Stadium hearing looming; Montana deal OK'd

Santa Clara County has surprised both the 49ers and the city of Santa Clara leaders by pulling $30 million in tax funds from the new 49ers stadium, but the team is going to court to force the city to pay the tax funds that the city already has pledged for the $1.2 billion stadium project.

Santa Clara County officials told the San Jose Mercury News last week that they would rather spend the money on teachers.

The team and the city said voters had specifically earmarked redevelopment money to help build the stadium and that the county has no right to keep it.

The 49ers on Wednesday filed a lawsuit to prevent a Santa Clara County Oversight Board from reneging on the commitment of funds for the new stadium that already is under construction in Santa Clara.

The investment of RDA funds for the project was approved by Santa Clara voters in June 2010 and formalized in written agreements in February of 2011. The 49ers advanced funds into the stadium project in reliance on RDA's commitment to the project.

Sacramento Superior Court Judge Lloyd G. Connelly has issued a temporary restraining order, requiring the county to hold the funds until a hearing on Tuesday.

"The Judge's order is a positive first step," 49ers CFO Larry MacNeil said. "We look forward to discussing with the County how we can resolve this matter."

The revocation occurred last Friday by a new board that oversees property tax from redevelopment zones.

"Let's be real: That stadium is going to get built whether or not you get this $30 million," county tax collector George Putris, the oversight board member who proposed the motion, told a 49ers attorney at the meeting. He said the need was greater at other public agencies, such as school districts. The motion passed 4-3.

The move was so unexpected that Santa Clara leaders claim it was done in violation of public notice laws.

Santa Clara voters approved a 2010 measure that allocated $40 million in redevelopment funds for the stadium, which is set to open in 2014.

The state later did away with redevelopment agencies, and Santa Clara's redevelopment fund had only paid $10 million toward the stadium. So the 49ers loaned Santa Clara leaders the remaining $30 million and started construction, thinking they'd be paid back from future property tax revenues.

Construction of the stadium began in April and has been moving along quickly outside the front doors of team headquarters in Santa Clara.

Officials have said the team would simply absorb the cost if it loses the funds, which amount to less than three percent of the stadium's total price tag.

"The stadium is a public-private partnership success story," MacNeil said. "The cash advanced by the 49ers, backed by the RDA commitment, leveraged hundreds of millions in new funding to create one of the largest construction projects in the state. After just a few months it has created several hundred jobs, provided regional economic impact and funding for the Santa Clara School district. By this fall, there will by 1,000 workers on this job."

In other stadium-related news, Santa Clara officials have given the go-ahead for the city to begin negotiations with legendary 49ers quarterback Joe Montana for a hotel and entertainment complex across from the new stadium.

The City Council voted 4-2 earlier this week in favor of negotiating exclusively with Montana's group.

The project would go up on two city-owned lots, totaling 8 acres. Montana has said he has money for a four-star hotel, a sports bar, an upscale restaurant and additional entertainment uses.

They would open with the new 49ers stadium before the 2014 NFL season.

The two council members who voted against the idea – Jamie McLeod and Will Kennedy – said the city shuld open the land to all potential developers instead of working only with Montana.

Niners Digest Top Stories