SCSA
Santa Clara Stadium Authority
SANTA CLARA
STADIUM AUTHORITY
FINANCIAL STATUS REPORT
Quarter Ending September 30, 2021
March 15, 2022
1 Table of Contents
Introduction .................................................................................................................................................. 2 NFL Events .................................................................................................................................................. 3 Non-NFL Events ......................................................................................................................................... 6 Discretionary Fund ..................................................................................................................................... 8 Stadium Builder Licenses ......................................................................................................................... 8 Santa Clara Stadium Authority Budget Status Reports ...................................................................... 10 Operating Budget ................................................................................................................................. 10 Debt Service Budget ............................................................................................................................ 13 Capital Improvement Project Budget ................................................................................................ 17 City of Santa Clara Net General Fund Impact ..................................................................................... 19 Public Safety and Administrative Cost Reimbursement ................................................................. 19 Rents and Senior and Youth Fee ...................................................................................................... 19 Other Revenue Impacts ...................................................................................................................... 19 Glossary ..................................................................................................................................................... 21
2 Introduction
This Santa Clara Stadium Au thority (“Stadium Authority ”) Financial Status Report provides information covering the second quar ter of the Stadium Authority’s 2021/22 fiscal year (FY) which ended on September 30, 2021. Comparative data from prior fiscal years is also included.
In addition to these quarterl y reports, the Stadium Authorit y produces annual financial statements. The FY 2020/21 financial statements were audited by an external audit firm and presented to the Stadium Authority’s Audit Committee on September 16, 2021 and the Stadium Authority Board (“Board”) on September 28, 2021. Once presented to the Stadium Authority Board, the financial statements are published on the Stadium Authority’s website.
The Stadium Authority also pr epares a detailed b udget prior to the beginning of each fiscal year. The FY 2021/22 budget was considered at a study session on March 9, 2021 and adopted by the Board on March 23, 2021.
Stadium Authority finances are structured so that the City of Santa Clara (City) is not liable for the debts or obligations of the Stadium Authority. All serv ices provided by the City, including administrative and public safety , to the Forty Niners Stadium Management Company, LLC (“ManagementCo”) or the Stadium Authority are fully reimbursed with Stadium Authority funds.
Methodology
Information provided in this report was based in part on documentation submitted by ManagementCo. Specifically, NFL and Non-NFL event statistics and financial information relating to Stadium Manager expenses ar e provided by ManagementCo. Stadium Authority staff is limited to a review of selected financial information submitted by ManagementCo, including some source documentation for Non-NFL events with attendance greater than 25,000, submitted 45 days after each event. More detailed documents are received over 90 days after the close of the fiscal year. For all other financial information, a full detailed review and/or audit of source documentation has not been completed by the Stadium Authority for this report.
The Stadium Authority has cont racted with JS Held (formerl y Hagen, Streiff, Newton, & Oshiro), a forensic accounting firm, to review and evaluate Non-NFL event financial information from prior years, including source documentation. This report was discussed with the Board at the December 1, 2020 Stadium Authority Board meeting. The Stadium Authority is working with JS Held for the review of additional historical years.
The information provided reflects the best known and available at the time of the writing of this report and is subject to further re vision when the full body of records becomes available and review is complete. Consequent ly, the Board’s notation and filing of this report should not be considered an approval of the accuracy of the information in the report.
3 NFL Events
This section provides year to date and comparative data for NFL games categorized as pre-season and regular season games. In fiscal year 2020-21, there were no fans present for the NFL games. The comparative data is based on the quarter ended September 30, 2019.
The San Francisco Forty-Niner s (“49ers”) played a total of three NFL games (two pre- season games and one regular season game) at Levi’s Stadium as of September 30, 2021. There was a total of 199,451 tickets sold to these NFL games, an average of 66,484 per game. This is up by 4,894 or 7.9% when compared to the same period in fiscal year 2019-20. The ticket sales resulted in $2.7 m illion in NFL ticket surcharge revenue (10% of ticket sales) to the Stadium Authority. The average NFL ticket surcharge revenue was $883,800 per game in the current year which is up by $78,338 or 9.7% from the same period in the fiscal year 2019-20 . This increase can be attr ibuted to dynamically priced tickets to each NFL game and COVID-19 economic recovery. A total of $69,807 of Senior and Youth Program Fees, which is based on $0. 35 per NFL ticket sold, were collected through the end of the second quarter of the fi scal year. These fees were transferred to the City’s General Fund in support of such programs.
A total of 21,678 cars were parked in the permitted offsite parking lots generating $128,117 in offsite parking fees . The Tasman lot parking fee generated $5,900 for the General Fund in the current fiscal year. The overall number of cars parked in the permitted offsite lots and the Tasman lots rose by an average of 1,598 cars per game or 26.5% when compared to the fiscal year 2019-20.
There was $1.7 million of NFL event public safety cost s in the current reporting period which is an average of $582,352 per game. This is up from the fiscal year 2019-20 average of $385,879. Of the $1.7 m illion NFL event public safety costs, $1.1 million or
63.3% are direct City costs and $641,534 or 36.7% are out side agency costs. $128,117 of the total NFL event public safety costs were covered by the offsit e parking fees that were collected and the remaining was invoiced to ManagementCo. It should be noted that costs differ dependent on deployment needs for each event.
Statistics for the NFL games held at Levi’s Stadium in the first two quarters of the 2021/22 fiscal year are shown in Table 1 and comparative data from all eight years of operations can be found in Table 2.
