REPORT TO COUNCIL
SUBJECT
Title
Action on an Initial Grant Funding Agreement with Forty Niners SC Stadium Company LLC to Provide $200,000 Annually in Grant Funding for an Initial Three Years to the Santa Clara Community and Santa Clara Organizations and Approve the Related Budget Amendments
Report
COUNCIL PRIORITY
Enhance Community Engagement and Transparency
BACKGROUND
On May 9, 2013, the Santa Clara Stadium Authority (Stadium Authority) and Levi Strauss & Co. (Levi’s®) entered into a Naming Rights Agreement. Under the 20-year agreement, Levi’s® provides an annual payment to the Stadium Authority in exchange for exclusive naming rights and branding at the Stadium.
On January 30, 2024, the Stadium Authority Board approved the following actions related to the Naming Rights Agreement:
1. Approve a First Amendment to the Naming Rights Agreement with Levi Strauss & Co. that will provide a 10-year extension and additional Naming Rights revenue to the Stadium Authority on the terms presented, in a final form approved by Authority Counsel;
2. Approve a Levi’s® Stadium Naming Rights Extension and Enhanced Signage Project Implementation Agreement with Forty Niners SC Stadium Company LLC (StadCo) to coordinate the Enhanced Sign Project and the share in the costs for the design, construction, and installation of the signage, and memorialize StadCo’s $4,000,000 charitable commitment over 20 years, on the terms presented, in a final form approved by Authority Counsel; and
3. Authorize the City Manager to negotiate and execute a grants agreement and take other actions as may be required to implement StadCo’s charitable commitment, in final form(s) approved by the City Attorney.
As a result, the Stadium Authority and Levi’s® entered into a First Amendment to Naming Rights Agreement that provided a 10-year extension of the Naming Rights Agreement, which will generate an additional $119,000,000 in revenue over the 10 years for the Stadium Authority. As part of the 10-year extension, Levi’s® required an enhancement of their existing Naming Rights signage (Enhanced Signage Project) by December 31, 2025 at no cost to Levi’s®. The Enhanced Signage Project involves the replacement of all four Naming Rights signs which includes the Suite Tower Marquee Sign, East Façade Marquee Sign, and two interior signs above the Stadium scoreboards.
Concurrently, the Stadium Authority and StadCo entered into the Levi’s® Stadium Naming Rights Extension and Enhanced Signage Project Implementation Agreement (Implementation Agreement) to address each party’s share in the cost for the design, construction and installation of the Enhanced Signage Project and to formalize StadCo’s commitment to contribute $200,000 annually for 20 years to non-profit organizations and community projects serving the City of Santa Clara community.
The City and StadCo have since engaged in subsequent discussions regarding the grants and require additional time to develop a long-term community grants process to distribute the grant funds. In the interim, to avoid delay in distributing the grant funds, StadCo is prepared to make its annual $200,000 contribution to the Santa Clara community for the initial three years (Years 1-3).
The proposed Initial Grant Funding Agreement (Attachment 1) provides for the distribution of grant funds in the amount of $200,000 annually for Years 1-3 and a process to develop a program to distribute grant funds for the subsequent years during StadCo’s 20-year commitment term. While the City Council authorized the City Manager to negotiate and execute a grants agreement and take other actions that may be required to implement StadCo’s charitable commitment as part of its January 30, 2024 action, the Initial Funding Agreement itself does not reflect the 20-year term that was contemplated as part of the January 30, 2024 agenda item. As such, the Initial Funding Agreement and budget amendments required to implement the agreement are being presented to Council for its consideration and approval.
DISCUSSION
The Initial Grant Funding Agreement sets forth key terms for Years 1-3 of StadCo’s commitment to provide grants and/or donations in the amount of $200,000 annually for 20 years, through its related companies and/or charitable affiliates, to benefit non-profit organizations and community projects directly serving or impacting the Santa Clara community and outlines a process for developing a program for the distribution of StadCo’s remaining commitment for Years 4-20, as summarized below.
Initial Grant Distribution for Years 1-3
The grant distribution for Years 1-3 will be as follows:
Year 1 (April 1, 2024 - March 31, 2025):
Santa Clara Swim Club $100,000
Bill Wilson Center: $50,000
City of Santa Clara Community Grant Program: $50,000
Year 2 (April 1, 2025 - March 31, 2026):
Santa Clara Swim Club $100,000
City of Santa Clara Community Grant Program: $50,000
Qualified Santa Clara Beneficiary To be Determined: $50,000
Year 3 (April 1, 2026 - March 31, 2027):
Santa Clara Swim Club $100,000
City of Santa Clara Community Grant Program: $50,000
Qualified Santa Clara Beneficiary To be Determined: $50,000
Due to the closing of George F. Haines International Swim Center (ISC) earlier this year, which served as a major regional hub for swimming events and a training site for multiple local swim clubs, Santa Clara swim club organizations are looking for alternative sites to support their swim activities. The grant funds provided to the Santa Clara Swim Club to support their swim program and facility costs.
