Santa Clara and 49ers Developing Fractious Relationship

Photo Credit: Diane Cordell via Flickr

Photo Credit: Diane Cordell via Flickr

In 2010, when Santa Clara voters approved creating a city-run stadium authority to build an NFL stadium to attract the San Francisco 49ers, politicians patted themselves on the back for getting things done and luring a storied franchise 45 miles south to Silicon Valley. The relocation took place before the 2014 season.

The contrast with Oakland and its inability to come up with a stadium proposal that would keep the Raiders from eyeing other metro areas was clear. Leaders in the cash-strapped city were unable to prevent the Raiders from committing in 2017 to moving to Las Vegas and working with the Nevada state government on a financing plan that should yield a 65,000-seat stadium for the team to begin using in the 2020 season.

But now the narrative has taken a dramatic shift, and it’s Santa Clara leaders who are facing grief in their community over the 49ers’ arrival in town and the impact of the $1.27 billion Levi’s Stadium (pictured), named after the San Francisco company which paid for marketing rights.

What was billed as a win-win situation by team and local officials now looks far more complex. The initial honeymoon has long since given away to a fractious relationship.

The biggest annual strain is over how much the team must pay per season. A complex agreement set the 49ers’ rent and operating fees at $24.5 million for the 2017 season. The 2018 assessment was fought over for months before an arbitratorrecently said the amount should be set at $24.762 million for the coming season, an increase of just over 1 percent.

The ruling contradicted the team’s analysis of baseline rent, stadium operating expenses, debt service and capital reserves. The 49ers argued their total payment should be as little as $16.775 million – a 32 percent cut. The city asked for as much as $25.862 million – a 6 percent increase.

“We want to work with 49ers, not against them,” Mayor Lisa M. Gillmor said in a statement released after the arbitration decision. “Hopefully the team understands that Santa Clara will always put community interests first.”

There have also been squabbles over the city’s 10 p.m. weeknight curfew for events at the stadium, which has the potential to cause headaches for the team, given the regular season games the NFL holds each week on Monday and Thursday nights, as well as the preseason games that are regularly scheduled on weeknights. Some residents respond by citing quality-of-life issues created by team-related traffic.

Personal-seat license fees needed for revenue model

Both the city and the team share concerns over attendance. While the 68,500-seat stadium regularly sells out on paper, Pro Football Talk and other popular NFL websites took to mocking the 49ers last fall after an October game in which the stadium seemed less than half full, pushing ancillary revenues down. An unexpected problem has been the intense heatseen at Levi’s Stadium for several preseason and regular season games.

A five-game winning streak to end the 2017 season raised hopes that attendance will improve going forward. But as Pro Football Talk pointed out, the team and city have reason to be deeply worried about renewals for personal seat licenses, the expensive way that fans can guarantee themselves top seats at games.

The license fees are crucial to the revenue model being used to pay off construction and related debt. Many once-successful teams have struggled to sell PSLs after their fortunes took a turn for the worse.

Meanwhile, the long-shot hope that the Raiders would continue to have a presence in Northern California after their 2020 move to Las Vegas has been dashed. Nevada media outlets recently reported that the team is likely to move its preseason training camp from its longtime base in Napa to Reno that summer.

This article was originally published by CalWatchdog.com

Bay Area home prices: Three counties set new records

http://www.dreamstime.com/-image14115451Not one, but three Bay Area counties set new jaw-dropping records as home prices continued to climb to vertigo-inducing heights.

In February, median prices for resale, single-family homes in Santa Clara, San Mateo and San Francisco counties were the highest they’ve ever been — no small feat in a housing market where prices already are among the most expensive in the nation.

The records, unveiled Thursday in a report by housing data company CoreLogic, suggest no cooling in the red-hot market that’s padding sellers’ pockets while squeezing wannabe buyers and forcing many to leave in search of better deals.

Kevin Cole, president of the Santa Clara County Association of Realtors, called February’s price increases “amazing.”

“It just reflects the ratcheting up of what buyers are able to afford,” he said, “with large down payments, with possibly all cash, with low interest rates.”

In Santa Clara County, the median price for a resale, single family home hit $1.29 million last month — up 34 percent from the same time last year, according to the CoreLogic report. In San Mateo County, the median price reached $1.45 million — up 24 percent, — and in San Francisco it was $1.5 million, up 30 percent. …

Click here to read the full article from The Mercury News

An Economic Win-Win For California – Lower the Cost of Living

A frequent and entirely valid point made by representatives of public sector unions is that their membership, government workers, need to be able to afford to live in the cities and communities they serve. The problem with that argument, however, is that nobody can afford to live in these cities and communities, especially in California.

There are a lot of reasons for California’s high cost of living, but the most crippling by far is the price of housing. Historically, and still today in markets where land development is relatively unconstrained, the median home price is about four times the median household income. In Northern California’s Santa Clara County, the median home price in October 2014 was $699,750, eight times the median household income of $88,215. Even people earning twice the median household income in Santa Clara County will have a very hard time ever paying off a home that costs this much. And if they lose their job, they lose their home. But is land scarce in California?