4 Table 1
Levi's® Stadium
2021/22 NFL Event Statistics
As of September 30, 2021
Game 1 vs Game 2 vs Game 3 vs
Chiefs Raiders Packers 2021/22
08/14/21 08/29/21 09/26/21 YTO Total
No. ofTickets Sold 63,172
NFL Ticket Surcharge
SeniorMouth Program Fees
$ 498,759 $
$ 22,110 $
Cars Parked at Offsite Lots 5,340
City Offsite Parking Fee $ 31,559 $
Cars Parked on Tasman Lots 364
City Tasman Lot Parking Fee $ 1,820 $
Stadium Public Safety Costs $ 524,627 $
$
68,258 68,021 199,451
551,632 $ 1,601,010 $ 2,651,401
23,890 $ 23,807 $ 69,807
8,145 8,193 21,678
48,137 $ 48,421 $ 128,117
416 400 1,180
2,080 $ 2,000 $ 5,900
768,283 $ 454,145 $ 1,747,055
$ $ Less: Offsite Parking Fee Credit $ --~~~--~~----'-,1---(31,559) (48,137) (48,421) (128,117) $ $ $ Reimbursable Stadium Public Safety Costs $ 1----~----~----,1---493,068 720,146 405,724 1,618,938 Amount Reimbursed $ $ $ $ 1------1----------,1----------,>-------1 5 2014/15 Q2 2015/16 Q2 2016/17 Q2 2017/18 Q2 2018/19 Q2 2019/20 Q2 2020/21 Q2 2021/22 Q2 Total Total Total Total Total Total Total Total
No. of NFL Events 4 3 3 4 3 3 - 3 No. of Tickets Sold 271,503 198,634 188,705 249,408 190,840 184,769 - 199,451 NFL Ticket Surcharge 2,911,416 $ 1,851,550 $ 2,343,474 $ 2,544,721 $ 1,732,335 $ 2,416,387 $ - $ 2,651,401$ Senior/Youth Program Fees 95,026 $ 69,522 $ 66,047 $ 87,293 $ 66,794 $ 64,669 $ - $ 69,807$ Cars Parked at Offsite Lots 37,884 16,986 18,295 21,442 15,030 16,578 - 21,678 City Offsite Parking Fee 186,389 $ 86,289 $ 95,866 $ 116,216$ 84,619 $ 96,981 $ - $ 128,117$ Cars Parked on Tasman Lots 1,737 1,967 1,689 2,357 1,244 1,485 - 1,180 Cars Parked on Golf Course 11,378 7,353 - - - - - - City Tasman Lot and Golf Course Parking Fee 65,575$ 46,600 $ 8,445 $ 11,785$ 6,220 $ 7,425 $ - $ 5,900$ Stadium Public Safety Costs 914,005 $ 673,723 $ 740,565 $ 975,574 $ 764,421 $ 1,157,636$ - $ 1,747,055$ Golf Course Public Safety Costs 111,690 $ 25,242 $ - $ - $ - $ - $ - $ (128,117)$ Subtotal Event Public Safety Costs 1,025,695 $ 698,965 $ 740,565 $ 975,574 $ 764,421 $ 1,157,636$ - $ 1,618,938$ Less: Offsite Parking Fee Credit (186,389) $ (86,289) $ (95,866) $ (116,216)$ (84,619) $ (96,981) $ - $ (128,117)$ Reimbursable Stadium Public Safety Costs 839,306$ 612,676 $ 644,700 $ 859,359 $ 679,802 $ 1,060,654$ - $ 1,490,821$ Total Amount Reimbursed 839,306 $ 612,676 $ 644,700 $ 859,359 $ 679,802 $ 741,395 $ - $ - $ Table 2
Levi's® Stadium
Historical NFL Event Statistics
6 Non-NFL Events
This section provides annual and comparative data for No n-NFL Events categorized as events ranging from high school and college football games , international soccer matches, concerts, wedding fairs, and specia l events. There were no Non-NFL events due to the pandemic, and only sma ller, non-ticketed events are held in fiscal year 2021-
22. Comparative data from all eight years of operations for the Non-NFL ticketed events and special events are shown in Table 3.
7 2014/15 Q2 2015/16 Q2 2016/17 Q2 2017/18 Q2 2018/19 Q2 2019/20 Q2 2020/21 Q2 2021/222
Q2
Total Total Total Total Total Total Total Total
No. of Non-NFL Ticketed Events 2 13 14 7 7 6 - - No. of Tickets Sold 106,699 542,390 518,542 210,157 231,849 125,587 - - Non-NFL Ticket Surcharge 426,796$ 2,130,628$ 2,074,168 $ 840,628 $ 927,396 $ 502,348 $ - $ - $ No. of Non-NFL Special Events 43 100 53 42 41 28 - - Non-NFL Special Event Attendees 12,521 73,196 17,959 23,726 15,943 7,752 - - Cars Parked at Offsite Lots 10,748 51,669 55,731 19,466 22,338 13,130 - - City Offsite Parking Fee 52,880 $ 258,252 $ 286,531 $ 104,077 $ 123,559 $ 75,164 $ - $ - $ Cars Parked on Golf Course 5,413 19,743 9,562 - - - - - City Golf Course Parking Fee 27,065$ 98,715 $ 47,810 $ - $ - $ - $ - $ - $ Stadium Public Safety Costs 444,151$ 2,624,988$ 2,469,148 $ 1,035,289 $ 1,378,966 $ 1,004,000 $ - $ - $ Golf Course Public Safety Costs 55,701$ 113,440 $ 39,905 $ - $ - $ - $ - $ - $ Subtotal Event Public Safety Costs 499,852$ 2,738,429$ 2,509,053 $ 1,035,289 $ 1,378,966 $ 1,004,000 $ - $ - $ Less: Offsite Parking Fee Credit (52,880)$ (258,252)$ (286,531) $ (104,077) $ (123,559) $ (75,164) $ - $ - $ Reimbursable Public Safety Cost s 446,972$ 2,480,177$ 2,222,522 $ 931,212 $ 1,255,407$ 928,836 $ - $ - $ Amount Reimbursed 446,972 $ 2,480,177$ 2,222,522 $ 931,212 $ 1,255,407$ 791,025 $ - $ - $ (1) Includes Non-NFL special events.
