Originally appeared in the San Francisco Business Times
By Ron Leuty
Quicker payoffs on fans' seat licenses and lower construction costs for Levi's Stadium accelerated payoff of public debt on the nearly $1 billion home of the San Francisco 49ers.
The report from Santa Clara city officials Tuesday night comes as Oakland and Alameda County leaders debate whether taxpayers should be on the hook at all for a projected $1.5 billion stadium for the Oakland Raiders.
Santa Clara voters in 2010 approved Measure J, which dictated that no general fund money and no new taxes be levied on residents to pay for the stadium.
In all, the final construction bill on Levi's Stadium will be $930 million, or more than $80 million under budget, Santa Clara finance director Gary Ameling said. The lower figure was due mainly to good project management and favorable weather, he said, but 49ers officials added that the project also benefitted from lower financing costs due to a favorable interest rate environment and competitive subcontractor pricing coming into a joint venture betweenTurner Construction Co. and Devcon Construction Inc.
Turner-Devcon reportedly faced a penalty of $6 million for each 49ers game missed, with daily hits of up to $20 million, if construction on the 68,500-seat stadium failed to hit an August 2014 deadline.
“All the credit in the world for the success of the Levi’s Stadium project goes to the workers and subcontractors who did quality work and did it right the first time," 49ers project executive Jack Hill said in a prepared statement. "Their efforts, along with the decision to use the design-build delivery method to increase construction efficiency, were crucial components to reducing the construction timeline by one year and keeping the project well under budget.”
While the 49ers suffered on the field during the team's first year in Levi's Stadium, more fans than project leaders estimated opted to pay off "stadium builders licenses," or SBLs, before the stadium opened, Ameling said.
SBL sales through the Santa Clara Stadium Authority, which includes rights to purchase 49ers season tickets and other stadium events, originally were pegged at $503 million. Sales came in at $531.5 million, Ameling said.
SBL holders can pay off the licenses over 10 years.
The combination of lower costs and higher revenue allowed the authority to more quickly pay down its debt on Levi's Stadium, Ameling said. Term loans of $450 million, for example, were budgeted to fall to $349.8 million, he said, but will end the authority's April-through-March fiscal year at a projected $317.6 million. Likewise, a $500 million subloan from 49ers Stadium Co., or StadCo, was expected to be paid down to $226.2 million but instead will reach $182.8 million.
Money that didn't have to go toward construction instead was used to pay off debt, Ameling said.
In all, the authority's total expected stadium debt of $1.01 billion will fall to $553.2 million as of March 31, compared to a projected $628.8 million.
Santa Clara City Manager Julio Fuentes called the stadium financials "a huge, huge success."
"We are making incredible progress," Fuentes said.
Levi's Stadium hosted more than 200 events during its first year, Ameling said.