49ers give Santa Clara ‘best and final offer’ in legal fight

The San Francisco 49ers are offering Santa Clara a deal that would pour millions of dollars in city coffers, a last ditch effort by the NFL team to end litigation that’s dragged on for more than two years.

The effort is the team’s “best and final offer,” and would add $18 million to the city’s general fund over the next two years, according to a letter obtained by San José Spotlight, in addition to increasing the team’s payment to cover public safety costs for events at Levi’s Stadium. For years, city officials have claimed the team hasn’t been paying its fair share of public safety costs, and the letter says this offer would end the ongoing arbitration. The city has until April 19 to respond to the offer.

Stadium Compliance Officer Larry MacNeil sent the letter on March 20 to the Santa Clara Stadium Authority, a governing body made up of members of the Santa Clara City Council.

“The purpose of this letter is to underscore the advantages to the parties of resolving these matters, describe some of the benefits that the city stands to gain, and to offer our perspective on why certain members of your Board will continue to actively undermine any settlement, no matter the terms,” the letter reads.

City Manager and Stadium Authority Executive Director Jovan Grogan acknowledged the message and said the stadium authority’s legal team has engaged with the 49ers in good faith over the past few months. He said he anticipates the stadium authority will review the proposal in a closed session within the next few weeks.

“At present, staff is analyzing the proposal and its alignment with progress made by both parties during confidential settlement negotiations,” Grogan told San José Spotlight. “The 49ers decision to issue a ‘best and final offer’ appears to be an effort to accelerate resolution of the issues.”

Grogan declined to comment on the proposal’s specifics, including whether it would generate $18 million for the city.

This case went directly to arbitration, so there are no public documents detailing the claim or arguments.

The proposal’s specifics, including how much the team’s costs would increase, are unknown, but the letter mentions increasing the public safety cost threshold the team pays and building a system for the city to receive more revenue from non-NFL events. The letter says these changes are only possible through a settlement, and an arbiter or judge cannot change the existing contract.

The two sides have been locked in a series of contentious battles, including over the team’s rent and curfews for concerts at the $1.3 billion stadium. The most prominent fight began in 2019 after the city council voted to remove the team as manager of non-NFL events. The 49ers sued, saying their longstanding contract with the city gave them the right to manage the stadium’s day-to-day operations, including during non-NFL events.

That was a separate lawsuit with the 49ers settled in August 2022 that included $2 million from the team for disputed public safety costs and $8 million savings in “future litigation costs” over the next four years.

The letter recaps the team’s rocky relationship with Mayor Lisa Gillmor, an outspoken critic of the stadium in recent years, who has led the charge by raising the 49ers’ rent for the stadium and getting in fights over stadium operations, late night noise curfew and financial management.

Gillmor did not respond to a request for comment.

The letter alleges Gillmor worked against residents’ best interests by impeding the stadium’s ability to attract events, creating false concerns about the money generated by the stadium and spending unnecessary taxpayer dollars on litigation.

Since it was built in 2014, Levi’s Stadium has brought $2 billion into the local economy, according to a study commissioned by the 49ers. Concerts and other non-NFL events last year poured millions into the area alone.

“In FY23, we are on track to deliver over $9M for the (stadium authority) in net revenue and ticket surcharges, marking another history year,” the letter reads. “After hosting two of the most successful event seasons in the stadium’s history, Mayor Gillmor can no longer claim the 49ers don’t book profitable events.”

Contact B. Sakura Cannestra at [email protected] or @SakuCannestra on X, formerly known as Twitter.