Stadium Issue in Santa Clara

The San Francisco 49ers and the Santa Clara City Council have negotiated a deal whereby the NFL franchise will get a new $937 million stadium with seating for 68,500. The city’s contribution to this is a mere $114 million. A public referendum on the deal, Measure J, will be voted on June 8th. Opinion polls suggest a slight lead for passage of the referendum, but a sizable number of undecideds. Concerns expressed by those polled include traffic issues and whether the city funds could be better used. So how should voters decide?

Perhaps not surprisingly, the Mercury News is in favor of the deal. In urging the citizens to vote for the stadium deal the editorialist notes that Santa Clara would be putting up a mere 12% of the cost, far below the average of 50%. Indeed the stadium will be so beneficial to Silicon Valley that “(i)deally, the entire valley would chip in for the public investment” because “the benefits are definitely regional.”

Nonetheless, the paper notes that opponents make sensible points. The 49ers overstate the size of the rents on the property, simply adding them over time rather than discounting them. Opponents dismiss the construction benefits while the newspaper argues they are substantial, especially in times like these.

The facility will be constructed on a parking lot next to the Great America Theme Park. It also lies close to a rail line and highways. Of course, this proximity to means of departing Santa Clara as soon as the game is over is suggested by the paper as an advantage to the city rather than a cause for concern that there will be little spill over business outside the stadium. In other words, pure financial calculations are conflicting, confusing, and undeniably incapable of producing a definitive choice.

The primary selling point in the Mercury News editorial is “World-class communities have world-class attractions.” I have to wonder which direction the causation runs. Nonetheless, voters are being told that their city is (or will be) world class and that means it must (should) have a world class stadium.

The editorial closes on a reasonable note in urging voters to favor the proposal. “But really, the judgment comes down to whether we want major league sports in Silicon Valley.” That really isn’t the question that voters should ask themselves. As we try to teach even our principles students, it isn’t just what we want, but also what it costs that matters for making choices. So Santa Clara voters ought to ask themselves, “Will my quality of life in Santa Clara be improved in a meaningful way by having the stadium after adjusting for the costs I will bear?” If the answer is yes, then the individual should vote for Measure J. If the answer is no, then vote against it.

So how will the vote go? If I had to bet, I would say it will pass. I am as curious about turnout for the election as I am for the outcome. I expect that for most Santa Clarans the expected utility gains are small, but so are the expected costs, which suggests little reason to vote; that is, low turnout. On the other hand, this is a widely discussed and controversial public issue, which suggests high turnout. June 9th we will know which.

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Author: Dennis Coates

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Stadium Subsidies

2 thoughts on “Stadium Issue in Santa Clara”

  1. It’s very likely the stadium issue will pass…the people of Santa Clara will likely view this as a minimal investment with a virtually guaranteed payoff. I am a huge 49er fan and love NFL football…this stadium is a stupid idea! Candlestick is a very acceptable venue from a fan standpoint…it’s’s reasonably priced (my wife and myself went to 2 games last year and paid less than $200 total…) and cheap to run. I come to the games early..and I personally know MANY season ticket holders..this is not a high roller Dallas Cowboy crowd. They were in shock at the recent ticket hikes…can you imagine????

    A new stadium in Santa Clara will take significant time to complete and will run into the twin difficulties of cost overruns and the risk of a nosedive into a double dip recession/depression. There are many ancillary costs to a city running a 10 game stadium…and modern super-stadiums are very self contained…not many will be going into town to eat.

  2. If this stadium passes, will the 49ers be charging PSLs and high ticket prices for it? In New Jersey, both the the Giants and Jets have not been able to sell all the eats, despite having a 20 year waiting list for season tickets.

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