08. SB49
City Hall
10300 Torre Avenue
Cupertino, CA 95014-3255
(408) 777-3262
FAX: (408) 777-3366
CITY OF
CUPEI\fINO
SUMMARY
Agenda Item ~
Date: March 20, 2007
Subject: Recommendation that the City Council oppose SB 49 (Migden).
Background and Analysis: In November 2006, the San Francisco 4gers determined that a plan to
build a new stadium and mixed-use development at San Francisco's Candlestick Point would
create too many transportation and parking issues for its fans due to incompatible land
requirements at the site and massive infrastructure deficiencies in the area. As a result, the team
decided not to move forward with the public approval process for the project. In an effort to
replace its current stadium, in December 2006, the team announced its interest in relocating to
the nearby City of Santa Clara, which has served as the location of the 4gers' headquarters and
practice facility for over two decades. The 4gers and the City of Santa Clara have discussed a
proposed stadium near the Santa Clara Convention Center and the Great America Amusement
Park.
SB 49 is intended to prevent the San Francisco 4gers from relocating. It this bill passes, it would
impose a restriction on any local agency or redevelopment agency within 100 miles of San
Francisco from providing financial assistance, thereby precluding any other Bay Area city from
hosting the 4gers. It would prevent Santa Clara from entering any financial partnership with the
4gers without risking litigation, and the County of Santa Clara would lose any economic, social
and recreational benefits from the 4gers relocating to Santa Clara.
The San Francisco 4gers have always been a regional team and a regional asset. More than 90
percent ofthe team's season ticket holders live outside the City of San Francisco. Forty-niner
players and staff live throughout the Bay Area, and the team's community outreach and
charitable programs are active throughout the region. The social and economic benefits of the
San Francisco 4gers are important to the entire San Francisco Bay Area, including the County of
Santa Clara, not just the City of San Francisco.
The challenge of financing and building stadium venues for professional football teams in more
densely developed urban settings is not new or unique to San Francisco. Construction costs,
parking, highway and mass transit access and the "game day" experience requirements have led
other franchises, ultimately, to more suburban or ex-urban sites. The Washington Redskins play
in Landover, Maryland. The Dallas Cowboys play in Irving, Texas with plans to move to nearby
Arlington. And the New York Giants and New York Jets play in the Meadowlands, New Jersey.
These teams maintained their association with their principal "home" cities when they moved
within their region so all the benefits stayed put and the fans continued to enjoy their respective
historic NGL franchises.
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In January 2007, the Bay Area Council, which represents hundreds of major employers in the
nine-county Bay Area, including San Francisco, announced its opposition to SB 49. The City of
San Jose, Sunnyvale, Monte Sereno, Saratoga and the Silicon Valley Leadership Group oppose
the bill.
The bill's intent to insulate sales tax generation inside San Francisco and abrogate a local city's
right to enter into public-private partnerships with NFL franchises is unfair. For these reasons,
staff recommends that the City Council oppose SB 49.
Recommendation: It is recommended that the City Council oppose SB 49 (Migden).
Approved for submission:
~
Rick Kitson
Public Communication Manager
David W. Knapp
City Manager
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SB 49 Senate BiH- Bill Analysis
http://leginfo.ca.gov/pub/07-08/billlsenlsb_000l-0050/sb _49_ cfa_2...
SENATE LOCAL GOVERNMENT COMMITTEE
Senator Gloria Negrete McLeod, Chair
BILL NO: SB 49
AUTHOR: Migden
VERSION: 2/22/07
Weinberger
HEARING: 3/7/07
FISCAL: No
CONSULTANT:
RELOCATION OF SPORTS FRANCHISES
Background and Existing Law
Local officials sometimes use their economic development
powers to induce businesses to relocate to their
communities. State law bans counties, cities, and
redevelopment agencies from subsidizing the relocation of
big box retailers and auto malls within the same market
area (SB 114, Torlakson, 2003).
Since the Oakland Raiders football franchise moved to Los
Angeles in 1982, competition among cities to host National
Football League (NFL) franchises has escalated, generating
substantial public subsidies for constructing and
renovating NFL stadiums.
In November 2006, the San Francisco 4gers announced plans
to pursue the construction of a new stadium in Santa Clara
that is about 35 miles south of their current home stadium
in San Francisco. The Santa Clara City Council
subsequently voted to conduct a feasibility study of the
proposed stadium project using $200,000 from redevelopment
funds. San Francisco officials are trying to keep the
4gers and, using the ban on relocation subsidies for auto
malls and big box retailers as a model, want to curtail
public subsidies for stadium projects.
Proposed Law
Senate Bill 49 prohibits a city, county, city and county,
or redevelopment agency from providing any financial
assistance to a sports stadium project whenever:
The stadium project involves a National Football
League franchise relocating from the territory of one
local agency to that of another local agency within
the same "market area" and ,
The franchise is relocating from a jurisdiction in
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which there is a sports stadium where it has played
its home games for more than 25 years and ,
The name of the local agency from which the
franchise is relocating has been incorporated into the
name by which the franchise is commonly known.
SB 49 defines "financial assistance" as including:
Bonds or other forms of indebtedness.
Loans, grants, subsidies, guaranties, or payments.
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SB 49 Senate Bill- Bill Analysis
http://leginfo.ca.gov/pub/07-08/bilVsenlsb_000 1-0050/sb _ 49 _ cfa _2...
Below- market leasing or licensing of real
property.
Below-market sale or conveyance of real property.
Tax incentives, exemptions, credits, rebates,
reductions, or moratoria.
Acquisition of real property.
Reimbursement or forgiveness of fees.
Tax exempt financing.