Table 3
Levi's® Stadium
Historical Non-NFL Event Statistics(1)
8 Discretionary Fund
The Discretionary Fund is funded by rev enue equal to 50% of the Non-NFL Ticket Surcharge of $4 per ticket. Table 4 shows the revenues and expenses in the Discretionary Fund since FY2014/15. The balance at the end of this reporting period was $2.3 million.
Fiscal Year
Beginning
Balance Revenue Expenses
Ending
Balance
2014/15 - $ 715,770$ 714,028 $ 1,742 $ 2015/16 1,742 1,238,542 699,129 541,155 2016/17 541,155 1,164,698 1,209,342 496,511 2017/18 496,511 768,564 - 1,265,075 2018/19 1,265,075 796,294 101,267 1,960,102 2019/20 1,960,102 367,748 - 2,327,850 2020/21 2,327,850 - 18 2,327,832 2021/22 2,327,832 - - 2,327,832 Table 4
Discretionary Fund - Accrual Basis
Stadium Builder Licenses
The total principal value of currently active Stadium Bu ilder Licenses (“SBLs”) is $535.5 million and, as of September 30, 2021, 90% of the total principal value of all SBLs sold (i.e., $483.3 million) had been collected.
SBL holders that finance their purchase pay an annual interest rate of 8.5% and payments are due by March 1
st each year. The majority of SBL holders make their payments on time. For those that do not pay on time, SBL service staff, working for ManagementCo on the Stadium Authority’s behalf, contact the SBL holders and attempt to collect the full amounts owed. Ultimately, an SBL can be def aulted for non-payment. Once an SBL is defaulted, the SBL holder in default loses their right to buy season tickets as well as their priority rights to tickets to Non-NFL Events, and forfeits any money they had invested in the SBL. Defaulted SBLs are then available for resale.
There is a total of 61,358 currently active SBLs, or 93% of the 66,066 total sellable SBL seats. This is an increase of 990 from the total active SBLs at the end of the prior fiscal year (March 31, 2021). The main reasons for the increase are due to sale of new SBLs offset by the customer seat relocation program and default buy back. The customer seat relocation program allows customers to trade in their SBLs in return for others in a different location as long as the total face va lue of the new seats is equal to or greater than the original seats.
During the current reporting peri od, 1,427 SBLs were sold for a total face value of $9.7 million. The customer seat relo cation program resulted in an increase of $1.7 million to the SBL face value, and the number of SBLs for this category increased by 13. The reason for this is due to a relocation to a higher SBL Tier. Additional details regarding currently active SBLs are noted in Table 5.
9 Table 5
Santa Clara Stadium Authority
Currently Active Stadium Builder License (SBL) Summary (1l Throu9h Seetember 30, 2021
SBL Seats SBL Seats Sold New SBL Net SBL SBL Other SBL Seats SBL Value SBL Collected % SBL Principal Seat Va lue Ava ilable as of 3/31/21 Sales Relocations Defau lts Sold Collected 141,392 100 100 100 $ 14,082,625 $ 12,588,226 89-4%
80,000 942 925 9 4 (14) 924 $ 73,920,000 $ 69,541,210 94.1% 40,000 2 2 2 $ 80,000 $ 70,040 87.6%
30,000 4,945 4,463 93 24 (38) 4,542 $ 136,260 ,000 $ 125,729 ,904 92.3% 20,000 3,475 2,852 43 11 (31 ) 2,875 $ 57,500,000 $ 52,524,020 91 .3% 15,000 7 7 7 $ 105,000 $ 90,583 86.3%
12,000 2,162 2,166 19 3 (29) 2,159 $ 25 ,908,000 $ 23 ,276 ,005 89.8% 10,000 7 7 7 $ 70,000 $ 66,002 94.3%
6,000 20 ,652 20,547 258 87 (133) 20,759 $ 124,554,000 $ 109,015,641 87.5% 5,000 14,306 13,302 512 30 (117) 13,728 $ 68,640,000 $ 59,600,859 86.8% 4,000 916 920 2 (3) 919 $ 3,676,000 $ 3,474 ,068 94.5%
3,000 91 91 91 $ 273 ,000 $ 239,759 87.8%
2,500 41 44 44 $ 110,000 $ 98,962 90.0%
2,000 18,387 14,907 493 (146) (85) 15,169 $ 30,338,000 $ 27 ,000,906 89.0% 1,000 33 35 (2) (1) 32 $ 32,000 $ 29,004 90.6%
Total 66,066 60,368 1,427 13 (451) 61,358 $ 535,548,625 $ 483,345,189 90.3% Plus: Interest on finan ced SBLs 60,335,209
Tota l Princi pal & Inte rest 543,680,398
10 Santa Clara Stadium Authority Budget Status Reports
Operating Budget
With 50% of the fiscal year complete, total operating revenues thru the second quarter of the 2021/22 Fiscal Year were $ 30.9 million representing 48% of the overall budget for revenues. Stadium rent earned from StadCo totaled $12.9 million or 52% of budget.
During the current reporting period, the Stadium Authority collected $11.6 million in SBL proceeds or 49% of budget. All SBL proceeds are to be transferred to the debt service fund per applicable loan agreem ents. The Stadium Authority also collected NFL ticket surcharges, Sponsorship Revenue, Naming Rights revenue, and Senior & Youth Program Fees all of which are expected to meet budget this fiscal year. The Naming Rights revenue is collected twice a year, in Octo ber and February, and will be included in the Quarter 3 report.
Total operating expenses were $21.3 million, or 33% of the annual budget, which included the debt service transfers of $13.7 million. Other expenditures to note include shared stadium manager expenses. In the prior fiscal year, operating expense payments, except for insurance, were withheld based on Boar d direction for the partial suspension of payments at the March 27, 2019 Stadium Authority Board meeting, based on the concern that public funds would be used to pay for expenses that were not legally procured, or compliant with prevailing wage la ws or self-dealing/conflicts of interests laws. At that meeting, the Board directed the Executive Director to onl y release public funds to ManagementCo for the payment of shared stadium manager expenses when supporting documents have been submitted to show those expenses adhere to our agreements and State and local laws. Separate from that par tial suspension of pay ments, the Stadium Authority continued to pay fo r utilities, insurance, nam ing rights commission and costs associated with SBL sales and services.
