location.” Stingray equipment ran a tab of over $500,000 — costs that could be covered by Homeland Security grants acquired by the county two years ago.

Skepticism on the Board of Supervisors has contributed to cops’ sense of urgency. Supervisor Sen. Joe Simitian, a former state senator, told the Contra Costa Times he knew about the potential Stingray deal since December. “I’m a little disappointed if they’re trying to hurry this up because the grant is going to expire,” he said. “It would have been nice to have been told about this a year ago.”

Stingray technology is already used in Alameda County and the cities of San Jose and San Francisco, with agencies around the San Diego and Los Angeles areas also getting into the act. But Simitian has spoken out about the value of more internal deliberation and resident input, criticizing Santa Clara sheriffs for holding a single, brief public meeting on the matter.

Legal questions

Challenges to Santa Clara’s plans haven’t just focused on the technology itself. Although some federal legislators have recently reintroduced a bill designed to bring some constraints to how cellphones can be monitored, for now police departments have enjoyed wide latitude in choosing how to proceed.

In Congress, the Geolocation Privacy and Surveillance Act was recently rolled out by a bipartisan group including Sen. Ron Wyden, D-Ore., and Sen. Mark Kirk, R-Ill. Designed to protect individuals’ cellphones from excessive intrusion by law enforcement or others, the act would require a warrant from police before using technology like Stingray to track locations.

“GPS data can be a valuable tool for law enforcement,” said Wyden in a statement, “but our laws need to keep up with technology and set out exactly when and how the government can collect Americans’ electronic location data.”

Santa Clara sheriffs, meanwhile, have tried to frame their broader approach in reasonable terms. The sheriff’s office announced its intended use of stingray technology “triangulates on a mobile phone only, and does not monitor, eavesdrop, or intercept conversations or data such as texts,” Ars Technica reported.

According to the Chronicle, Sheriff Smith tried to emphasize the potential benefits to allowing her office to set limits on its own:

“Smith … said the device will be used only ‘to acquire criminal-activity data to aid in apprehension and prosecution,’ and not to ‘observe community members.’ She said the device could help her deputies — and officers from other nearby agencies — find missing people and victims of human trafficking.

“But the department has no finalized policy for using the technology, and officials do not plan to seek public approval of a policy when it is completed.”

Changing expectations

That put California’s longstanding privacy and civil liberty advocates up in arms. “Because Stingrays are capable of dragnet secretive surveillance, they raise serious privacy issues and necessitate robust oversight by citizens, elected leaders and the judiciary,” wrote Matt Cagle of the American Civil Liberties Union. “The ‘just trust us’ approach to surveillance doesn’t cut it, especially when the surveillance is close to home. Yet the public’s ability to learn about and debate surveillance technology should not depend on the good will of law enforcement agencies – it should be incorporated into our democratic processes.”

Pending legislation, however, expectations for change have been blunted by events at the federal level.

As the Wall Street Journal reported, for years the U.S. Department of Justice has been using Stingray technology in a once-secret airborne surveillance program.

Los Angeles Mayor Eric Garcetti Thursday said NFL football is “highly likely” to return to Los Angeles 20 years after the Raiders scampered back to Oakland and the Rams defected from Anaheim to St. Louis. He said the recent $2 billion sale of the Clippers NBA team showed how profitable a new team would be for the NFL, whose owners would split a franchise fee for a new team; or a relocation fee, such as if the Rams return.

But the Times reported:

Previous L.A. mayors have predicted the imminent return of the NFL to the city. Though many in the NFL are optimistic that the league will soon return to the nation’s second-largest TV market, some team owners are skeptical about how much the ball has moved during the last several years.

Garcetti also said the deal could be done without taxpayer subsidies. But the NFL has preferred such subsidies as a way to get a deep commitment from local politicians. For example, the shining, new, high-tech Levi’s Stadium in Santa Clara for the 49ers cost $1.31 billion, of which $114 million was from taxpayers.

That was an exception to the general resistance of California taxpayers in recent decades to stadium tax subsidies.

I suspect the NFL will punt on the new team until the next recession, when some of the owners’ other businesses have tanked and they’ll need some quick cash. There are 30 owners. So if the league intercepts a $3 billion franchise fee, each owner would get $100 million.

By contrast, in 1972, “Chicago industrialist Robert Irsay purchased the Rams for $19 million and then traded the franchise to Carroll Rosenbloom for his Baltimore Colts and cash.”

According to the CPI Inflation Calculator, $19 million in 1972 would be $108 million today, factoring inflation. So in 42 years, the value of an NFL team in L.A. has risen about 30-fold.

By Joseph Perkins

Elaine Alquist is not a member of the San Francisco 49ers’ Gold Rush gals, but the Santa Clara state senator is the NFL club’s biggest cheerleader.

With but a month left in the legislative session, Sen. Alquist, D-Santa Clara, has artfully crafted a measure that would gift the York family, which own the Niners, up to $30 million toward construction of the tricked-out new stadium they’ve always wanted.

So desperate is Alquist to please the Yorks, to presumably secure her place in the owner’s box during Niners home games, that she actually gutted a bill on teacher credentialing and amended it to free up local redevelopment dollars for the building project.

Alquist felt compelled to go to such extraordinary lengths after the Santa Clara County Board of Supervisors denied a request by the city of Santa Clara that the board turn over the $30 million or for the stadium’s construction.

A copy of Alquist’s bill, obtained by the Los Angeles Times, states that the board’s denial created “unique circumstances” — namely, that the York family wouldn’t get the taxpayer subsidy they were expecting to build their new stadium — and, therefore, “this special statute is necessary.”

If the Legislature passes Alquist’s special statute, it will hardly be the first time state lawmakers have bent over backwards to facilitate construction of a new stadium for a privately-owned sports franchise.

Just last year, in fact, the Legislature approved a special statute for a proposed stadium in downtown Los Angeles that granted a waiver from certain environmental laws. And in 2009, state lawmakers approved a special bill for a proposed stadium in the city ofIndustrythat waived environmental mandates.

The argument for the custom legislation clearing the way for the stadium projects in downtown L.A., City of Industry and, now, Santa Clara is that they will foment economic growth and stimulate job creation in the respective cities.

UBS study

But a growing body of evidence suggests that argument is a canard. Indeed, a recent report by UBS finds that “new stadiums and arenas have no measurable effect on the level of real income or employment in the metropolitan areas in which they are located.”

Sure, a new stadium in Santa Clara (or downtown L.A. or City of Industry) will attract sports fans. But, says the UBS report, “Individuals generally maintain a consistent level of entertainment spending, so money spent on sporting events typically comes at the expense of cash spent in restaurants, on travel, and at movie theaters.”

Defenders of publicly-funded sports facilities suggest that it is impossible to retain or attract a professional sports franchise without taxpayer handouts. But that is simply is untrue.

The San Francisco Giants built their $357 million ballpark in 2000 with no public funds. And the owner of the Golden State Warriors is moving the NBA franchise to San Francisco and building a new arena out of his own pocket.

That’s not to say that Alquist and her colleagues in Sacramento should do absolutely nothing to assist owners of professional sports franchises build new stadiums or arenas.

It’s perfectly acceptable for the state to relax onerous environmental and labor regulations that substantially increase construction costs for sports facilities. But it’s fiscally irresponsible to provide taxpayer subsidies to pay for those privately-owned facilities.