San Francisco 49ers sue Santa Clara over management dispute at Levi’s Stadium

The San Francisco 49ers have filed a suit against the city of Santa Clara following a vote by city officials to remove the football team as the manager of Levi’s Stadium during non-NFL events.

That filing, known as a request for declaratory relief, was submitted Friday to the Santa Clara Superior Court. In it, the team claims it was “forced to bring this action,” alleging the city and the Santa Clara Stadium Authority —  a board made up of city councilmembers — violated a longstanding contract that gave the 49ers the right to manage the day-to-day happenings at the stadium, NFL-related or not.

“The suit was necessitated by the public confusion caused by Mayor (Lisa) Gillmor, the city attorney and City Manager (Deanna) Santana’s complete misunderstanding of the management agreement,” Rahul Chandhok, a spokesperson for the NFL team, said in a statement Friday.

Santa Clara city leaders this week announced they’d given the 49ers until Nov. 15 to turn over management duties for non-NFL events at Levi’s Stadium. The city’s decision 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 city also noted this week the team did not pay the appropriate hourly rates — known as prevailing wages — to employees of contractors at the stadium, resulting in $85,000 in unpaid wages on a recent contract. Officials said they are skeptical that the team has turned over all the documents requested by the city to audit past contracts and ensure similar errors hadn’t happened before.

All of that, city officials said, was enough to prove that the 49ers couldn’t be trusted to manage the $1.3 billion stadium.

“We terminated the 49ers’ non-NFL events agreement because we discovered fraud and wage theft,” Gillmor said in a statement Friday night. “They mismanaged a public facility. Profits plunged from around $5 million to $0 in two years. And the City’s rules, like the weekday curfew, haven’t changed one bit since 2014.”

The next step in the process to remove the 49ers from their post as everyday managers of the stadium would likely be confidential arbitration between the city and team, Santa Clara City Attorney Brian Doyle told reporters Wednesday. He urged the football team to waive the confidentiality rights during the negotiations so the public could be privy to the conversations.

Now it seems, the 49ers are looking to take the issue to court for a judge to rule on rather than arbitration behind closed doors. Such lawsuit documents and court hearings are generally public.

The NFL team claims in its suit the contract doesn’t allow the city to remove the 49ers as the stadium manager on a partial basis, meaning the city can’t allow the team to maintain control over the football-related events but not anything else, which is what officials have proposed. 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.

“The Management Agreement assures competent, professional, and non-political management and operation of the Stadium by a single manager acting on behalf of both SCSA and StadCo.,” the suit states.

Meanwhile, the 49ers maintain they’ve brought tens of millions to the city over the years through events and other economic impacts. The suit claims city leaders have mischaracterized the turn of events, the reasons for dwindling profits and the management contract itself.

“By attempting to end the management agreement under false and unlawful pretext, thus creating misinformation in the marketplace, the city threatens to take away these economic opportunities,” Chandhok said Friday. “Already declining revenue is a consequence of retaliatory restrictions like the mayor’s music ban that has artists bypassing the Bay Area and leaving local businesses, vendors and residents to suffer.”

Santa Clara has a 10 p.m. curfew for events at Levi’s stadium, which the team has said is an unrealistic rule and serves essentially as a “music ban” because it may scare off large acts that traditionally play music later into the night. The Rolling Stones played at the stadium last month, but played until 11 p.m. and later blamed the city for dysfunction at the event.

City officials denied they were responsible for the confusion leading up to the show, claiming the organizers pulled the incorrect permits and complicated issues themselves.

And on Friday, Councilmember Kathy Watanabe doubled-down on the decision to oust the 49ers for events that aren’t NFL-related and pushed back on the complaints around the 10 p.m. curfew.

They made promises they couldn’t keep! They agreed to the curfew in 2010 as a condition of approval! Then did a bait and switch. We can read the play now. Time for change!

— Kathy Watanabe, City of Santa Clara, District 1 (@KathyDistrict1) September 21, 2019

“They made promises they couldn’t keep,” she said on Twitter. “They agreed to the curfew in 2010 as a condition of approval! Then did a bait and switch. We can read the play now. Time for change!”

Contact Janice Bitters at [email protected] or follow @JaniceBitters on Twitter.