http://www.insidebayarea.com/collegesports/ci_5505385
For the first time, 49ers ownership is openly pushing a plan to tap Santa Clara's utility reserve funds to help finance an $800 million stadium near Great America.
The team has hired a consultant to study how it could use the electric utility's $242 million Cost Reduction Account or other funds for the stadium effort, though it's not clear whether the financing would be through a loan or as part of a direct payment by the city.
"From what we've seen, it wouldn't impact rates," Jed York, the 49ers' point man on the stadium project, said in an interview this week, as the team began marshaling political, business and community support for what looks like the beginning of a campaign that could lead to a vote on public financing for the stadium.
The Niners have been polling focus groups to gauge public support for such a plan, but top team officials haven't spoken out until now.
Santa Clara and Silicon Valley Power officials have a much less rosy view of the ramifications of tapping the utility fund. They say the reserve funds are crucial to paying for planned electric system improvements, such as new transmission capacity and improvements to wind-powered green energy. Tapping the reserve funds would lead to increased electric rates, they say, in part because Silicon Valley Power's debt rating could drop, making it more expensive to borrow money.
"At some point in the future if those reserves get significantly worked down, it will require rate increases," Assistant City Manager Ron Garratt said Thursday. A recent report by the Standard & Poor's rating agency cited Silicon Valley Power's Cost Reduction Account as a key reason for the utility's "A" bond rating.
Two new advocacy groups formed with the 49ers' blessing have emerged to back the stadium, including a group of Santa Clara business leaders and former city officials who called Thursday for investing power reserve funds in the stadium. Tapping the utility fund for a stadium would require voters to approve a change in the city charter.
Donald Von Raesfeld, a prominent former Santa Clara city manager and city council member whose name graces the city's power plant off Central Expressway, championed the idea in a letter to the editor in the Santa Clara Weekly.
Silicon Valley Power "controls today a substantial cash reserve," he wrote. "Instead of allowing this money to return little to Santa Clara, the city should invest some of it in the 49ers stadium, the most important development project in Santa Clara in years."
A new stadium and related development would expand the utility's rate base, Von Raesfeld wrote, increasing its revenues.
The city manager from 1962 to 1986, Von Raesfeld said in an interview that he was not paid to write the article and that the words and ideas were his own. However, he said he received "a little bit of a suggestion" from the team to write the article.
The team has yet to fix the construction cost for the stadium, or the amount the team will ask Santa Clara to finance, York said Wednesday, although city officials have said they expect the request would be near $200 million.
Their official proposal is expected next month. The balance of the stadium's estimated $800 million cost would come from the capitalization of stadium revenues, such as the sale of naming rights, from the NFL and from the York family. Sources close to the 49ers say the team has not yet decided whether to ask Santa Clara to use the utility funds through a loan or as an outright payment by the city for the stadium, which the team has said they want Santa Clara to own.
The new advocacy groups that emerged Thursday - one regional and one Santa Clara-based - provide an early glimpse of the political backing for the stadium.
The local group, the Santa Clara 49er Advisory & Advocacy Committee, will be headed by former Mayor Larry Marsalli and former school Superintendent Don Callejon.
"We are not a rubber stamp for the 49ers," said Lisa Gillmor, a former councilwoman whose family is prominent in Santa Clara real estate and who are longtime power brokers in Santa Clara.
She and other members compared the stadium proposal to the city's backing of the visionary construction of Great America years ago. "We're still a small town but we're not small-minded," she said.
Meanwhile, Santa Clara County Assessor Larry Stone, a key figure in earlier efforts to bring pro sports to the South Bay, is organizing a countywide group of political, union and business leaders to work on everything from luxury suite and season ticket sales to advertising and sponsorships in the new stadium.
The group will include three San Jose City Council members - Vice Mayor Dave Cortese, Pete Constant and Sam Liccardo - county Supervisor Ken Yeager, several state legislators, union leaders including Neil Struthers, chief executive officer of the Santa Clara and San Benito Counties Building & Construction Trades Council, and corporate executives such as Gary Fazzino of Hewlett-Packard, a former mayor of Palo Alto.