The answer to this question, despite rhetoric to the contrary, is almost indisputably no. As documented in an earlier post, “California’s Green Bantustans,” “According to the American Farmland Trust, of California’s 163,000 square miles, there are 25,000 square miles of grazing land and 42,000 square miles of agricultural land; of that, 14,000 square miles are prime agricultural land. Think about this. You could put 10 million new residents into homes, four per household, on half-acre lots, and you would only consume 1,953 square miles. If you built those homes on the best prime agricultural land California’s got, you would only use up 14 percent of it. If you scattered those homes among all of California’s farmland and grazing land – which is far more likely – you would only use up 3 percent of it. Three percent loss of agricultural land, to allow ten million people to live on half-acre lots.”

So why is it nearly impossible to develop land in California? The answer to this is found in the nexus between financial special interests, who benefit from asset bubbles, and powerful environmentalist organizations who apparently view human settlements as undesirable blights that should be minimized. In the San Francisco Bay Area, to offer a particularly vivid example, the Santa Cruz mountains are being targeted to be cleansed of human habitation. Instead of creating wildlife corridors, they are eliminating human corridors. Is this really necessary?

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If you are familiar with the San Francisco peninsula, you will see that the area proposed for the “Great Park of the Santa Cruz Mountains” encompasses nearly the entire mountain range. A coalition of environmentalist organizations and government agencies are proposing to create a park of 138,000 acres, that’s 215 square miles, in an area that ought to make room for weekend cabins, mountain dwellers, and vacation communities. Why, in a region where homes cost so much, is so much land being barred to human settlement? The pristine stands of redwoods in Big Basin and Henry Cowell State Park were preserved a century ago. There is nothing wrong with preserving more land around these parks. But do they have to take it all?

This is far from an isolated example. Urban areas in California, primarily Los Angeles and the San Francisco Bay Area, have been surrounded by “open space preserves” where future development is prohibited and current residents are harassed. Ask the embattled residents of Stevens Canyon in the hills west of the Silicon Valley, if there are any of them left. Once you’re in a “planning area,” watch out. Backed by bonds sold to naive voters, endowments bestowed by billionaires, and the power of state and federal laws that make living on any property at all increasingly difficult, the relentless land acquisition machine continues to gather momentum. Anyone who thinks there isn’t a connection between setting aside thousands of square miles in California for “habitat” and the price of a home on a lot big enough to accommodate a swing set for the kids needs to have their head examined.

It doesn’t end with open space that is actually purchased, cleansed of humanity, and turned into government ran preserves for plants and wildlife, however. Acquiring permits to build on any land is nearly impossible in California. Land developers who fight year round to try to build housing for people shake their heads in disbelief at the myriad requirements from countless state, federal and local agencies that make the permit process take not months or years, but decades. And it isn’t just farmland, or wetland, or special riparian habitats where development is blocked. It’severywhere. Even semi-arid rangeland is off limits for housing unless you are prepared to spend millions, fight for decades, and have the staying power to pursue multiple expensive projects simultaneously since many will never, ever get approved.

What is the result? Here is an aerial photo of a subdivision in the Sacramento area, one that every hedge fund billionaire turned environmentalist in California – especially one who runs cattle on his own special 1,800 acre fiefdom in the Santa Cruz mountains on a property that just happens to be in a “non-targeted area” – might consider living in for the rest of his life in order to understand the human consequences of his ideals – cramped homes on 40′ by 80′ lots, at a going price in October 2014 of $250,000. Notwithstanding being condemned to a claustrophobic existence at a level of congestion that would drive rats in a cage to madness, $250,000 is a pittance for a billionaire. But for an ordinary worker, $250,000 is a life sentence of mortgage servitude. And even this, the single family dwelling, is under attack by “smart growth” environmentalists and public bureaucrats who prefer density to having to divert payroll and benefits to finance infrastructure. The excess! The waste! Stack them and pack them and let them ride trains!

Priced to Sell at $250,000 – Housing for Humans on 40′x80′ Lots

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When public employee union leadership talk about the importance of paying their members a “middle class” package of pay and benefits, they’re right. Government workers should enjoy a middle class lifestyle. But they need to understand that the asset bubbles caused by high prices for housing are not only making it necessary to pay them more, but are also creating the inflated property tax revenue that they rely on for much of their compensation. They need to understand that the phony economic growth caused by everyone borrowing against their inflated home equity is what creates the stock market appreciation that their pension funds rely on to remain solvent. And they need to understand that all of this is a bubble, kept intact by crippling, misanthropic land use restrictions that hurt all working people.

There is another path. That is for public employee union leadership to recognize that everyone deserves a chance at a middle class lifestyle. And the way to do that is not to advocate higher pay and benefits to public employees, but to advocate a lower cost of living, starting with housing. One may argue endlessly about how to regulate or deregulate water and energy production, essentials of life that also have artificially inflated costs. But as long as suburban homes consume less water than Walnut orchards – and they do, much less – build more homes to drive their prices way, way down. There’s plenty of land.

Ed Ring is the executive director of the California Policy Center.