From: Brian Doyle
To: Clerk; Manager
Subject: City Council Agenda 3.11.2025 - Item: Public Presentations Date: Tuesday, March 11, 2025 10:30:51 AM
Attachments: Public Presentation.pptx
Please include the attached under today's Public Presentations on today's agenda.
Thank you,
Brian Doyle
Santa Clara Stadium
Authority
Back to Basics
MEASURE J
Measure J
• City Attorney and outside counsel got it wrong on advising on Measure J
• They completely ignored subsection (g) and the legislative history that supports the promise that the City receives Fair Market Value Rent for the land that it leases to the Stadium Authority.
Section 17.20.020 Santa Clara City Code
(g) In addition to the fixed base rent, the ground lease shall require payment by the Stadium Authority into the City’s general fund of performance-based rent which, together with the fixed base rent, the City Council has determined is projected to provide fair market rent to the City. Performance-based rent shall be pursuant to a formula that provides for sharing of the revenues less expenses of non-NFL events at the stadium. As used herein, the term “non-NFL events” means events such as concerts and sporting events that are approved by the Stadium Authority and the private tenant, excluding NFL events. The fixed base rent and performance-based rent payable by the Stadium Authority to the City under the ground lease, as provided in this subsection and subsection (f) of this section, are referred to in this chapter as “ground rent.” A Promise from the beginning
The promise to pay Fair Market Value Rent for the City’s land was a key commitment throughout the legislative history of Measure J:
2009 – Initiative petition and Term Sheet
2010 – Ballot Measure language
2010 – Ballot Arguments
2011 – City Council Study Session
2013 – Stadium Lease Exhibit J
2009 Initiative Petition
2009 “Term Sheet”
“PERFORMANCE BASE RENT TO THE CITY’S GENERAL FUND”
2010 “Ballot Question”
2010 City Attorney Impartial Analysis
… and would require the Stadium
Authority pay the City
“performance based rent” ..
2010 Text of Measure J Ballot provisions
The very first “Binding Requirement” in Measure J
2010 Ballot Argument
$155 Million in
Performance Rent
2011 “Study Session”
“to ensure that the City
receives the projected
fair market rent required
under Measure J”
2013 Amended and Restated Stadium Lease
Exhibit J
Money-Losing Events reduce Net Revenue
• Annual Performance Rent is based on half of non-NFL Net Revenue • Money losing events reduce Net Revenue, and therefore Performance Rent
• Booking money-losing events was one of the key reasons that the Board terminated the Management Agreement in 2019
• By booking the World Cup at a loss, ManCo violated the Management Agreement and violated Measure J by reducing Net-Revenue • Allowing the Stadium Authority to pay some of the losses further violates Measure J
Council’s Duty
17.20.010 Purpose.
This chapter is intended to further the City’s goal of creating an enhanced entertainment destination in the Bayshore North Redevelopment Project Area by providing for the development and operation of a stadium suitable for professional football and other events (the “stadium”) in a manner that will provide a long-term revenue stream to the City. (Measure J § 3, 6-8-10).
17.20.030 Council determinations.
SCCC 17.20.020
is the legislative policy of the City and provides the ways and means of accomplishing that legislative policy. Where SCCC 17.20.020 provides for any determination or approval by the City Council, such determination or approval shall be made by the City Council taking into account the purposes and findings of the voter-approved measure enacting this chapter, and shall be made on or before the Council’s approval of an agreement that commits the City to enter into a ground lease. (Measure J § 3, 6-8-10). 2024 “Out Played” Grand Jury Report
No Net Performance Rent since FY 2017-18
• Line 7 of the Chart excerpted from the Grand Jury Report shows that no net Performance Rent had been paid since FY 2017-2018 • Therefore, the City Council’s agreement to the 2022 Settlement Agreement was in violation of Council’s duty to ensure the payment of Fair Market Value Rent
• The City Council/Stadium Authority Board’s approval of the Assignment of the money-losing World Cup events, without recapturing ALL of the Stadium Authority’s expenditures and lost revenue is a violation of Measure J
Fair Market Value Rent
• Was baked into the Lease in Exhibit J
• Was used as evidence that the non-NFL lease term was not StadCo’s possessory interest that could be taxed, resulting in a massive loss of property tax revenue to local public entities • Was paid for the first three years
• Recent transfers do not look like Performance Rent and do not make up for previous failure to pay Fair Market Value
Staff’s argument that reimbursement of City cost from the Stadium Authority revenue does not violate Measure J is wrong and was in violation of the guiding negotiating principles
First Guiding Principle:
”Attain reimbursement of all event costs, including public safety (pre- and post-event costs)”
On 5/23/23 in adopting this principle, the Mayor said:
“I AGREE WITH AUTHORITY MEMBER CHAHAL THAT I WANT TO PROTECT NOT ONLY THE CITY, BUT THE STADIUM AUTHORITY FROM THESE FINANCIAL RISKS.AND HAVE THE HOST COMMITTEE,
WHOEVER THEY ARE, WE WILL FIND OUT WHO EXACT THEY ARE SO THAT THEY PAY FOR EVERYTHING.”
Staff excused its failure to comply by making an (incorrect) argument that payment of City costs did not violate Measure J.