Santa Clara Stadium AuthorityStudy SessionProposed Santa Clara Stadium Authority FY 2025/26 Budget, 2025 Marketing Plan, and Compliance and Management PoliciesItem #1 (25-102)February 25, 2025 Agenda
2 1. Budget Development 2. Methodology and Limitations3. Budget Flowchart4. Key Summary5. Excess Revenues Distribution6. Stadium Authority Operating Budget7. Stadium Authority Debt Service Budget8. Stadium Authority Capital Budget9. FY 2025/26 Stadium Operations and Maintenance Plan (SOMP)10. 2025 Marketing Plan11. Key Summary12. Recommendations FY 2025/26 Budget Development
3 Stadium Authority staff worked with ManCo to discuss the annual budget plan which included the dates that ManCo would provide all necessary documents as required by the Stadium Agreements. October/November 2024Stadium Authority staff provided the Stadium Authority G&A, Public Safety Capital Expenses, and Discretionary Fund costs to ManCo for review and incorporation into the annual budget.December 2024At least 45 days prior to the start of the fiscal year (January 31) ManCo provided the required documents per the Stadium Agreements:• Stadium Operations and Maintenance Plan• Annual Shared Expense Budget with Five Year Projection• Annual Stadium Authority Operations Budget, Capital Expenditure Plan with Five-Year Projection• Annual Public Safety Budget• 2025 Marketing Plan and Public Safety Document UpdatesJanuary 2025Staff submitted a series of questions to ManCo on February 11, 2025, and received responses on February 21. February 2025Special Study Session on Fiscal Year 2024/25 Operating, Debt Service, and Capital Budget, Stadium Operation and Maintenance Plan, Public Safety Budget and Marketing PlanFebruary 25 & March 4, 2025, if neededPublic Hearing to approve the SCSA Proposed Fiscal Year 2024/25 Operating, Debt Service, and Capital BudgetMarch 11, 2025SCSA Notice of approval/disapproval of the Stadium Manager’s Draft Annual Stadium Authority BudgetMarch 14, 2025Stadium Manager required to submit Adopted Budget to the Trust (10 days prior to start of FY)March 21, 2025 FY 2025/26 Budget Development (cont.)
4 oGeneral Information oYear in Review for both NFL and Non-NFL EventsoExcess Revenues DistributionoOperating Budget•Stadium Authority General and Administrative Budget•Stadium Manager Shared Expenses and 5 Year Forecast•10-Year Forecast (New Section)oDebt Service BudgetoCapital Budget•Capital Expenditure Plan and 5 Year ForecastoStadium Authority Work Plan FY 2025/26 Budget Development (cont.)
5 Attachments:1. Proposed Santa Clara Stadium Authority Fiscal Year 2025/26 Operating, Debt Service, and Capital Budget 2. Annual Public Safety Budget3. 2025 Marketing Plan4. Stadium Authority Budget Policy 5. Stadium Authority Compliance and Management Policy Methodology and Limitations
6 oThe Budget is on an accrual basis, which records revenues and expenses when they are incurred, regardless of when cash is exchanged.oThe Budget report was based in part on documentation and submitted by ManCo. on January 31, 2025. Additional responses received February 21, 2025. oThe Capital Budget included proposals from both the Stadium Authority and Stadium Manager.oConsistent with terms of the Settlement Agreement finalized December 2024.oLong-term 10-year forecast represents best known data at the time.
Stadium Authority Budget Flowchart
7 City of Santa Clara
City of Santa ClaraoOwns LandoGround Leases to SCSAoLeases Stadium for 49er Football Company oStadium OwneroLeases Stadium to StadCo during the NFL Season (6 months) Santa Clara Stadium Authority (SCSA)
Santa Clara Stadium Authority (SCSA)
StadCo
StadCo
ManCo
ManCooManages Stadium for StadCo and SCSA
Stadium Authority Budget Flowchart(cont.)
8 Stadium Authority Budget Flowchart(cont.)
9*Position count is provided by ManCo and does not include positions in Other Expenses
Stadium Authority Budget Flowchart(cont.)
