49ers’ stadium far from Chargers’ reality
The Yahoo Fantasy Football Lounge is bright, stylish just to the point of not being swanky and spacious enough to comfortably hold more than 1,000 people.
Inside, there are many options for those folks to check on their fantasy teams. They can use the touch-screen computers situated around the lounge, take advantage of complimentary Wi-Fi to check their mobile devices at the bar or one of dozens of tables and even monitor the 270 linear feet of ticker scrolling updates on games and individual players.
All while a real live football game is played below them.
The lounge’s floor-to-ceiling windows give way to a section of club seats inside Levi’s Stadium.
But that’s not the Yahoo location that is most significant when considering the miracle of the first new professional football stadium in California in almost half a century.
The headquarters for the tech giant is 4.2 miles away. A little more than 10 minutes using side streets. Close enough they could send an intern over on a bicycle, which he could leave with the Levi’s Stadium bike valet while delivering the check to cover the sponsorship commitment.
Oh, there are cooler features in the San Francisco 49ers new home, which the Chargers visit for a preseason game Sunday.
The rooftop sitting area, wherein 16 different native plants comprise a garden, is perhaps the coolest place you could ever watch a game while partying, at eye level with the stadium’s lights and its two 200-foot video boards. The bamboo counters in many suites, reclaimed redwood that make up some benches, the wide concourses that provide multiple routes to the same spots, give the whole place an open and natural feel. From the field, looking up, the stadium seems more collegiate than professional.
As a whole, the 68,500-seat stadium is as smartly Bay Area as the Dallas Cowboys’ gargantuan AT&T Stadium is oversized Texas.
But that Yahoo lounge, well, that is possibly the most telling about how this stadium got done and appears inevitably headed toward a triumphantly profitable future.
This red, white and beautiful behemoth is a testament to brassy innovation, receptive politicians and the three most important things in real estate. In this case, location, location, location is synonymous with money, money, money.
“It helps to be in the heart of Silicon Valley,” Said 49ers CEO Jed York said this week.
Levi’s Stadium, with its myriad gadgetry and its 1,200 Wi-Fi antennae, is arguably the most high-tech in the world.
More germane to this discussion is that the $1.2 billion stadium was constructed on the might of technology’s mountains of money.
Yes, public money was used in the making of Levi’s Stadium. But just barely, all things considered.
Where plans pointing toward a 2016 ballot measure in San Diego have the Chargers likely asking for a public commitment of about $600 million, Santa Clara’s tab was about $117 million, including a hotel tax.
The NFL contributed a $200 million loan, which has to be paid back.
The Santa Clara Stadium Authority, which is made up of members of the city council but is separate from the city and shielded from the city’s coffers, owns the land on which the stadium sits and secured a construction loan of up to $950 million. Of that, though, the 49ers guaranteed $500 million. The team also fronted another $35 million (to be paid back by the hotel tax) and was responsible for possible cost overruns.
That’s a lot of dough. Theoretically, the DeBartolo-York family, which has owned the 49ers since 1977, could have to sell the team to cover its debt if things went bad.
That didn’t happen. And it was never going to happen.
Not here.
What has happened is that San Francisco-based Levi Strauss & Co. bought the naming rights for the stadium, agreeing to pay $220 million over the next 20 years. Personal Seat License and luxury suite sales topped $800 million.
Obviously, that is not cash in hand, but it is commitments that have eased the burden.
“You’ve exceeded all of our expectations on stadium financing,” Santa Clara Councilwoman Lisa Gillmor said to York, per the San Jose Mercury News, last year when the Levi’s sponsorship was announced.
Looking back, York can’t say he predicted this back when he was going door to door in Santa Clara to solicit support. But neither is he surprised.
“I don’t think people realize how good this market is and how strong the 49ers’ fan base is,” York said.
There were 50 California companies among the Fortune 500 in 2013. Of those, 22 are based in the Silicon Valley.
Seven of those are within a four-mile drive of Levi’s Stadium. The Googleplex, so monumental that it is the place where a $50 billion company and a verb were born, is nine miles by car. Most of the other local Fortune 500 companies are no more than a half-hour away, which in Bay Area traffic means about 10 or 12 miles.
This, certainly, helps make the median income in Santa Clara County highest in the nation at $90,737. Also, according to a study by the U.S. Conference of Mayors released this month, two other Bay Area counties ranked in the top 10.
Really, the odds were stacked heavily in the 49ers’ favor as they embarked on this gamble.
“We were able to play in a very healthy market,” York said. “We felt very comfortable taking the risk, because of the environment.”
When the Spanos family tours Levi’s Stadium on Sunday morning, they’ll be impressed – and, most likely, distressed, because they’ll be standing in a figurative slap in the face.
More than representing hope a stadium can be built in this state, with its strict environmental statutes and stringent requirement of two-thirds to pass a ballot measure calling for public money, what happened here is really just a reminder how far away San Diego is from getting a new stadium.
“It’s a different market,” York said.
The way he raised his eyebrows and softened his voice, it’s not a stretch to interpret the insinuation it might as well be a different planet.
In addition to Silicon Valley’s riches, there is another key factor that played into the 49ers getting their new home built eight years after shifting their focus to Santa Clara (and almost 20 years after York’s uncle, Eddie DeBartolo, began an effort to get a new stadium built in San Francisco).
First, Santa Clara’s government was receptive.
“It takes the right public-private partnership, and we were able to find that in Santa Clara,” York said. “That was a huge piece for us – working with a great municipality that wanted to be a long-term partner and figure out how to solve problems.”
San Diego? We’ve been wringing this out for more than a decade.
Petco Park’s construction was delayed by 17 lawsuits and other political and legal difficulties. Competing factions can’t decide what to do with our convention center. We’re now on our fourth mayor since Dean Spanos began his stadium campaign, circa 2002.
And even if San Diego’s politicians and labor groups and hoteliers can come together on a stadium plan, there are the voters to be convinced.
It all has to fit.
And $600 million, even if the Chargers’ plan calls for no individual taxpayer money, represents quite the puzzle to figure out. Just talking finances, we see the disparate landscape of stadium possibilities.
Fact is, the Spanos family is likely not in a position to take on even a third of the risk the 49ers did.
After the Chargers hit up Sempra Energy and Qualcomm, San Diego County’s only Fortune 500 companies, it’s pretty much the local Indian tribes and a handful of other local business who the team can solicit for suites and sponsorships.
Where Levi’s Stadium has 174 suites that reportedly go for a minimum of $150,000 and, according to a league source, average $200,000 a year, the Chargers’ new stadium would likely have no more than 150 suites and average perhaps $175,000. (At Qualcomm Stadium, the Chargers have 100 suites that sell for an average of $130,000.)
That’s at least $8 million in annual revenue difference between Levi’s Stadium and the Chargers’ hypothetical stadium and doesn’t account for the near-certainty that the Chargers would not be able to sell as many personal seat licenses for anywhere near the cost that the 49ers did. The 49ers’ PSL sales were on par with those of the Dallas Cowboys for their stadium, opened in 2009.
The Dallas Cowboys!
The Chargers aren’t either of those teams.
When it comes to ability and willingness to fund a stadium, San Diego is not either of those regions.
