A California lawmaker is sponsoring a bill that would help Santa Clara circumvent the way tax revenues from its former redevelopment agency were allocated after redevelopment ended in the state, in an effort to help build a stadium for the San Francisco 49ers football team.
The bill from Sen. Elaine Alquist, D-Santa Clara, bill would help her city divert $30 million in former redevelopment tax money to build the new $1.2 billion stadium, instead of having it flow to other local agencies in Santa Clara County, according to the Sacramento Bee.
The city had planned to use the money to subsidize the football stadium before its redevelopment agency was dissolved by legislation bringing redevelopment to an end statewide.
Alquist said the redevelopment agency agreement to give the money for the stadium predates the law that dissolved the agency, according to the newspaper.
But a committee put in place to oversee the use of redevelopment tax-increment revenue, following legislation that passed at the end of June 2011 to dissolve RDAs, decided the money should be used for schools, according to the San Jose Mercury News.
That in turn helps the state budget by reducing the amount the state general fund would have to spend to support the school districts.
Santa Clara's redevelopment agency issued $31.5 million of tax-allocation bonds in May, of which $2.7 million was set aside to pay for construction of the new stadium.
The Silicon Valley city of 116,000 has decided to build the stadium in an effort bring the National Football League's 49ers 35 miles south from their longtime home in San Francisco.
Santa Clara has been working for several years on the plans to build a new facility for the team.
The 49ers reportedly spent millions of dollars campaigning to pass a city ballot measure in June 2010 that allowed Santa Clara to subsidize the stadium.
Stadium construction, expected to be completed by summer 2014, relies on an $850 million loan facility to fund the majority of the work.
The project could incur debt up to that amount in the form of a loan or a senior-secured facility from Goldman, Sachs & Co., U.S. Bank, and Bank of America Merrill Lynch.
The 49ers hired Goldman to help them with the deal.
The city has retained KNN Public Finance as advisor, as well as bond counsel Jones Hall.
City officials have said the short-term loan would likely be spun into long-term financing backed by stadium revenues, such as seat licenses and naming rights.
A joint venture between Turner Construction and Devcon Construction will design and build the stadium.