City Takes Out Record Loan to Secure New 49ers Stadium

Santa Clara has decided to be a record setter. Approving an $850 million loan, the City has officially secured the largest, public institution loan for any stadium in the history of the NFL.

The city is now on the hook for 85 percent of the total cost of the facility, and its residents have seen the city approve hundreds of millions of dollars more than was originally anticipated in the process.

But proponents of the plan say that the annual revenues from the stadium could raise as much as $120 million per year in income, before taxes, leaving plenty to pay off the stadium on time. They even project a profit in the deal. But a major portion of the funds intended to repay the loan depends upon receiving money from local hotel taxes, the city’s redevelopment agency, and money from the NFL

From the San Jose Mercury News:

The plan to pay for the 49ers’ new $1 billion home in Santa Clara will rely on the biggest loan to a public agency for any stadium in NFL history.

The revelation added a dose of reality Monday to the euphoria that the team and city had finally found the money to move the beloved football franchise to the South Bay.

Critics and some analysts fear the stadium next to the Great America theme park won’t whip up enough profit to pay off $850 million that the city’s stadium authority will borrow to propel the plan into reality. If the economic assumptions fall short, the 49ers’ new home could wind up bleeding red ink for decades, with interest payments pushing the project’s total debt well beyond $1 billion. That’s about triple the debt that voters were told the city’s stadium authority would take on when they approved the project 18 months ago.

Read the full article here.

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