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Santa Clara, 49ers settle lawsuit over Levi’s Stadium management

Bringing a dramatic end to an acrimonious and long-running legal battle, Santa Clara has agreed to a settlement with the San Francisco 49ers that lets the team continue to manage the publicly-owned Levi’s Stadium.

On Tuesday evening, Santa Clara City Council members emerged from a reportedly tumultuous closed-session meeting where they discussed the litigation with “no reportable action,” according to interim city attorney Steven Ngo. But on Wednesday afternoon, representatives of the two parties confirmed they had reached an agreement with the 49ers upping an offer they had previously called the team’s “best and final.”

Ngo could not immediately be reached for comment.

The settlement concludes the 2019 lawsuit filed by the 49ers against the city over the council’s decision to remove the team as the manager of non-NFL events at Levi’s Stadium. At the time, council members raised concerns that the team wasn’t complying with state wage and conflict-of-interest laws and alleged that the 49ers overstated the team’s management abilities.

FILE PHOTO — Fans watch opening act Cole Swindell perform at Levi’s Stadium in Santa Clara, Calif., on Saturday, May 2, 2015. Levi’s Stadium hosts its first live concert as county music stars Kenny Chesney and Jason Aldean merge their two current tours, “The Big Revival Tour,” and “The Burn It Down Tour,” to headline the show. (Anda Chu/Bay Area News Group) 

In the years since, the two sides have exchanged bitter public recriminations about backroom dealing and the impact of stadium management on everything from neighborhood noise levels to the ability of the stadium to bring in name concert acts such as The Weeknd and Beyoncé. The tussle has dominated city politics, with team owner Jed York sinking millions of dollars into council races and electing three of his four chosen council candidates in the last city election.

Last week, the team increased a previous $3.3 million proposal by $700,000 to cover interest costs and a new accounting system — both at the request of the city. The team added another $325,000 to the pot on Tuesday.

The 49ers will pay $1.675 million directly to the city’s general fund. There will also be a $650,000 transfer from the Stadium Authority’s discretionary fund to the general fund, as well as an additional $650,000 from the Stadium Authority’s discretionary fund to its operating fund. The 49ers will also waive $350,000 in accrued interest and pay $2 million for public safety costs.

SANTA CLARA, CALIFORNIA - AUGUST 27: The Weeknd performs on stage at Levi's Stadium in Santa Clara, Calif., on Saturday, Aug. 27, 2022. (Jose Carlos Fajardo/Bay Area News Group)
SANTA CLARA, CALIFORNIA – AUGUST 27: The Weeknd performs on stage at Levi’s Stadium in Santa Clara, Calif., on Saturday, Aug. 27, 2022. (Jose Carlos Fajardo/Bay Area News Group) 

“Today’s agreement represents the beginning of a renewed partnership between the 49ers and the City of Santa Clara,” 49ers spokesperson Rahul Chandhok told this news organization. “We’re pleased to put this fight behind us for the benefit of Santa Clara’s residents and the stakeholders who rely on Levi’s Stadium for jobs, revenue, and entertainment.”

In an interview, Councilmember Anthony Becker called the agreement “fair” and said it would move the city’s relationship with the 49ers in a “positive direction” — especially at a time when the city is in dire straits with its finances.

“We took away a lot of litigation that was costing our residents a lot of money,” Becker said of the lawsuits settled between the city and the team this year. “We have a 27 million dollar deficit. When the mayor often talks about giving sweetheart deals to the 49ers, I think she was really trying to give sweetheart deals to the attorneys.”

The 49ers had claimed last week’s offer was worth $13 million, but a majority of the value — $8 million — assumed a reduction in litigation costs at a rate of $2 million per year for four years.

The assumption was enough for Mayor Lisa Gillmor on Tuesday to call for an “independent review of what this proposal means for our community.”

Many members of the community seemed to feel the same way, as a petition called “Stop the 49ers Back Room Deal with the Santa Clara City Council” garnered over 200 signatures ahead of the meeting and asked for “independent experts” to review the settlement.

“It’s irresponsible for us to accept financial numbers from the team when they have never been open and transparent with the city about their accounting,” Councilmember Kathy Watanabe said. “We owe it to ourselves and the public to act with good and honest information.”

A motion made by Watanabe to discuss the settlement in open session and conduct an independent analysis of the numbers failed 4-2, with Vice Mayor Suds Jain and council members Anthony Becker, Karen Hardy and Kevin Park opposing the idea. Councilmember Raj Chahal was absent.

“We can’t talk about this in public,” Becker said of his vote. “This is not an episode of The People’s Court, and the mayor is not the judge.”

Taylor Swift performs during her 2018 Reputation Stadium Tour stop at Levi's Stadium in Santa Clara, Calif., on Friday, May 11, 2018. (Anda Chu/Bay Area News Group)
Taylor Swift performs during her 2018 Reputation Stadium Tour stop at Levi’s Stadium in Santa Clara, Calif., on Friday, May 11, 2018. (Anda Chu/Bay Area News Group) 

Becker, who is challenging Gillmor’s re-election bid, had a heated public exchange with the mayor on Tuesday, accusing her request for an independent review of the settlement of being “political theater.”

Gillmor told the San Francisco Chronicle that Becker’s “verbal attack and irrational behavior” escalated once they went into closed session. Becker allegedly yelled “F– you!” at Watanabe, made an obscene gesture and started “verbally assaulting” the mayor, she said. Gillmor said she called the police but was unsure if she would file a police report against him.

Becker declined to comment on the allegations.

Residents, business owners and even former council members also joined the battle Tuesday night, with some accusing the 49ers’ York of trying to influence the decision by buying Facebook ads that threatened the end of concerts at Levi’s Stadium if the two parties didn’t settle. Others begged the council to put an end to the saga for the sake of the city.

Chris Sullivan, the general manager of the Santa Clara Marriott, said that events at Levi’s Stadium are critical to hotels’ ability to stay afloat, especially as they recover from the economic impacts of the COVID-19 pandemic.

“What the 49ers are doing at Levi’s Stadium is phenomenal,” Sullivan said. “By allowing these concerts to take place, it impacts so many more people beyond the hotel community.”

Jain and Park declined to comment on the settlement agreement. Gillmor, Hardy and Watanabe could not be reached for comment.

The stadium management lawsuit was the last piece of litigation between the 49ers and Santa Clara, who have been locked in legal battles for years now. There are two mediated disputes that have yet to be resolved, but those are expected to be finished by the end of the year, according to Chandhok.

The 2019 lawsuit was the second piece of litigation settled between the 49ers and Santa Clara this year. In February, the team paid the city $325,000 over a 2018 lawsuit it filed against the city. In it, the 49ers claimed it had overpaid more than $1 million for parking at the city-owned golf course near the stadium.

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