For the current fiscal year, the Stadium Authority’s FY2021/22 budget was adopted on March 23, 2021 and included the Stadium Manager’s recommended Shared Expense budget of $8.1 million in a Legal Contingency line item. The expenses that were included in the Legal Contingency lin e are Stadium Operations, E ngineering, Guest Services, Groundskeeping, Security and the Stadium M anagement Fee. However, the Executive Director was delegated authority to approve budget amendments of $4.2 million to move funds from the Legal Contingency line item to Shared Expenses after the review of adequate documentations for costs based on B oard direction. Subsequent to that direction, Stadium Authority staff met at Levi’s Stadium on March 30, 2021 to review documentation for shared expenses. After follow-up meetings with the Stadium Manager, payments related to compensation that were reviewed and approved for monthly payment, totaling $4.2 million for the fiscal year.
Shared Stadium Manager expenses were at 55% of the budget, or $4.0 million of the $7.3 million budgeted amount and SBL Sales & Service expenses were 37% of the budget, or $1.3 million of the $3.4 million budgeted amount.
Stadium Authority G&A costs were at
25% of the budget, or $1.3 million of the $5.1 million budgeted amount.
11 The Stadium Authority pays for all utility costs from February 1st through July 31st and the tenant (StadCo) pays for utility costs from August 1 st through January 31 st (Tenant Season). However, based on conversation at Stadium Manager-Stadium Authority Quarterly meeting, it was st ated that the Utilities invoiced amounts were based on the budget, which did not factor utility costs to operate the vaccination site into consideration.
Because the vaccination site is treated as an NFL sponsored event, these costs are not borne by the Stadium Authority based on the terms of the Stadium Lease Agreement. As the vaccination site was expected to operate for four to six months, the Stadium Authority requested that the portion estimated to be associated with the vaccination operations be credited back based on histor ical usage and per the leas e requirements regarding expenses for NFL sponsored events. The Lev i’s Stadium vaccination site was open for more than four months starting in February 2021 and closing in June 2021. No additional information was provided by the Stadium M anager and the Stadium Authority continues to pay half of the invoiced amount until documentation showing a credit for the vaccination site utility usage is produced. Utility costs are 31% of the budget for the year, or $495,500.
The current budget includes an additional $250,000 in the Transfers Ou t line item for a Board approved electrical maintenance and r epair services related to Levi’s Signage Repairs project. It also includes an estima ted $600,000 loss projected by the Stadium Manager for Non-NFL Events. The Stadium Manager invoiced the Stadium Authority $300,000 in estimated Non-NFL Events Expenses in the first quarter. The invoice is premature, and the Stadium Manager did not provide adequate supporting documentation for the estimated expenses so the Stadium Au thority withheld payments to this expense item as of the end of this quarter.
As of the end of second qua rter of FY 2021/22, the Stadium Manager issued approximately $3.5 million in Notices of Default to the Stadium Authority for the unpaid Non-Compensation Shared Stadium Manager expenses, SBL Sales & Service expenses, Utilities, Non-NFL Event ex penses and other G&A expense. The Notices of Default carries a 12% interest rate. The Stadium Manager invoiced a total of $59,900 in interests ($7,259 in first quarter and $52,650 in second quarter) for the outstanding Notices of Default at the end of September 30, 2021. These claims are currently in litigation.
Additional details are shown in Table 6.
12 Table 6
Santa Clara Stadium Authority
Operating Budget Status Report
For the Period Ending September 30, 2021 and 2020
Period Ending September 30, 2021 11 Period Ending September 30, 2020 Budget to Budget to
Final Q1 Q2 YID Actual Final YID Actual
Budget Actuals Actuals Actuals Difference % Received Budget Actuals Difference % Received Resources
Revenues
NFL Ticket Surcha rge $ 8,665 ,000 $ $ 2,651,40 1 $ 2,651 ,401 $ 6,013,599 31% $ 8,665 ,000 $ $ 8,665 ,000 0% SBL Proceed s 23,682 ,000 11,577,075 1 1,577,075 12,104,925 49% 24,213,000 7,182,413 17,030 ,587 30% Interest 56,000 4,659 4,934 9,593 46,407 17% 896,000 24,418 ,871 ,582 3% Non-NFL Event Revenue NA NA
Net Revenues from Non-NFL Events NA 1,500,000 1,500,000 0% Naming Rights 7,165,000 3,529,738 3,529,738 3,635 ,262 49% 6,957 ,000 3,426 ,930 3,530,070 49% Sponsorship Revenue (STR) 325,000 81,250 81 ,250 162,500 162 ,500 50% 392 ,000 162,500 .229,500 41% Rent 24,762,000 6,741,100 6,190,500 12,931 ,600 11,830,400 52% 24,762 ,000 12,381 ,000 12,381 ,000 50% Senior & Youth Program Fees 232 ,000 69,808 69,808 162,192 30% 230 ,000 230 ,000 0% Non-NFL Event Ticket Surcharge 150,000 150,000 0% 572 ,000 572,000 0% Bay Area Host Committee Reimbursement NA 727 (727) NA
