49ers offer millions to settle Santa Clara lawsuit

One of the biggest legal battles between Santa Clara and the San Francisco 49ers could be coming to an end.

The football team sued the city in 2019 after councilmembers voted to remove the team as the manager of Levi’s Stadium during non-NFL events—a controversial decision that marked the latest blow in a contentious, high-profile fight. Now, nearly three years later, a confidential document obtained by San José Spotlight shows the team is offering a $3.3 million immediate payment to Santa Clara to settle the ongoing litigation. The money could be used for police, fire and other basic needs.

The settlement offer includes a one-time $650,000 payment to the city, in addition to another $650,000 from the Stadium Authority’s discretionary funds to settle the lawsuit. The Stadium Authority is a board made up of city councilmembers that oversees the stadium. The team would also agree to pay $2 million for public safety costs related to the stadium.

The Santa Clara City Council is expected to consider the settlement terms in closed session at a future meeting.

“We’re currently in discussions with city staff on a settlement that would inject millions directly into the general fund and avoid millions in future legal fees,” 49ers spokesperson Rahul Chandhok told San José Spotlight.

The settlement terms also call for forgiving $350,000 in interest the Stadium Authority allegedly owes the team for unpaid costs related to stadium operations.

Team officials say the city’s move to terminate the 49ers’ management of the stadium is politically motivated and reckless. Their lawsuit contends the city violated a longstanding contract that gave the 49ers the right to manage the day-to-day events at the stadium. The 49ers and its stadium management company, known as StadCo, employ more than 100 full-time and 700 part-time employees to help manage the facility, according to the suit.

Chandhok said Tuesday the city has already wasted $8 million on legal fees and consultants related to the suit, and accepting the settlement terms would avoid wracking up more legal fees and save taxpayer dollars. Should no settlement be accepted, the losing side of the lawsuit would be responsible for both parties’ attorney fees.

“Mayor Gillmor has a track record of wasting taxpayer dollars on failed litigation, like her $6 million fight against voting rights, driving the city into a $27 million deficit,” he said. “Prolonged legal fights only benefit the lawyers, and we hope the city will take this significant step to restore this partnership and focus on generating revenue from the stadium.”

Gillmor could not immediately be reached for comment.

The city and its NFL team have been meeting behind closed doors for months to hammer out the settlement terms.

The city’s decision three years ago to terminate the team’s management of the $1.3 billion stadium came after officials raised concerns about dwindling revenues from events at the facility, and questioned whether the team has been transparent in its procurement procedures. The team blamed the drop in revenue on the city’s live events curfew—what they dubbed a “music ban.”

Team leaders say they’ve already made changes to improve management practices, including overhauling the stadium’s accounting system, strengthening procurement procedures and lifting the 10 p.m. nightly curfew on live music that cut into revenue and discouraged major artists from performing there.

Santa Clara and the 49ers have publicly battled for nearly a decade now—over everything from concert curfews to the rent the team pays.

Councilmember Anthony Becker says residents are fed up and it’s time to move on from the legal fights.

“When I speak to my residents about what their concerns are, they want us to stop fighting and spending legal fees,” he told San José Spotlight. “The only people that are winning out of this whole thing is the lawyers. Residents are not winning. I’m in favor of reducing Mayor Gillmor’s $27 million deficit and her wasteful spending on outside consultants and lawyers.”

The money wasted on legal fees, Becker said, could’ve helped fund the city’s fireworks show or upgrades to city buildings.

“There are a lot of things we lose out on because we decide to waste our money on litigation on multiple fronts,” he said.

Contact Ramona Giwargis at [email protected] or follow @RamonaGiwargis on Twitter.