Santa Clara Considers Settlement Offer from 49ers in Levi’s Stadium Dispute

The Santa Clara City Council on Tuesday postponed a decision whether to accept an offer from the San Francisco 49ers to settle its multiple lawsuits against the city and its stadium authority over management of Levi’s Stadium in Santa Clara..

A spokesman for the 49ers said it is negotiating with the city over the NFL team’s offer that would pay $3.3 million to the city’s general fund, plus paying $650,000 to the Santa Clara Stadium Authority and forgiving $350,000 in interest payments the authority owes the team.  Settlement of the lawsuits could spare the authority an additional $8.35 million in legal fees in a protracted dispute, the 49ers claim.

A solid 5-2 majority of the council this week appeared to favor the settlement, and Mayor Lisa Gillmor warned this week the council majority “continue(s) to side with the team over the financial interests of Santa Clara residents.”

Councilmember Kathy Watanabe told the San Francisco Chronicle she was opposed to the settlement offer, which former city attorney Brian Doyle warned was a “sweetheart deal” for the 49ers, as the team and city continue to wrestle over management of Levi’s Stadium and control over the millions in revenue it generates.

“We’re currently in discussions with city staff on a settlement that would inject millions directly into the general fund and avoid millions in future legal fees,” 49ers spokesman Rahul Chandhok said in a statement Tuesday. “Mayor Gillmor has a track record of wasting taxpayer dollars on failed litigation, like her $6 million fight against voting rights and driving the city into a $27 million deficit.”

“Prolonged legal fights only benefit the lawyers, and we hope the city will take this significant step to restore this partnership and focus on generating revenue from the stadium,” Chandhok said. “For Mayor Gillmor and her allies to say otherwise is just another attempt to trump up a conspiracy to cover up her own fiscal recklessness.”

San Jose Inside reached out to Gillmor this morning for comment, but she did not respond.

The stadium authority and the 49ers have each spent approximately $8 million on lawyers, consultants and staff over the past four years, according to Chandhok, who said the team’s dispute with Santa Clara stems from the city’s “politically motivated desire to terminate the 49ers management of the stadium.”

In a statement, he said that the 49ers and the stadium authority have recently “taken a measured approach to resolving many of their disputes, which has led to more efficient and transparent operation of the stadium,” including increased transparency over stadium accounting, strengthened procurement procedures, the return of profitable concerts and timely payment of the authority’s portion of stadium staff costs.

The 49ers are optimistic that approval of the settlement would finally end the dispute over management of Levi’s Stadium and allow the city’s stadium authority and the 49ers to return to a more amicable relationship.

Three decades of journalism experience, as a writer and editor with Gannett, Knight-Ridder and Lee newspapers, as a business journal editor and publisher and as a weekly newspaper editor in Scotts Valley and Gilroy; with Weeklys Publishing since 2017. Recipient of several first-place writing and editing awards, California News Publishers Association.

2 Comments

  1. Oh how quickly local “journalists” forget how to investigate or to report. Perhaps you’ll remember this 2018 episode in which the City “Santa Clara $180 Million Victory over 49ers in Levi’s Stadium Rent Dispute & Mayor Seeks Prompt Payment and Full Transparency”? No? Might this have something to do with the 49ers pushing every not-great-“news”-source to echo its line that settling for 3.3 million is somehow a great accomplishment? It seems that the City was doing well for itself by itself, without settling. Maybe the 49ers realize that the City might continue to win in court? And you guys call yourselves “reporters”. Really just change your job titles to “I write whatever I’m told because that’s my real job.” Or “I’m a professional echo device, not a real reporter.”

    (https://www.santaclaraca.gov/Home/ShowDocument?id=58935)

  2. The significance of this development is as follows: While no settlement between the 49ers and the City has been formally announced, what is at stake here are: 1) who will manage the non-NFL stadium operations going forward (the City in 2019 sought the termination of the management agreement with the 49ers with regard only to non-NFL activities, not the management agreement in its entirety) and; 2) potentially tens of millions of dollars in revenue losses to the City-owned Stadium Authority that will instead accrue to the 49ers in the form of cost savings or additional earnings. (The San Francisco Chronicle has more fully captured the nature of this potential “sweetheart deal” as constructed by the City council majority that has taken power over the past two election cycles with the assistance of an unprecedented intervention on the part of the 49ers led by Jed York (https://www.msn.com/en-us/sports/nfl/49ers-offer-santa-clara-sweetheart-deal-to-resolve-levi-s-stadium-management-fight/ar-AA10uyrL.)

    If a deal with these conditions is eventually agreed, the City will suffer significant losses of past, current and future revenues, improperly taken by the 49ers. That would be many multiples of any legal costs that the City is incurring in defending its interests. (The link to the document provided by Cynical for a Reason (above) is indicative of what kind of sums are potentially at stake.) 49er spokesperson Chandhok’s concern with City’s deficit and its legal costs are talking points designed to deflect attention from what is really at stake here and to force a sweetheart deal in favor of the 49ers. Evidence suggests that Councilmembers Chandhal, Hardy, Jain and Park will be willing accomplices in this poison pill solution (https://sanjosespotlight.com/santa-clara-hires-temporary-interim-city-manager-rajeev-batra/#comment-90650). Santa Clara residents beware.

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