Other Revenue NA NA
Revenues Subtotal $ 65,037,000 $ 6,827,009 $ 24,104,706 $ 30,931,715 $ 34,105,285 48% $ 68,187,000 $ 23,177,987 $ 45,•009,013 3 4% Total Resou rces $ 65,037,000 $ 6,827,009 $ 24,104,706 $ 30,931,715 $ 34,105,285 48% $ 68,187,000 $ 23,177,987 $ 45/009,013 34% Budget to Budget to
Final Q1 Q2 YID Actual Final YID Actual
Budget Actuals Actuals Actuals Difference % Used Budget Actuals Difference % Used Expenses
Shared Stadium Manager Expenses
Stadium Operations $ 1,681,393 $ 386,890 $ 640,618 $ 1,027 ,508 $ 653 ,885 61% $ $ $ NA Engineering 1,543,240 314,610 546,060 860,670 682 ,570 56% NA Guest Services 304 ,134 49,445 85,820 135,265 168,869 44% NA Groundskeeping 93,809 19,125 33,200 52,325 41 ,484 56% NA Secu rity 378,652 77,190 133,980 211,170 167 ,482 56% NA Procu rement 311,412 51 ,902 51,902 259 ,510 17% NA
Insurance 3,136,000 784,045 894 ,044 1,678 ,089 1,457 ,911 54% 3,045 ,000 1,522 ,500 1,522,500 50% Stadium Management Fee NA NA
Shared Stadium Mngr E xps Subtotal $ 7,448 ,640 $ 1,631,305 $ 2,385,624 $ 4,016,929 $ 3,431,711 54% $ 3,045,000 $ 1,522,500 $ 1,522 ,500 50% Other Expenses
SBL Sales and Service $ 3,448 ,000 $ 540,000 $ 720,000 $ 1,260 ,000 $ 2,188,000 37% $ 3,610,000 $ 808,000 $ 2,802,000 22% Senior & Youth Fees (paid to City) 232 ,000 93,264 93,264 138,736 40% 230 ,000 230 ,000 0% Non-NFL Event Expense 600 ,000 600,000 0% NA
Ground Rent (paid to City) 425 ,000 425 ,000 425 ,000 100% 390,000 390,000 100% Performance Rent (paid to City) NA 555,000 555,000 0%
Disc retionary Fund Expense 250 ,000 250,000 0% 250 ,000 .250,000 0% Utilities 1,586,000 370,500 125,000 495 ,500 1,090,500 31% 1,597 ,000 1,064 ,000 533,000 67% Use of StadCo Tenant Improvements 26,000 26,000 0% 73,000 73,000 0% Stadium Autho rity G&A 5,115,000 580,570 681 ,992 1,262 ,562 3,852 ,438 25% 4,581 ,000 1,160,448 3 ,420,552 25% Naming Rights Commission 88,000 44,122 44,122 43,878 50% 30,000 30,000 0% Legal Contingency 3,810 ,360 3,810,360 0% 9,231 ,000 9,.231,000 0% Other Expenses 388,000 1,353 1,353 386,647 0% 1,400 ,000 193,000 1,.207,000 14% College Football Playoff Expense NA 727 (727) NA
Transfe rs Out 41,512,000 13,716,691 13,716,691 27,795 ,309 33% 42,847 ,000 33,652 ,952 9,194,048 79% Contribution to Operating Reserve NA 348,000 348,000 0% Other Expenses Subtotal $ 57,480,360 $ 1,535,192 $ 15,763,300 $ 17,298,492 $ 40,181,868 30% $ 65,142,000 $ 37,269,126 $ 27,,872,87 4 57% Total Expenses $ 64,929,000 $ 3,166,497 $ 18,148,924 $ 21,315,421 $ 43,613,579 33% $ 68,187,000 $ 38,791,626 $ 29,395,374 57% Operat ing Reserve $ 9,693 ,657 $ 11,940 ,523 $ 11,593,270 $ 11,592 ,741 Discretionary Fund $ 2,327,832 $ 2,327 ,850 $ 2,302 ,075 $ 2,327 ,850 13 12
13 Debt Service Budget
The Stadium Authority’s FY
2021/22 debt service revenue budget of $483,000 represents anticipated contributions from the Community Facilities Distr ict (CFD). The CFD levies and collects a special hotel tax on hotel room s within the CFD. All collections from the special CFD hotel taxes are contributed to Stadium Authority to pay down the CFD advance. The CFD Advance is payable solely from amounts actually received by the Stadium Authority from the CF D. During the first two quarters of the current fiscal year, $415,935 was contributed by the CFD. Transfers in from operating fund amounted to $13.7 million or 37% of budget.
Total Stadium Authority debt service expenses for the cu rrent reporting period were $21.3 million, 56% of the budgeted amount. The debt service expenses for the CFD Advance, the Term A Loan, and the StadCo Subordinated Loan were $847,573, $19.8 million, and $636,142, respectively.
On April 1, 2020, the Stadium Authority completed the Trust Excess Cash Flow funding instructions for fiscal year 2019-20 and provided it to FinanceCo and StadCo to complete the year end Trust Excess Cash Flow funding distribution per the Deposit and Disbursement Agreement. The Trust Excess Cash Flow instruction specifically excluded payments to the Revolving Loan of $6,300, 653 because the Stadium Authority did not recognize this as an expense due to t he fact that Managem entCo had improperly withdrawn funds under the Revo lving Loan without authorizati on and in violation of the Revolving Loan terms. StadCo did not follow the funding instructions and took the Excess Revenues from the distribution to pay off the Management Com pany Revolving Loan instead of leaving the monies in the trust bank account. The Stadium Authority was informed of this diversion in a letter dated April 27, 2020. On May 18, 2020, the Stadium Authority notified StadCo and the Trust that the diversion is in direct contravention of the Stadium Authority's instructions to the Trustee with regards to the use of Excess Revenue. Subsequently, the Stadium Authority has record ed a receivable from StadCo for $6,300,653 for the portion dive rted from the funding instruct ion. These claims are currently in litigation.