"It's important to convey to people in Santa Clara that you have support, and that the 49ers are an important regional asset, and we want to make certain we can demonstrate that support," Stone said
For the first time, 49ers ownership is openly pushing a plan to tap Santa Clara's utility reserve funds to help finance an $800 million stadium near Great America.
The team has hired a consultant to study how it could use the electric utility's $242 million Cost Reduction Account or other funds for the stadium effort, though it's not clear whether the financing would be through a loan or as part of a direct payment by the city.
"From what we've seen, it wouldn't impact rates," Jed York, the 49ers' point man on the stadium project, said in an interview this week, as the team began marshaling political, business and community support for what looks like the beginning of a campaign that could lead to a vote on public financing for the stadium.
The Niners have been polling focus groups to gauge public support for such a plan, but top team officials haven't spoken out until now.
Santa Clara and Silicon Valley Power officials have a much less rosy view of the ramifications of tapping the utility fund. They say the reserve funds are crucial to paying for planned electric system improvements, such as new transmission capacity and improvements to wind-powered green energy. Tapping the reserve funds would lead to increased electric rates, they say, in part because Silicon Valley Power's debt rating could drop, making it more expensive to borrow money.
"At some point in the future if those reserves get significantly worked down, it will require rate increases," Assistant City Manager Ron Garratt said Thursday. A recent report by the Standard & Poor's rating agency cited Silicon Valley Power's Cost Reduction Account as a key reason for the utility's "A" bond rating.
Two new advocacy groups formed with the 49ers' blessing have emerged to back the stadium, including a group of Santa Clara business leaders and former city officials who called Thursday for investing power reserve funds in the stadium. Tapping the utility fund for a stadium would require voters to approve a change in the city charter.
Donald Von Raesfeld, a prominent former Santa Clara city manager and city council member whose name graces the city's power plant off Central Expressway, championed the idea in a letter to the editor in the Santa Clara Weekly.
Silicon Valley Power "controls today a substantial cash reserve," he wrote. "Instead of allowing this money to return little to Santa Clara, the city should invest some of it in the 49ers stadium, the most important development project in Santa Clara in years."
A new stadium and related development would expand the utility's rate base, Von Raesfeld wrote, increasing its revenues.
The city manager from 1962 to 1986, Von Raesfeld said in an interview that he was not paid to write the article and that the words and ideas were his own. However, he said he received "a little bit of a suggestion" from the team to write the article.
The team has yet to fix the construction cost for the stadium, or the amount the team will ask Santa Clara to finance, York said Wednesday, although city officials have said they expect the request would be near $200 million.
Their official proposal is expected next month. The balance of the stadium's estimated $800 million cost would come from the capitalization of stadium revenues, such as the sale of naming rights, from the NFL and from the York family. Sources close to the 49ers say the team has not yet decided whether to ask Santa Clara to use the utility funds through a loan or as an outright payment by the city for the stadium, which the team has said they want Santa Clara to own.
The new advocacy groups that emerged Thursday - one regional and one Santa Clara-based - provide an early glimpse of the political backing for the stadium.
The local group, the Santa Clara 49er Advisory & Advocacy Committee, will be headed by former Mayor Larry Marsalli and former school Superintendent Don Callejon.
"We are not a rubber stamp for the 49ers," said Lisa Gillmor, a former councilwoman whose family is prominent in Santa Clara real estate and who are longtime power brokers in Santa Clara.
She and other members compared the stadium proposal to the city's backing of the visionary construction of Great America years ago. "We're still a small town but we're not small-minded," she said.
Meanwhile, Santa Clara County Assessor Larry Stone, a key figure in earlier efforts to bring pro sports to the South Bay, is organizing a countywide group of political, union and business leaders to work on everything from luxury suite and season ticket sales to advertising and sponsorships in the new stadium.
The group will include three San Jose City Council members - Vice Mayor Dave Cortese, Pete Constant and Sam Liccardo - county Supervisor Ken Yeager, several state legislators, union leaders including Neil Struthers, chief executive officer of the Santa Clara and San Benito Counties Building & Construction Trades Council, and corporate executives such as Gary Fazzino of Hewlett-Packard, a former mayor of Palo Alto.
"It's important to convey to people in Santa Clara that you have support, and that the 49ers are an important regional asset, and we want to make certain we can demonstrate that support," Stone said