MINUTES OF THE SANTA CLARA STADIUM AUTHORITY OF
THE CITY OF SANTA CLARA FOR MEETING
HELD ON TUESDAY EVENING, FEBRUARY 28, 2012

 

 

     The Santa Clara Stadium Authority of the City of Santa Clara met at 5:00 pm, on the above mentioned date, for a Closed Session in the Council Conference Room for a Conference with Real Property Negotiator pursuant to Government Code Section 54956.8;   Property: APN: 104-43-030; APN: 104-43-051; APN: 104-43-052;   APN: 104-42-014 and APN: 104-42-019; Negotiating Party(ies):  City    of Santa Clara and the San Francisco 49ers; Stadium          Authority Negotiator: Jennifer Sparacino, Executive Director (or her designee); Under Negotiation: Purchase/Sale/Exchange/Lease of Real Property (provisions, price and terms of payment). 

 

     The Stadium Authority then met at 10:21 pm for the regular scheduled meeting in the City Hall Council Chambers.

 

 

 

     Present:  Stadium Authority Board Members Will Kennedy, Patrick Kolstad, Patricia M. Mahan, Jamie McLeod and Kevin Moore and Vice-Chairperson Lisa M. Gillmor.  Absent: Chairperson Jamie L. Matthews (excused).

 

 

 

     MOTION was made by Kennedy, seconded and unanimously carried (Matthews absent), that the Stadium Authority excuse Chairperson Matthews from attendance at this evening’s meeting.

 

 

 

     MOTION was made by Moore, seconded and unanimously carried (Matthews absent), that the Minutes for the meeting of January 24, 2012 be adopted as written.

 

 

 

     Earlier in the evening, the Mayor/Chairperson opened a joint City Council (Council)/Santa Clara Stadium Authority (Stadium Authority) meeting to consider this evening’s action items as they relate to the proposed San Francisco 49ers stadium.

 

     The City Manager/Executive Director gave an electronic presentation and stated that during negotiations, City staff continue to ensure that Measure J requirements are met; no general or enterprise funds (utilities) monies are used or pledged to the project for construction or operations; there is no tax increase for the Stadium; that fair market rent is received for the land to the City; the Redevelopment Agency investment is capped at $40 million and the Community Facilities District is capped at $35 million; and that there is no subordination of City-owned land. She noted that although the deal structure has been modified, per the Disposition and Development Agreement (DDA) and Financing Plan, the City still remains protected from risk. She then outlined actions for consideration of the Council and the Stadium Authority this evening as well as actions at future meetings, including two potential Special Meetings to be held March 13, 2012 and/or March 15, 2012. A site map was displayed and the City Manager/Executive Director reviewed the project site, including the stadium and parking garage.

 

     Tom Webber, redevelopment attorney, continued the electronic presentation by providing an overview of the Ground Lease between the City of Santa Clara and the Santa Clara Stadium Authority. He stated that the DDA approved by the Stadium Authority in December 2011 anticipated that the City would enter into a Ground Lease with the Stadium Authority for the stadium site. He reiterated that during the negotiations, City staff has ensured that the requirements of Measure J have been met. The City’s fee interest in the stadium site is not subordinated to any stadium financing. The initial term of the Ground Lease will be for a 40 year period. The Ground Lease provides for a fixed base rent and performance based rent. The former Redevelopment Agency’s contribution is limited to a maximum of $40 million, exclusive of debt service,  financing costs and the payment to the City of certain development fees. If a second team relocates to the stadium, the fixed base rent will be increased and the City will receive an amount equal to the former redevelopment agency’s investment in the stadium. The Ground Lease provides that construction of the stadium will not commence prior to the Stadium Lease being executed. Following the opening of the stadium, the City will receive the Senior and Youth Program fee of up to $250,000, per year. The Ground Lease will be executed concurrently with the close of escrow for the construction financing. Mr. Webber reiterated that although the Ground Lease is being considered for approval this evening, no construction can take place until the execution of the Stadium Lease and financing documents. Under the Ground Lease, the construction of the stadium must commence within 120 days following the execution of the Ground Lease and must be completed within 3 years. The initial 40 year term of the Ground Lease will commence upon substantial completion of the stadium. The Stadium Authority will also have 5 options, each for 4 years, and 1 interim option. The City will receive a fixed ground rent of $180,000 in the first year of the term, which will increase to $1.5 million per year for the last five years of the initial term of the Ground Lease. The Ground Lease also provides that the City receive an annual performance based rent equal to 50% of net income from non-NFL events, less certain credits. The updated Economic Report, provided by Keyser Marston Associates, concludes that the fixed ground rent together with the performance based rent is projected to provide fair market rent to the City. The Ground Lease further provides that the Stadium Authority may sublease the stadium to StadCo, which then allows StadCo to sublease the stadium to the 49ers football team. The Ground Lease also provides that StadCo may also sublease to a second team. If a second team relocates to the stadium, the City will receive additional ground rent in the amount of the former Redevelopment Agency’s contribution to the stadium,  which is currently projected to be approximately $11.5 million. In addition, the fixed ground rent will be increased by $1 million and will increase periodically thereafter. At the election of the City, the Stadium Authority will be required to demolish the stadium. If the City elects not to demolish the stadium, the City will own the stadium.