On March 31, 2021, the Stadium Authority completed the Trust Excess Cash Flow funding instructions for fiscal year 2020-21 and provided it to FinanceCo and StadCo to complete the year end Trust Excess Cash Flow funding distribution per the Deposit and Disbursement Agreement. The instruction requested for the Trust to pay the $5,796,711 minimum debt service amount due for the S ubordinate Loan. StadCo did not follow the funding instructions and took $2,167,689 from the distribution to pay off the Management Company Revolving Loan instead of paying down the Subordinated Loan debt service amount that the Stadium Authority instructed StadCo to pay. The Stadium Authority was informed of this diversion in a letter dated May 18, 2021. StadCo noted that the minimum debt service amount due wa s $3,629,022 because the loan amortization schedule was reset after a loan adjustment in March 2017. However, the Stadium Authority Board did not formally approve this revised loan amortization schedule. Subsequently, because we 14 dispute this diversion, the Stadium Authorit y has recorded a receivable from StadCo for $2,167,689 for the portion diverted from the funding instruction.
As of September 30, 2021, t he total outstanding amount of Stadium Authority debt had declined to $282.8 million. This is a reduction in principal of $14.0 million from the March 31, 2021 outstanding debt amount of $296.8 million.
Additional details are shown in Tables 7 and 8 and Chart 1. 15 Table 7
Santa Clara Stadium Authority
Debt Service Budget Status Report
For the Period Ending September 30, 2021 and 2020
Period Ending Spetember 30, 2021 Period Ending September 30, 2020 Budget to Budget to
Final Q1 Q2 YTD Actual Final YTD Actual
Budget Actua ls Actua ls Actua ls Difference % Received Budget Actuals Difference % Received Resou rces
Revenu es
Contribution from CFO $ 483,000 $ 158,4 18 $ 257,517 $ 415,935 $ 67,065 86% $ 4,028,000 $ 144,650 $ 3,883,350 4% Revenues Subtotal $ 483,000 $ 158,418 $ 257,517 $ 415,935 $ 67,065 86% $ 4,028,000 $ 144,650 $ 3,883,350 4% Net Transfer s In from Operating 37,572,000 13,716 ,692 13,716,692 23,855,308 37% 39,265,000 32,493,678 6,771,322 83% Contribution from Fund Balance 17,479 ,851 (10,353,308) 7,126,543 (7,126,543) NA 2,265,006 (2,265,006) NA Total Resources $ 38,055,000 $ 17,638,270 $ 3,620,901 $ 21,259,171 $ 16,795,829 56% $ 43 ,293,000 $ 34,903,334 $ 8,389,666 81% Budget to Budget to
Final Q1 Q2 YTD Actua l Final YTD Actual
Budget Actua ls Actua ls Actua ls Difference % Used Budget Actuals Difference % Used Expenses
CFO Advance $ 483,000 $ 421,471 $ 426,102 $ 847,573 $ (364 ,573) 175% $ 3,989,000 $ 1,203,009 $ 2,785 ,991 30% Term A Loan 25,529,000 16,898,728 2,876,728 19,775,456 5,753 ,544 77% 25,562,000 19,458,006 6,103,994 76% StadCo Subordinated Loan 12,043,000 318,071 318,071 636,142 11,406,858 5% 13,742 ,000 14,242,318 (500 ,318) 104% Total Expenses $ 38,055,000 $ 17,638,270 $ 3,620,901 $ 21,259,171 $ 16,795,829 56% $ 43 ,293,000 $ 34,903,334 $ 8,389,666 81% Debt Service Reserve $ 11,536,235 $ 11,536,235 $ 11 ,536,235 $ 11,536,235 16 Chart 1
Type of lndebtedne •s:s
Stadium Funding Trust Loan:
Term A Loan
StadCo CPD Advance
StadGo Subordinated Loan
Total
$700
$600
$500
$400
$300
$200
$100
$-
Table 8
Santa Clara Stadium Authority
Debt Summary Report
For the Period Ending September 3-0, 2021
lnter,est Outstanding as of
Rat,es M!arch 31, 2021 Net Change•
5.00% $ 244 ,160,240 $ (14,022,000)
5.73% 29,502,893
5.50% 23 ,132,426,
$ 296,795,559 $ ,114,022,000}
Total Outstanding Debt (in millions)
$653.4
Outstanding as of
September 3,0, 2021
$ 230 ,138,240
29·,502,89•3
23,132,426
$ 232,773,559
Mar 2012 Mar 2013 Mar 2014 Mar 2015 Mar 2016 Mar 2017 Mar 2018 Mar 2019 Mar 2020 Mar 2021 Sep 2021 ■ Construction Loan ■ StadCo Agency Advance ■ Term B Loan ■ Term A Loan ■ StadCo CFO Advance ■ StadCo Subordinated Loan 17 Capital Improvement Project Budget
There were no projects completed during the second quarter of the fiscal year. However, progress has been made towards the follo wing construction and equipment CapEx projects:
CCTV Pop Up Trailer
Security X-Ray Scanners
Financial Management Information System
Vehicle Upfits for John Deere Gator
Key Management system
Surveillance – Command Center Equipment
The Stadium Authority’s FY2021/22 CIP budget of $14.6 million was adopted on March 23, 2021, and the Board s ubsequently approved budget amendment of $250 thousand for electrical maintenance and repair services related to Levi’s Signage Repairs project in September 2021.
A total of $417,185 has been spent in FY 2021/22, which amounts to 2.9% of the budget.
The main reasons that this is below budget are (1) there has been little activity on warranty work which makes up 10% of the CIP Budge t, and (2) a number of projects are behind schedule due to ManagementCo’s inability to demonstrat e compliance with State procurement and prevailing wage laws. As a re sult, capital projects have stalled. We continue to raise this issue with ManagementCo to ensure the Stadium Authority asset is maintained in a sufficient manner, and we believe that ManagementCo is working towards completing these duties for this fiscal year.
Additional details are shown below in Table 9.
