The marriage between the San Francisco 49ers and the city of Santa Clara didn’t take long to grow contentious. A disagreement over how much rent the team should pay could require outside arbitration, according to San Jose Inside.
Mayor Lisa Gillmor and her City Council colleagues say the Niners, without notice, hacked off $5 million from their rent payment since December. The team argues it’s entitled to a “rent reset” based on debt, revenue and a flux in operating costs. The council on Tuesday unanimously voted to kick off a process that could result in formal arbitration.
The 49ers have only been playing in Santa Clara’s Levi Stadium since 2014, so you wouldn’t think the agreement would have run into such serious trouble already, but here we are.
Basically the Niners’ contract with the city demands that it pay $24.5 million a year to use the stadium, but the team sent only $19 million at the end of 2015. According to San Jose Inside, the 49ers want to lower the rent to $20.5 million a year, while the city won’t budge from the agreed-upon $24.5 million. After a decision by the Santa Clara city council, the sides will now have 15 days to settle this on their own before a mediator is brought in to resolve the dispute.
Gillmor said she welcomes mediation because it means negotiations will play out publicly. Plus, she said, it will force both sides to tackle assumptions about future operating costs, revenue, building license payoff and other expenses that factor into the lease agreement.
“I’m very comfortable with this decision,” she said.“I think it needs to be out of our hands and in the hands of a third party in order to come to a fair and reasonable conclusion. We have to. This decision is very, very important in terms of where this is set for 40 years. We have to protect the city’s interest.”
If this is year three of the 49ers-Santa Clara marriage, we can only imagine what year 20 will look like.