 

     The Director of Public Works/City Engineer then reviewed the subdivision of the City-owned parcels to facilitate the 49ers stadium project (provided handout).

 

     Mr. Webber continued the electronic presentation by reviewing the proposed Amendment No. 2 to the Lease Agreement with the 49ers for the Training Facility. This amendment removes certain property from the leasehold premises and also grants to the 49ers, as lessee, rights to use certain easements created pursuant to the Subdivision Map.

 

     The City Manager/Executive Director concluded the electronic presentation by reviewing staff recommendation on the proposed above-mentioned items.

 

     A Council/Stadium Authority discussion followed.

 

     MOTION was made by Gillmor, seconded and carried with Kennedy and McLeod dissenting, that, per the Assistant City Manager/Assistant Executive Director’s memo (02/21/12), the Council adopt Resolution No. 12-7909 entitled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARA APPROVING A GROUND LEASE AGREEMENT BETWEEN THE CITY OF SANTA CLARA AND THE SANTA CLARA STADIUM AUTHORITY” which approves a Ground Lease Agreement with the Santa Clara Stadium Authority for City-owned property to be developed for a professional football stadium.

 

     MOTION was then made by Gillmor, seconded and carried with Kennedy and McLeod dissenting, that the Stadium Authority Board adopt Resolution No. 12-5 (STADIUM AUTHORITY) entitled, “A RESOLUTION OF THE SANTA CLARA STADIUM AUTHORITY APPROVING A GROUND LEASE AGREEMENT BETWEEN THE SANTA CLARA STADIUM AUTHORITY AND THE CITY OF SANTA CLARA” which approves a Ground Lease Agreement with the City of Santa Clara for City-owned property to be developed for a professional football stadium.  

 

 

     The Stadium Authority Counsel reported that earlier in the evening, the Stadium Authority met for a Closed Session in the Council Conference Room for a Conference with Real Property Negotiator pursuant to Government Code Section 54956.8;  Property: APN 104-43-030; 104-43-051; 104-43-052; 104-42-014 and         104-42-019; Negotiating Party(ies):  City of Santa Clara and the            San Francisco 49ers; Stadium Authority Negotiator: Jennifer Sparacino, Executive Director (or her designee); Under Negotiation: Purchase/Sale/Exchange/Lease of Real Property (provisions, price and terms of payment) and there was no reportable action.

 

 

 

     MOTION was made by Moore, seconded and unanimously carried (Matthews absent), that, per the Stadium Authority Counsel’s memo (02/23/12), the Stadium Authority set Tuesday, March 6, 2012 as amended to begin at 5:00 pm for a Closed Session in the Council Conference Room for a Conference with Real Property Negotiator pursuant to Government Code Section 54956.8;  Property:         APN 104-43-030; 104-43-051; 104-43-052; 104-42-014 and                 104-42-019; Negotiating Party(ies):  City of Santa Clara and the San Francisco 49ers; Stadium Authority Negotiator: Jennifer Sparacino, Executive Director (or her designee); Under Negotiation: Purchase/Sale/Exchange/Lease of Real Property (provisions, price and terms of payment).

 

 

 

     MOTION was made by McLeod, seconded and unanimously carried (Matthews absent), that there being no further business, the meeting was adjourned at 10:24 pm to Tuesday evening,          March 6, 2012 at 5:00 pm for a Closed Session in the Council Conference Room and to 7:00 pm for the regular scheduled meeting in the City Hall Council Chambers.

 

 

 

 ATTEST:  ________________________

             Secretary

 

 

 

APPROVE: ________________________

            Chairperson