Santa Clara city leaders said Friday the 49ers, who reside in a shiny new football palace within city limits, the one which just played host to Super Bowl 50, withheld more than $5 million in rent since December, according to a report from the Mercury News,
Now, the team is pushing for lower rent, or a “rent reset,” according to the report.
The reset allows the agreed upon rent between the team and the city to be adjusted based on outstanding debt, revenue and changes in operating costs. While those talks are still ongoing, according to City Manager Julio Fuentes, the Niners have met their contractual agreements, and the team insists its paid off their outstanding rent debts. Santa Clara mayor Lisa Gillmor, who was appointed to the position after Jamie Matthews abrupt retirement just one day after the Super Bowl, said she’s not convinced.
“I’m going to ask the city is made whole for their contractual obligations,” Gillmor told the Mercury News. “It needs to be paid.”
Gillmor added that any discussions between the city and team pertaining to rent changes or contract, will be open sessions, because it’s “public money.”
“It was mentioned they had apparently reset their own rent without our approval,” she said. “But I want every penny accounted for and delivered as per the contract.”
Bob Lange, vice president of communications for the 49ers, told the Mercury News that the team has “made all required lease payments.”
“Even after adjustment, the 49ers will pay rent that is more than two times higher than the next highest rent paid by any of the other 31 NFL teams,” Lange said.
The Niners weren’t sent a delinquent notice for their back rent, and also were not charged any interest on the unpaid amount. Santa Clara’s city council will meet to discuss the “rent reset” on Tuesday.
According to Fuentes, the rent payments from the team to the city provides revenue for the Stadium Authority. Essentially, the rent price is dictated by how much money is in the bank, and whether it’s enough to keep the lights turned on. For the three months the team withheld payment, there was enough cash-on-hand to cover stadium expenses, according to the report.
The two sides have held months of turbulent discussions over how much the team should pay in rent next year — Niners management agreed to pay $24.5 million per year for the first two years, however, the contract includes a clause which allows the team a one-time “rent reset.” The clause provides accommodation for changes in revenue and other costs and expenses.
Now, Niners team management is asking for a rent price of $20.25 million. City management is unsure if the figure is enough to compensate, and are asking for the full rent amount to be agreed upon just to pass a fiscal budget, after which the negotiations will continue, according to the report. Santa Clara owns Levi’s Stadium, and the land it sits on, and have collected $19 million from the team this year.
David Barclay is the 49ers Insider for byteclay.com. Email: email@example.com, Twitter: @DJamesIII