18 Table 9
Santa Clara Stadium Authority
CIP Budget Status Report
For the Period Ending September 30, 2021 and 2020
Period Ending September 30, 2021 I I Period Ending September 30, 2020 Budget to Budget to
Final Q1 Q2 vm Actual Final vm Actual
Budget Actuals Actuals Actuals Difference % Received Budget Actuals Difference % Received Beginning Balances $ 19,438,420 $ 20,805,741 $ 20,779,512 $ 20,805,741 $ (1,367,321) $ 17,837,300 $ 17,010,611 $ 826,689 Resources
Transfers In from Operating Budget 3,940,000 3,940,000 0% 3,582,000 1,159,274 2,422,726 32% Transfers In from Stadium Manager NA NA
Total Resources $ 23,378,420 $ 20,805,741 $ 20,779,512 $ 20,805,741 $ 2,572,679 89% $ 21,419,300 $ 18,1 69,885 $ 3,249,415 84.8% Budget to Budget to
Final Q1 Q2 vm Actual Final vm Actual
Budget Actuals Actuals Actuals Difference % Used Budget Actuals Difference % Used Expenses
Construction 6,993,911 324,661 324,661 6,669,250 5% 4,725,327 17,497 4,707 ,830 0% Equipment 5,734,770 26,229 66,295 92,524 5,642,246 1.6% 6,460,557 11 6,791 6,343,766 2% Contingency 623,935 623,935 0% 559,296 559,296 0%
Stadium Warranty Related Construction 1,528,202 1,528,202 0% 1,528,202 1,528,202 0% Total Expenses $ 14,880,818 $ 26,229 $ 390,956 $ 417,185 $ 14,463,633 2.8% $ 13,273,382 $ 134,288 $ 13,139,094 1.0% Ending Balances $ 8,497,602 $ 20,779,512 $ 20,388,556 $ 20,388,556 $ 8,145,918 $ 18,035,597 19 City of Santa Clara Net General Fund Impact
During the current reporting period there was a total of $629,616 that was contributed to the General Fund as shown in Table 10. Th is section of the r eport also provides information on General Fund revenue and expenditure impacts resulting from the stadium.
Ground Rent 425,000 $
Performance Rent -
Senior and Youth Fee 69,808
Tasman Lots Parking Fee 5,900
Sales Tax 128,908
Total Net General Fund Impact 629,616 $
Table 10
City of Santa Clara
Net General Fund Impact
For Stadium Authority Fiscal Year to Date Ending September 30, 2021
Public Safety and Administrative Cost Reimbursement
As described in earlier sections of this report, costs incurred by the City on NFL and Non- NFL Events are tracked and billed to the Stadi um Manager. Public safety costs incurred in support of NFL and Non-NFL events occurring in FY2021/22 will be reimbursed in full to the City of Santa Clara.
In addition to public safety costs, administrat ive costs are also tracked and billed to the Stadium Authority. These incl ude the cost of providing overall stadium management, financial, human resource, legal, and other services to the Stadium Authority. In the first half of FY 2021/22, a total of $695,257 of admin istrative costs were incurred by the General Fund, which have been reimbursed to the City.
Rents and Senior and Youth Fee
As noted above the City’s General Fund collected ground rent of $425,000. Additionally, Senior and Youth Fee generated $69,808, of which the entir e amount was forwarded to the City in support of senior and youth programs. Lastly, the Tasman Lots Parking Fee generated $5,900 for the City. See the Glossary for more information on these revenues and how they are calculated.
Other Revenue Impacts
General Fund sales tax, property tax, and transient occupancy tax (TOT) collections have benefited from the direct and indirect economic activity related to stadium events.
Food and beverage concession sales and merchandise sales at Levi’s ® Stadium are
taxable, resulting in sales tax revenue for t he City. The last two quarters of sales tax collections from Levi’s® Stadium transactions generated $128,908 for the City’s General Fund. In addition to the direct sellers at the Stadium, other businesses in Santa Clara are 20 benefiting from the influx of people coming to attend one or more events at Levi’s ® Stadium, resulting in potentially more sales tax collections for the General Fund.
In accordance with State Law, StadCo must pay possessory interest property tax based on their lease of Levi’s
® Stadium from the Stadium Authority. This revenue is collected by the county and placed into the Redevelopm ent Property Tax Trust Fund (RPTTF).
Amounts remaining in the RPTTF after payi ng any enforceable obligations of the Successor Agency are distributed to taxing ent ities in the same proportion as secured property taxes. The City’s proportion is approximately 10%.
Many stadium events bring travelers to the region, resulting in hotel stays which generate TOT collections for the City’s General Fund. Although it is impossible to say exactly what portion of the City’s TOT collections is due to the stadium, it is clear that hotels both inside and outside the City have benefited, resulting in increases in TOT collections in Santa Clara and our neighboring cities.
21 Glossary
This section of the report prov ides details behind key terms that are used in the body of this report.
Discretionary Fund – The Amended and Restated Stadium Lease Agreement describes the Non-NFL Event ticket surcharge which is imposed by the Stadium Authority. All promotors or sponsors of ti cketed Non-NFL Events are requi red to collect a Non-NFL ticket surcharge of $4 per ticke t on behalf of the Stadium Author ity. One-ha lf of these proceeds are used to cover Stadium Author ity operating and maintenance costs. The other one-half of the proceeds are deposited in the Stadium Authority’s discretionary fund.
If at any time the discretionary fund balance exceeds $1 million, then in consultation with the Stadium Manager, t he Stadium Authority will determi ne if provision has been made for replacement and improvement of capital improvements contemplated under the public safety plan. If not, then funds will be reserved in the discretionary fund for such purposes.
If adequate provision has been made for these items and the balance of the discretionary fund still exceeds $1 million, then up to hal f of the amount over $1 million can be transferred to the General Fund, in which event an equal amount will also be transferred from the discretionary fund to the Stadium Authority operating fund and will be included as revenue available to pay Stadium Authority expenses.
Ground Lease – The Ground Lease Agreement has an initial term of 40 years commencing on the date of substantial completion which was July 31, 2014. The amount of annual base ground rent that is payable by the Stadium Au thority to the City is noted in the chart below.