10Operating Budget$61.2MDebt Service Budget$20.6MCapEx Budget$18.6MDebt Service and Capital Transfers Out$22.8MTotal Budget$77.6M Stadium Authority FY2025/26 Budget Key Summary
11 oImplements terms of the 2024 Settlement AgreementoSupports major events including 2026 World Cup and Super Bowl LX oNet Non-NFL Events Revenue budgeted at $5.3 million•Lower than prior two fiscal years (FY)FY 2023/24 Actual: $8.3 millionFY 2024/25 Projection: $9.2 million•Historical performance increases from preliminary budget projectionoPublic Safety Costs (PSC) reimbursements over threshold expenditure is budgeted to be $2.1 million•$2.0 million from PSC Reserve•$0.1 million from Discretionary FundoPSC 2024 Outstanding Balance ($9.2 million in FY 2024/25, $2.8 million in FY 2025/26)•Projected $2.8 million balance at end of FY2025/26 Stadium Authority FY2025/26 Budget Key Summary (cont.)
12 oDirect payments to the General Fund at $6.2 million •Performance Rent for FY 2025/26 ($2.2 million, accrual basis)•Projected FY 2025/26 Excess Revenue ($2.8 million)•Ground Rent ($1.0 million)•Senior and Youth Fees ($270,000)oNon-NFL Ticket Surcharge revenue is projected to increase $2.0 million, increase of the surcharge from $4 to $8 for tickets sold for certain events oAdditional $1.0 million to the CapEx fund above contractual requirements to provide additional resources for potential additional CapEx expensesoLevi’s Naming Rights expense of $1.6 million to cover the Authority’s obligations under its Naming Rights Agreement with Levi’s to provide suite and tickets to the six 2026 World Cup soccer matches (anticipated additional surcharge of $2.1 million from events).
Excess Revenues Distribution
13 Excess Revenues Distribution: If revenues exceeds expenses in a lease year the Excess Revenues are required to be distributed in the order as set forth in Article 14 of the Stadium Lease agreement as shown below.1. Payoff any outstanding ManCo Revolving Loan – N/A2. Fund Future Stadium Authority Expenses up to $2M –Completed in FY 2014/153. Fund Stadium Capital Expenditure Reserve up to $1M –Annual contribution4. Fund Operating Expense Reserve up to $10M –Completed in FY 2014/155. Repay any outstanding principal balance on Subordinate Loan – Completed in FY 2022/236. Fund Operating Expense Reserve up to $20M –Completed in FY2022/23, Annual 3% Contribution Ongoing7. Fund Renovation / Demolition Reserve (50% if less than $70M) – In progress8. Public Safety Cost 2024 Outstanding Balance (50% of remaining) - In progress9. Additional disbursements can be used to pay Stadium Authority Discretionary Expense, including the City’s General Fund –Future Allocation RevisedNew
Excess Revenues Distribution (cont.)
14Excess Revenue Cash Reserves SummaryFY 2025/26 BudgetFY 2024/25 ProjectedFY 2023/24 ActualReserve Category$2.8M $14.7M $19.3M Capital Expenditure Reserve$27.7M $26.9M $26.1M Operating Reserve$48.8M $43.2M $31.4M Renovation/Demolition Reserve$79.3M $84.8M $76.8M Total
Stadium Authority Operating Budget
15 Key Assumptions in Proposed Operating Budget:oGeneral and Administrative Expenses -$4.7 million, includes 8.7 full time equivalent positions as a baseline level of support•Cost increased by $399,000 or 8%
Stadium Authority Operating Budget (cont.)
16 Key Assumptions in Proposed Operating Budget:oNet Non-NFL Events -$5.3 million projected for FY2025/26•Stadium Manager is projecting six (6) concerts and two (2) soccer events for FY2025/26Net Non-NFL Events Revenue SummaryFY 2025/26 BudgetFY 2024/25 ProjectedFY 2023/24 Actual$5.3M $9.3M $8.3M Stadium Authority Operating Budget (cont.)
