49ers hope to keep the state's hands off stadium money with new plan - Ingles

After months of trying to keep the state's hands off the millions of tax dollars needed to fund a new 49ers stadium, Santa Clara has finally found the answer -- albeit one with a hefty price tag.

The new plan, expected to be approved Tuesday, would allow the city to keep its redevelopment agency after paying the state $11.2 million this year and $2.7 million each year after that.

That should solidify what had been a squishy part of the plan to fund the stadium, but because the state will be taking its cut of the redevelopment agency's proceeds, the city may need more time to pay the 49ers its share of the project.

The City Council on Tuesday is expected to approve the city manager's recommendation to "opt in" to the state's new optional redevelopment agency plan. The move allows Santa Clara to hold onto its precious property tax revenue, much of which is aimed at the stadium, but requires the city to reimburse the state for a share of the income the governor and Legislature are demanding.

The new plan, then, will yield the city less redevelopment money than it used to -- but officials say it's better than nothing.

"It's not ideal but to opt in is still the best way to go," said Pam Morrison, the administrative analyst to the Santa Clara city manager. Because "if the redevelopment agency goes away altogether, then it's questionable what we'll be able to do at all."

It's a backup plan, as cities across the state wait for a California Supreme Court ruling on whether the state's plan to charge cities for redevelopment revenues is legal. The court agreed last week to hear the case and expects to make a ruling by Jan. 15.

Of all the elements of the plan to fund the $987 million stadium next to Great America, perhaps the most confusing and uncertain had been the $40 million portion that city voters approved from the redevelopment agency.

The city already gave the 49ers $4 million from its redevelopment bank account and expected to give the team the rest as the agency collected more tax revenues over the years.

But then Gov. Jerry Brown and the Legislature killed all redevelopment agencies this summer to divert some of the money that the agencies collect to schools and local governments. The law, however, allows cities to keep their agencies if they reimburse the state for their share of the money, which is exactly what Santa Clara and several other cities such as Cupertino are now doing.

After paying debts for past construction projects, the city has about $5 million in redevelopment revenues left to spend in a typical year. That will shrink by about half after the payment to the state.

"It would be more difficult (but) if we don't opt in, we have absolutely no opportunity to do any redevelopment," Morrison said.

The 49ers said the team would work with the city to figure out a repayment plan.

"In a project of this size and financial complexity, it's going to require some flexibility to see it through," team spokesman Steve Weakland said. This article was written by Mike Rosenberg and appeared in The Contra Costa Times.