Net Non-NFL Event Revenue – Net Non-NFL Event revenue is remitted by ManagmentCo to the Stadium Authority on a yearly basis. This is done annually because the final reconciliation of the Non-NFL Event revenues and expenses does not occur until after the conclusion of each fiscal year.
Lease Year Fiscal Year
Annual Fixed
Ground Rent
1 2014/15 180,000 $
2 2015/16 215,000 $
3 2016/17 250,000 $
4 2017/18 285,000 $
5 2018/19 320,000 $
6 2019/20 355,000 $
7 2020/21 390,000 $
8 2021/22 425,000 $
9 2022/23 460,000 $
10 2023/24 495,000 $
11-15 2024/25 - 2028/29 1,000,000$
16-20 2029/30 - 2033/34 1,100,000$
21-25 2034/35 - 2038/39 1,200,000$
26-30 2039/40 - 2043/44 1,300,000$
31-35 2044/45 - 2048/49 1,400,000$
36-40 2049/50 - 2053/54 1,500,000$
22 Beginning with FY 2018/19, the Stadium Authority budgeted the Non-NFL Event activity at gross, budgeting for revenue and expenses separ ately. In the prio r fiscal years that activity was budgeted as a net amount.
NFL Ticket Surcharge – The Amended and Restated Non-Relocation Agreement states that the Team will collect a 10% NFL ticket surcharge on the price of admission to all NFL games on behalf of Stadium Authority.
Non-NFL Event Ticket Surcharge – The Stadium Lease Agreem ent requires that the promoter or sponsor of any Non-NFL Event collect a Non-NFL Event ticket surcharge of $4 per ticket. The Lease Agreement sets aside one-half of the Non-NFL ticket surcharge for stadium operating and maintenance costs and one-half for discretionary expenses of the Stadium Authority.
Offsite Parking Fees – Parking lot operators who wish to operate a parking lot for sports or entertainment venues are required to go through the City’s permitting process. If approved, per the City’s Municipal Fee Schedule, these operators remit an offsite parking fee for each car that is parked for sports or entertainment events. This fee is designed to recover the public safety costs associated with these permitted offsite parking lots.
Therefore, when invoicing for NFL or Non-NFL public safety costs for a particular event held at Levi’s® Stadium, the offsite parking fee that is collected for said event partly offsets the total public safety costs owed for that event. In the City’s FY 2021/22 (July 1, 2021 through June 30, 2022) the offsite parking fee is $5.91.
Performance-Based Rent – The Amended and Restated Stadium Lease Agreement and the Ground Lease Agreement both describe the performance-bas ed rent that is due to the City. (It is calculated as 50% of the net income from Non-NFL events less performance-based rent credits. The performance-based rent credits include 50% of the fixed ground rent for the current lease year.)
Public Safety Costs – For each NFL and Non-NFL Event held at Levi’s ® Stadium, a
public safety plan is develo ped and implemented. Multiple City departments provide staffing, materials, and supplies to support the public safety plan. Services are provided through a combination of City staff, contracts with other agencies (California Highway Patrol, County Sheriff’s Office, and City of Sunnyvale) and some vendor provided services.
The Amended and Restated Stadium Lease Agreement section 7.5 states that the tenant is responsible for reimbursing the City for the public safety costs attributed to NFL events at Levi’s
® Stadium. Additionally, Article 5 of the Stadium Management Agreement notes that the Stadium Manager is responsible for paying Non-NFL Event expenses on behalf of the Stadium Authority. T herefore, the cost of providing public safety services are tracked through the City’s financial system and invoices are sent to the Stadium Manager.
All of these costs are reimbursed to the City of Santa Clara.
23 Senior and Youth Program Fees – The Amended and Restated Stadium Lease Agreement requires that StadCo collect a S enior and Youth Program Fee of $0.35 per NFL ticket sold on behalf of the Stadium Aut hority. Per section 8.2 of the Ground Lease Agreement between the City and the Stadium Authority, the Stadium Authority remits this fee to the City as additional rent to support senior and youth programs in the City.
Stadium Management Fee – The Stadium Manager receives an annual base management fee to manage Levi’s® Stadium. The fee was $400,000 in the first lease year and increases by 3% annually as detailed in the table below. This annual base management fee is split 50/50 between StadCo and the Stadium Authority since the Stadium Manager manages the stadium year-round for both ent ities. In addition to the base management fee, the Stad ium Manager also receives a stadium marketing and booking fee (incentive fee) wh ich is based on a percentage of the amount that the net income from Non-NFL Events exceeds the marketing and booking fee benchmark. The marketing and booking fee benchm ark was $5 million in the first lease year and also increases by 3% annually as detailed in the table below. The annual stadium management fee for each of the first ten lease years are noted in the chart below.
Tasman Lots Parking Fees – The City collects a fee of $5 per space for all cars that are parked on the Tasman surface lots during NFL events.
Annua l Base Stadium Additional
Stadium Marketing and Net Income Stadium
Fiscal Lease Management Fee Booking Fee from Non-NFL Marketing and Total Stadium Year Year ( SCSA Share) Benchmark E vents Booking Fee Management Fee 2014/15 1 $ 200,000 $ 5,000,000 $ 5,207,553 $ 10,378 $ 210,378 2015/16 2 206,000 5,150,000 6,079,016 46,451 252,451
2016/17 3 212,180 5,304,500 5,316,894 620 212,800
2017/ 18 4 218,545 5,463,635 5,163,329 - 218,545
2018/19 5 225,102 5,627,544 18,591 - 225,102
2019/20 6 231,855 5,796 ,370 (2,74 1,014) - 231,855
2020/21 7 238,810 5,970,261 (476 ,960) - 238,810
2021/22 8 245,975 6,149,369
2022/23 9 253,354 6,333,850
2023/24 10 260,955 6,523,866