17 Key Assumptions in Proposed Operating Budget:oStadium Manager Shared Expenses -$14.0 million, includes 72 full time equivalent positions•Costs increased by $445,000 or 3% Groundskeeping due to higher outside servicesSecurity due to higher compensation costsoSBL Sales and Service -$3.3 million, includes 19 positions charged based on actual time spent Stadium Authority Operating Budget (cont.)
18 Key Assumptions in Proposed Operating Budget:oOther Expenses - $1.4 million, includes other supporting staff, software costs, lender fees and share of ManCo staff office space•This is an increase of $687,000 (or 99%) over FY2024/25 Projected Actuals of $696,000•Main driver is new cost of $620,000 for SCSA share of ManCo office lease spaceThis is pending review Stadium Authority Operating Budget (cont.)
19 Revenues:$ 24,762,000Facility Rent 15,034,000NFL Ticket Surcharge8,065,000Naming Rights5,300,000Non-NFL Event Net Revenue 5,156,000SBL Proceeds3,426,000Non-NFL Event Ticket Surcharge3,421,000Interest722,000Sponsorship Revenue (STR)270,000Senior & Youth Program Fees89,000Non-NFL Events PSC Depreciation Reimbursement$66,245,000Total Revenues Stadium Authority Operating Budget (cont.)
20 Expenses:$13,999,000Shared Stadium Manager Expenses4,687,000Stadium Authority General & Administrative3,251,000SBL Sales and Service2,820,000Public Safety Costs (PSC) 2024 Outstanding Balance2,820,000Transfer to City General Fund from Excess Revenues2,150,000Performance Rent 2,143,000PSC Over Threshold1,796,000Utilities1,699,000Naming Rights Expenses1,383,000Other Expenses1,000,000Ground Rent270,000Senior and Youth Program Fees250,000Discretionary Fund Expense106,000Use of StadCo Tenant Improvements$38,374,000Total Expenses$6.2 million projected to the City’s General Fund Stadium Authority Operating Budget (cont.)
21 General and Administrative BudgetVarianceFY 2025/26 Proposed BudgetFY 2024/25 Amended BudgetExpense Type$ (450,000)$ 3,318,000$ 2,868,000Staff Support(20,000)515,000495,000Legal Services33,000160,000193,000Audit ServicesConsultants-100,000100,000- Community Outreach/Communications/Engagement-87,00087,000- Noise Monitoring48,000449,000495,000Administrative Services(10,000)50,00040,000Other Expenses-8,0008,000Board Stipends$ (399,000)$ 4,687,000$ 4,288,000Total Stadium Authority Operating Budget (cont.)
22oThe Discretionary Fund will be used to cover NFL public safety costs above the public safety cost threshold, public safety capital expenses, and other items at the Stadium Authority’s discretion. Reimbursements of $2.03 million are anticipated in FY 2024/25.Discretionary Fund Projected Ending BalancePublic Safety Costs Over ThresholdFY 2025/26 Discretionary Fund Expense50% of FY 2025/26 Base Non-NFL Event Ticket SurchargeProjected Beginning Balance$1,432,000$120,000$250,000 $701,000 $1,101,000 Stadium Authority Operating Budget (cont.)
23 Performance Rent CalculationoStadium Authority pays the City performance-based rent on top of the fixed ground rentoPerformance-based rent is equal to 50% of the net income from Non-NFL events less 50% of the ground rent and any credited public safety costsoCredited public safety costs is the amount by which public safety costs exceed the public safety costs thresholdoPerformance-based rent is remitted to the City in July following the Stadium Authority’s fiscal year-end.
Stadium Authority Operating Budget (cont.)
24 Performance Rent Calculation (cont.)
Stadium Authority Operating Budget (cont.)
