The San Francisco 49ers (NFL) lost a Levi’s Stadium rent appeal, and instead of seeing an annual reduction of $4.25 million, will end up paying $262,000 more yearly to the Santa Clara Stadium Authority.
In March 2016, the 49ers requested an annual rent payment reduction of $4.25 million, from $24.5 million to just $20.25 million per year. The Santa Clara City Council unanimously refused the reduction and the 49ers filed for arbitration to decide the issue. In a final decision, the arbitrator decided against a rent reduction and instead increased the rent by approximately $262,000 each year. In addition to the rent increase, the Stadium Authority will receive back pay for rental payments owed, attorneys’ fees and costs, and future increased rental payments.
“The City is very pleased with the outcome as it is in the best interest of the city, residents, and Stadium Authority,” said Mayor Lisa M. Gillmor in a press release issued by the city. “The arbitration award victory for the Stadium Authority is a complete vindication of the Stadium Authority’s decision to reject the 49ers’ rent reduction demand. The 49ers’ request to reduce their rent by $4.25 million per year has instead resulted in an annual increase of approximately $262,000. We hope the 49ers will work with us, not against us, and see that we can be good partners if the team will work cooperatively with the public.”
According to the city, the increased annual rent will allow the Santa Clara to maintain its accelerated pace of paying down debt on the stadium, and the additional funds awarded will also allow for necessary capital reserves to accumulate. Had the Stadium Authority not prevailed, public debt would have taken longer to pay off while the 49ers enjoyed less rent for a publicly-owned facility.
“Unfortunately, the 49ers have a record of withholding documents and payments from the Stadium Authority. Midway through this dispute, the 49ers discontinued rental payments. On behalf of the Stadium Authority Board, we will work to ensure timely payment of these public funds owed to the Stadium Authority and continue to hold the 49ers accountable to the public and Stadium Authority for issues important to Santa Clara,” Gillmor added.