SB 49 defines "market area" as either:
A geographic area that is recognized by the
National Football League as the territory for a
professional sports franchise or,
Any larger geographic area that is described in
publications of bond rating agencies or independent
and reputable sports market research organizations as
the relevant market for the professional sports
franchise.
SB 49 limits the size of a market area to an area not
exceeding 75 miles, as measured by the most reasonable
route on roads between two points, starting from the sports
stadium from which the franchise is relocating and ending
at the new stadium to which it is relocating.
SB 49 exempts local agencies from the prohibition on
providing public financial assistance to a stadium project
if the governing legislative body of a home local agency
adopts a resolution declaring that the community does not
object to the relocation of the NFL franchise.
SB 49 grants a home local agency the right to assert a
violation of its provisions as a claim or defense in a
judicial proceeding and to obtain injunctive or declaratory
relief to enforce its provisions.
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Comments
1. It's hard to say no Faced with fans' exuberance and
the hunger for the civic pride associated with professional
sports, it is hard for local officials to resist the siren
call to subsidize professional sports stadiums. Despite
substantial evidence that NFL stadiums produce few of the
economic benefits that are frequently used to justify
public subsidies, since 1992 17 new NFL stadiums have been
- or are currently being - constructed with public
financing totaling more than $4 billion. SB 49 protects
precious public funds by preventing local governments
within a market area from engaging in bidding wars for NFL
franchises.
2. Let locals make the call Despite the immense
pressures that can be brought to bear upon them, local
elected officials are ultimately accountable to their
voters. They should be free to decide, through an open and
deliberative process, that it is in their communities'
interests to subsidize sports stadium projects. The
Legislature should not preclude local communities from
determining their own willingness to pay for professional
sports facilities, whether subsidies are offered to keep a
beloved team from moving away, to bring a beloved team back
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SB 49 Senate Bill- Bill Analysis
http://leginfo.ca.gov/pub/07.08/billlsenlsb_0001-0050/sb _49_ cfa_ 2...
to a city that it left, or to lure a soon-to-be beloved
team into town.
3. Competitive imbalance Like many private businesses,
NFL franchises attempt to attract public subsidies.
However, NFL franchises are more powerful than their retail
counterparts in at least two crucial respects:
NFL franchises can draw upon the deep and
passionate loyalties of their fans to mobilize public
support in a way that few other businesses can.
The structure of the NFL allows it to exert near
monopoly power over the market for professional
football in the United States.
Recognizing these differences, SB 49 advances the precedent
set by the 2003 Torlakson bill, adapting existing law to
block Santa Clara's attempt to attract the 4gers.
4. Level playing field ? SB 49 allows Los Angeles and
other cities which are more than 75 miles from at least one
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of California's three NFL markets to offer relocation
subsidies to NFL franchises. The Committee may wish to
consider whether legislators should stop all California
communities from using public funds to lure an NFL
franchise away from another city in the state.
5. Home field advantage SB 49 prohibits public
relocation subsidies for NFL franchises moving away from
their host cities, but places no restrictions on host
cities' offering public financial assistance to keep
franchises. The Committee may wish to consider why
legislators should distinguish between public financial
assistance provided to an NFL franchise by its host city as
opposed to other California local agencies.
6. Interstate rivals SB 49 keeps some California local
governments from using public funds to compete with one
another to host NFL franchises, but doesn't keep
governments outside of California from offering subsidies
to draw teams away from California. The Committee may wish
to consider whether SB 49 unilaterally disarms California
cities against their out-of-state competition, making it
more likely that California's NFL teams will move away from
their current host cities.
7. Special teams ? SB 49 applies only to California's
three NFL teams. California hosts five Major League
Baseball teams, four National Basketball Association teams,
three National Hockey League teams, and a number of other
professional sports franchises. As demonstrated by the
Oakland A's recent plans to move to Fremont, the threat of
franchise relocation within a market area is not limited to
NFL teams. The Committee may wish to consider why the
Legislature should limit relocation subsidies only for NFL
franchises.
8. Previous legislation SB 49 is not the first bill to
address the relocation of sports franchises. AB 2805
(Ridley-Thomas, 2004) prohibited the state Infrastructure
Bank from approving an extension for the Hoover
Redevelopment Project Area if it directly or indirectly
results in a California professional sports team relocating
into the project area. AB 3003 (Kehoe, 2004) would have
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SB 49 Senate BiU - Bill Analysis
http://leginfo.ca.gov/pub/07.08/biWsenlsb_0001.0050/sb _49_ cfa _ 2...
required mitigation payments from one city to another when
a professional sports team moved within California. AB 338
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(Sweeney, 1997) and AB 526 (Vincent, 1997) would have
required local communities to be notified whenever a
professional sports team received an offer to relocate to
another city and would have allowed for damages to be
collected from any person who interfered with a contractual
relationship between a local entity and a sports franchise
and enticed the franchise to break a sports facility
occupancy agreement.
9. Double-referral The Senate Rules Committee has
ordered a double-referral of SB 49 back to the Rules
Committee.
10. Technical amendment One part of the bill grants a
home local agency the right to obtain injunctive or
declaratory relief to enforce the bill's provisions.
Another provision grants a right to "injunctive,
declaratory, or other appropriate relief." The Committee
should eliminate the reference to "other appropriate
relief" and make the two provisions identical.
Support and Opposition (3/1/07)
Support American Federation of State, County, and
Municipal Employees (AFSCME) and Franchise of Americans
Needing Sports.
Opposition : San Francisco 4gers, County of Santa Clara,
City of Monte Sereno, City of San Jos?, City of Sunnyvale,
Bay Area Council, San Jose Sports Authority, Silicon Valley
Leadership Group, and 735 individuals.
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