25 Performance Rent Calculation (cont.)Per Stadium Lease Paragraph 7.5.3(a), credited public safety costs is the amount by which public safety costs exceed the public safety costs threshold. Fiscal Year 2025/26 BudgetFiscal Year 2024/25 ProjectionPerformance Rent Calculation$ 1,000,000 $ 1,000,000 Ground Rent5,300,000 9,250,000 Net Non-NFL Event Revenue (Expense)$ 2,650,000 $ 4,625,000 50% of Net Non-NFL Event Revenue (Expense)(500,000)(500,000)Performance Rent Credit from Ground Rent (50% of Ground Rent)$ 2,150,000 $ 4,125,000 Subtotal00Public Safety CreditsN/AN/AOther Credits07,325,0002024 Settlement Agreement Payout for Performance Rent$ 2,150,000 $ 11,450,000 Net Performance Rent paid to the City of Santa Clara Stadium Authority Operating Budget (cont.) Shared Stadium Manager Expenses (cont.) There are twenty (20) positions added to Security, two (2) positions removed from Stadium Ops and one (1) position removed from Engineering:oSecurity: FTE is increasing by 20 positions•Security is transitioning operations in-house. Budget includes three months of security under outside services and nine months for in-house personnel.•Improve quality and consistency of security personnel, enhanced operational control, and improved customer and stakeholder experience26 Stadium Authority Operating Budget (cont.) Shared Stadium Manager Expenses (cont.) oStadium Operations: FTE is decreasing by two positions•Coordinator position was eliminated•Associate Counsel position transition out of SSE and will track actual time spent on SCSA related work and charge to Non-NFL Events, SBL Sales and Service and Other as necessaryoEngineering: FTE is decreasing by one position•Director of Engineering position was eliminated27 Stadium Authority Operating Budget (cont.)
28 Stadium Authority Ten-Year Forecast
29 oExcess revenues projected in each year, $13.5 million in FY2025/26 to $8.2 million in FY2034/35•Excess revenue transfers to City’s General Fund in each year fluctuates from $2.8 million to $6.3 million, will be factored into City General Fund Forecast updateoPublic Safety Cost 2024 Outstanding Balance paid off in FY 2027/28oRenovation/Demolition Reserve filled to $70 million by FY 2030/31oOverall Stadium Authority Reserves increase from $96.2 million in FY2025/26 to $122.3 million in FY2034/35oDirect impact to City’s General Fund including rent, Senior and Youth Fees and Stadium Authority Excess Revenue fluctuates from $5.7 million to $10.0 million Stadium Authority Debt Service Budget
30BudgetDebt Type$3,565,000CFD Advance$17,080,000Term A Loan$20,645,000Total oDebt service amount of $20.6 million includes principal payment of $9.9 million and interest payment of $10.7 millionoTotal outstanding debt is projected to decrease by $9.9 million from $219.7 million to $209.8 millionFY 2025/26 $- $100 $200 $300 $400 $500 $600 $700March2012March2013March2014March2015March2016March2017March2018March2019March2020March2021March2022March2023March2024March2025(forecast)March2026(budget)Total Outstanding Debt (in millions) Construction LoanStadCo Agency AdvanceTerm B LoanTerm A LoanStadCo CFD AdvanceStadCo Subordinated Loan$41.1$396.1$653.4$561.6$464.7$429.8$382.7$340.2$325.3$296.8$245.3$228.7$280.3$219.7$209.831 Stadium Authority Debt Service Budget (cont.)68% reduction in outstanding debt from March 2014 Stadium Authority Capital Budget
32 Total Capital Budget of $18.6 millionoStadium Improvements: $17.1 million•New Projects: $5.2 millionConstruction ($4.0 million): LED Retrofit, Structural Steel Coating, Boilers, Escalator Canopies Bird ProofingEquipment ($907,000): Medical Equipment, Kawasaki ATVsContingency ($248,000)•Carryover Projects: $11.9 millionConstruction ($8.5 million): Lighting Systems, Waterproofing/Caulk/Joint ReplacementsEquipment ($2.8 million): Radio Booth Cabling, Main Kitchen EquipmentContingency ($565,000)oStadium Warranty-Related Construction: $1.5 million•Outstanding projects and claims are under review, upon confirmation that no warranty work is anticipated, funds can be allocated to general Stadium improvements Stadium Authority Capital Budget (cont.)New Capital Expenditure ProjectsoLED Retrofit Project –Phase 2 ($1.1 million) –Replace existing fixtures that are no longer manufactured and/or inefficient lighting fixturesoBoilers ($500,000) –replaces boiler and/or critical boiler support componentsLED Retrofit 33
