Santa Clara and 49ers headed to arbitration over purchasing rights at Levi’s Stadium
A view of Levi's Stadium in Santa Clara. Image courtesy of Janice Bitters

The San Francisco 49ers and city of Santa Clara are in the midst of another legal battle this week, this time over whether the city had the authority to revoke the NFL team’s right to make purchases at Levi’s Stadium.

Santa Clara officials, acting as the city’s Stadium Authority Board, this year effectively revoked the 49ers’ ability to make purchases for the stadium, citing concerns about transparency and whether contractors were being paid the correct rates according to state law.

But the football team has maintained the city doesn’t have the right to change the terms of its contract unilaterally. City officials, meanwhile, insist they have the authority to oversee purchases and contracts before they are finalized. This week, the San Francisco 49ers decided to put the debate to rest and filed a demand for arbitration on the matter, according to City Attorney Brian Doyle.

“I feel compelled to, unfortunately, inform the council that the 49ers have now sued us again,” Doyle told councilmembers Tuesday night during the City Council meeting. “This is number seven for the folks playing at home. … So that is what the 49ers think of your elected officials.”

Representatives for the San Francisco 49ers declined to comment. Neither the team nor city shared the documents with San José Spotlight. Arbitration materials are generally confidential.

The 49ers have long been the manager and operator of the more than $1 billion football stadium, and have historically had the ability to sign contracts or buy goods valued at less than $250,000.

But in September, city leaders took steps to tighten their grasp on the day-to-day management and spending for contracts or supplies at the stadium, where major entertainers often stop to put on a show on their way through the Bay Area.

In two separate votes on Sept. 17, the council agreed to strip the 49ers of its non-NFL-related management duties at the stadium, and to require purchases of any value to first go through the Stadium Authority Board, made up of city councilmembers and the mayor.

The San Francisco 49ers cried foul on both votes and filed a lawsuit in September over the city’s demand that the team hand over the management duties of non-NFL events. That case will be heard in a Santa Clara County Superior Court, though a date has not yet be set.

Meanwhile, city officials’ decision to revoke the team’s ability to make purchases at the stadium without prior approval went into effect this month via a complex maneuver that shifts the longstanding purchasing process for the stadium.

Santa Clara City Manager Deanna Santana points to revenues from recent events at Levi’s Stadium during a press conference in Sept. 2019. Image courtesy of Janice Bitters

Historically, City Manager Deanna Santana has had the authority to make purchases for less than $250,000 at the stadium, but has delegated her authority to sign for such contracts to the football team, per the city’s contract with the 49ers. Lawmakers voted to take away Santana’s power to sign those contracts, meaning she would no longer have the authority to delegate to the 49ers.

The team alleges the city doesn’t have the right to take away its authority to sign contracts, and that the move would “destabilize stadium operations” by not allowing the team to work at the pace of business and that it will slow its response time to emergencies, according to a letter sent to the city by the 49ers earlier this year.

Doyle and Santana have pushed back on that assertion repeatedly.

“You’re not saying you can’t spend any money, you’re just saying ‘show me the contract first,’” Doyle told councilmembers earlier this year. “You’re not in any way depriving them of their right to sign contracts, they simply have to get your approval ahead of time.”

Now, a third party arbitrator will decide who is right. Arbitration is typically faster than a trial, but it’s unclear how quickly the city and football team will meet and reach an agreement.

In response to Doyle’s announcement that the city was heading to arbitration, Mayor Lisa Gillmor didn’t dwell, pausing only to say “alright, that’s unfortunate.”

Contact Janice Bitters at janice@sanjosespotlight.com or follow @JaniceBitters on Twitter.

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