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Levi’s Stadium audit alleges Santa Clara owed millions

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Team denies everything; mayor threatens to seize stadium

Levi’s Stadium, full of fans during a game. Jim Bahn

On Monday, Harvey Rose Associates, a San Francisco-based management consulting company, released its audit of Santa Clara’s Levi’s Stadium, trying to suss out whether or not the 49ers held up their end of the deal with the city over the $1.3 billion venue.

The Rose report (provided here by the San Jose Mercury News) aimed to “ensure compliance with Measure J,” the 2010 ballot measure that cleared the way for stadium construction with 58.2 percent of the vote in Santa Clara County, checking to see the stadium and football franchise owed anything on the deal.

The report, signed by Harvey Rose Principal Fred Brousseau, concluded that Santa Clara came up short nearly $2 million. Among the alleged lapses:

  • “We estimate that at least $229,239 of City staff time was spent on Stadium activities during the audit review period but not reimbursed by Stadium sources. As a result, the City’s General Fund covered Stadium costs in violation of Measure J.”
  • The report notes that more than half of that staff time debt is already paid back, but that there are still “$114,781 in net unreimbursed costs.”
  • To expand parking capacity, the city agreed to let the stadium use Santa Clara Gold and Tennis Club property for overrun parking. But “city records show that for the last five months that the property was used, [the stadium] did not pay its fees,” according to Brousseau, meaning “the city has been paid $718,803.”
  • The audit also claims that “construction fund monies totaling $894,228 were used [...] to cover public safety costs that were not part of a budget approved by the Stadium Authority and were not reported” and now are owing too.

Brousseau and company also allege that the team and stadium didn’t give his office access to all of the records it needs to determine any other liabilities.

The shortfalls add up to more than $1.72 million in total. The audit also criticizes the city’s Stadium Authority, saying it has “not established adequate internal controls” over stadium business.

If true, the financial fracas could be serious business for both Santa Clara and the 49ers. Back in October, Deadspin reported:

Santa Clara mayor Lisa Gillmor has concerns that the city is not being properly reimbursed for expenditures and is getting less than its fair share of money from the stadium’s special events. Gillmor has now warned the 49ers that Santa Clara will take control of the stadium if the team cannot prove how taxpayer dollars are being spent.

This audit was supposed to settle the matter, but now it looks like there might be a lot more to settle up about. For their own part, the 49ers deny the whole thing.

Team lawyer Hannah Gordon (responding to an earlier, leaked draft of the audit) claims that the amount owed is inflated and that the team would have given Brousseau access to more records but that the auditors “refused to meet to discuss, choosing instead to move forward with its report and repeat false accusations.”

Gordon claims that the Niners actually overpaid the city $1 million in the parking dispute and may be owed money back instead of the other way around and that the construction fund money was included in the stadium’s original budget.

Matthew Roth