Stadium Authority Capital Budget (cont.)Carryover Capital Expenditure ProjectsoNaming Rights Signage ($1.6 million) – Replacement of Levi’s Signage under First Amendment to the Naming Rights Agreement oLighting Systems – ($2.7 million) – Replaces current metal halide stadium field/sports lights with outdoor LED retrofit.Levi’s Naming Rights Signage Refurbishment34
Stadium Authority Capital Budget (cont.)FY2024/25 ProjectsAesthetic Improvements – Premium Club Areas / Special Event Spaces35 Levi’s Naming Rights Signage Refurbishment
Stadium Operations and Maintenance Plan (SOMP)
36 oThe Management Agreement requires the Stadium Manager to prepare a SOMP designed to achieve a safe and well-maintained Stadium. oStaff is reviewing this confidential document and will share the City and Stadium Authority’s comments directly with the Stadium Manager. oThe SOMP is approved administratively. oBoard received an email on why the SOMP is confidential. 2025 Marketing Plan
37 oThe Stadium Manager submitted the 2025 Marketing Plan as part of annual Budget process.oStaff has hired a consultant to evaluate marketing strategies, media plans, and performance data for the 2025 Marketing Plan.oStaff plans to work with the Stadium Manager in the upcoming year to continue to refine and implement the Marketing Plan. Three key focus areas:•Evaluating marketing and branding consistency•Assessing media plans for efficiency and return on investment (ROI)•Interpreting performance data to identify trends and opportunities for improvement Stadium Authority FY2025/26 Budget Key Summary
38 oImplements terms of the 2024 Settlement AgreementoSupports major events including 2026 World Cup and Super Bowl LX oNet Non-NFL Events Revenue budgeted at $5.3 million•Lower than prior two fiscal years (FY )FY 2023/24 Actual: $8.3 millionFY 2024/25 Projection: $9.2 million•Historical performance increases from preliminary budget projectionoPublic Safety Costs (PSC) reimbursements over threshold expenditure is budgeted to be $2.1 million•$2.0 million from PSC Reserve•$0.1 million from Discretionary FundoPSC 2024 Outstanding Balance ($9.2 million in FY 2024/25, $2.8 million in FY 2025/26)•Projected $2.8 million balance at end of FY2025/26 Stadium Authority FY2025/26 Budget Key Summary (cont.)
39 oDirect payments to the General Fund at $6.2 million •Performance Rent for FY 2025/26 ($2.2 million, accrual basis)•Projected FY 2025/26 Excess Revenue ($2.8 million)•Ground Rent ($1.0 million)•Senior and Youth Fees ($270,000)oNon-NFL Ticket Surcharge revenue is projected to increase $2.0 million, increase of the surcharge from $4 to $8 for tickets sold for certain events oAdditional $1.0 million to the CapEx fund above contractual requirements to provide additional resources for potential additional CapEx expensesoLevi’s Naming Rights expense of $1.6 million to cover the Authority’s obligations under its Naming Rights Agreement with Levi’s to provide suite and tickets to the six 2026 World Cup soccer matches (anticipated additional surcharge of $2.1 million from events).
Recommendations
40 1. Review and Provide Input on the Proposed Santa Clara Stadium Authority Fiscal Year 2025/26 Operating, Debt Service, and Capital Budget, Draft 2025 Levi’s Stadium Events Marketing Plan, and Proposed Stadium Authority Budget, Compliance and Management Policies Santa Clara Stadium AuthorityStudy SessionProposed Santa Clara Stadium Authority FY 2025/26 Budget, 2025 Marketing Plan, and Compliance and Management PoliciesItem #1 (25-102)February 25, 2025