Committee forwards 49ers’ Candlestick lease amendment after city negotiates early-exit fees and neighborhood payment

The Government Audit & Oversight Committee on Thursday forwarded to the full Board of Supervisors a resolution approving an amendment to the San Francisco 49ers’ lease for Candlestick Park that would allow the team an early-termination option in exchange for guaranteed payments to the city.

Rec & Park assistant director Nick Kinsey told the committee the amendment would grant the 49ers an option to end the lease as early as May 2014. "They would pay the City $1,000,000 in February, regardless of whether or not they exercise that option," Kinsey said, and if the team exercises the option it would make a further guaranteed payment of about $4,295,000. The amendment also lays out a schedule of home-game payments—ranging from small amounts up to about $5,000,000 if they played the entire season and hosted playoff games—that are intended to ensure the city is made whole for lost rental and net revenue.

Supervisor Mark Farrell, who brought the item forward, framed the amendment as a way to protect the city's financial interests and preserve the opportunity to host major events. "Most importantly, San Francisco is going to be forming a joint bid with the 49ers to be the lead city in a Super Bowl," Farrell said, noting an NFL grant and the team’s planned Santa Clara stadium.

Severn Campbell of the Budget and Legislative Analyst’s office estimated that if the 49ers exercised the early-termination option and did not play games in 2014, the city would see a net benefit of about $3,100,000 compared with fiscal year 2011–12 revenues. Campbell said the fiscal impact if the team both exercised the option and played some games could not be quantified at the hearing because the result depends on variables such as number of home games and related costs.

Public comment included strong local reaction. Speakers raised concerns about stadium maintenance, the distribution of neighborhood benefits, and whether the city should do further business with the team. Several residents urged that funds dedicated in the amendment be targeted to communities around Candlestick Park to offset long-standing neighborhood impacts.

Committee members debated whether to insert specific appropriation language in the resolution or to let the normal budget process determine how money is allocated. Rec & Park and other witnesses told supervisors it was their intention that the community payment be spent in neighborhoods surrounding Candlestick Park; the committee agreed to forward the item with that understanding and to work through precise language before the Board hearing.

The committee took the item without objection and forwarded the amendment to the full Board with a positive recommendation. The resolution and any codified allocation language will next be considered by the full Board of Supervisors.