The Bill Wilson Center is a non-profit organization located in Santa Clara that provides services to children, young adults, and families through their housing, education, counseling, and advocacy programs.
As noted above, the third beneficiary for Years 2 and 3 have not yet been determined. City distribution of amounts designated for any “Qualified Santa Clara Beneficiary To Be Determined” shall be made in the corresponding fiscal year at such times and to such beneficiaries as StadCo, or its designee, shall select through a process it shall determine such beneficiaries, after consultations with and subject to approval from City staff.
The City’s Community Grant Program awards grants to qualifying nonprofit community organizations, athletic groups or organizations, educational groups or organizations, or individuals, for events, activities, and competitions that provide a public benefit to the City of Santa Clara and its residents. The Initial Grant Funding Agreement requires that beneficiaries receiving grant funds designated for the City’s Community Grant Program through StadCo’s commitment be selected by City staff after consultations with StadCo or its designee, in accordance with City’s Community Grants Program guidelines. It should be noted that staff is preparing to bring forth proposed amendments to the Community Grant Policy (Attachment 2), which establishes the corresponding Community Grant Program, for consideration at the June 3, 2024 Governance and Ethics Committee meeting. The amendments will outline grant focus areas, expand and provide clarification on what grant funds can and can’t be used for, among other things.
The grant funding for Years 1-3 will be paid to directly to the City as the fiscal agent distributing grant funds to the beneficiaries described above. Upon receipt of the annual grant funds, the City will ensure that these funds are distributed to the named and to be determined beneficiaries through the City’s Community Grant Program. As the Santa Clara Swim Club is a beneficiary for both Years 1 and 2, and the grants for Year 1 may not be ready to be distributed until FY 2024/25, it is anticipated that the organization will receive their Years 1 and 2 grant allocations during the City’s FY 2024/25, which runs from July 1, 2024 through June 30, 2025.
The City Manager has authority to enter into subsequent grant agreements with beneficiaries as needed to distribute the grant funds.
Grant Distribution for Years 4-20
The grants distributions for Years 4-20 will be made in accordance with the terms of future grant funding agreement(s) between the City and StadCo. The Initial Grant Funding Agreement requires the City and StadCo to meet and confer before April 1, 2026 to develop a Community Grant Funding Agreement for the distribution of grant funds for Years 4-20. At a minimum, the organizations will endeavor to complete the Community Grant Funding Agreement for at least Year 4 by October 31, 2026 in order to provide for the selection of the Year 4 beneficiaries.
Any such subsequent funding agreement(s) will be brought back to the City Council for its consideration and approval.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
As the fiscal agent of StadCo’s annual $200,000 commitment for Years 1-3, the City will be responsible for distributing the respective grant funds to the beneficiaries and through the City’s Community Grant Program for Years 1-3.
The budget amendments in the table below are recommended to recognize and appropriate the grant funding for FY 2023/24.
Budget Amendment
FY 2023/24
|
|
Current |
Increase/ (Decrease) |
Revised |
|
General Fund |
|
|
|
|
Revenue |
|
|
|
|
Other Revenue |
$183,600 |
$200,000 |
$383,600 |
|
|
|
|
|
|
Expenditure |
|
|
|
|
Non-Departmental - Community Grants Program |
$94,243 |
$200,000 |
$294,243 |
As previously discussed, the Year 1 grants may not be disbursed before the end of the City’s fiscal year (June 30, 2024). In the event this occurs, City staff will bring additional budget amendments to carryover the Year 1 grant appropriations for City Council approval at a later date.
COORDINATION
This report has been coordinated with the Department of Finance and City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov>.
ALTERNATIVES
1. Staff’s recommendation (see below); or
2. Such other actions as Council deems appropriate.
RECOMMENDATION
Recommendation
1. Authorize the City Manager to enter into an Initial Grant Funding Agreement with Forty Niners SC Stadium Company LLC (StadCo) to provide for 1) the distribution of $200,000 annually over three years (Years 1-3) to non-profit organizations and community projects serving the Santa Clara community, as further described in the report and agreement, and 2) a process to develop a program, to be formalized through subsequent funding agreement(s) with StadCo, for the remaining grant distribution, in the amount of $200,000 annually for the subsequent years during StadCo’s 20-year commitment term, in a final form approved by the City Attorney; and
2. Approve the FY 2023/24 budget amendments in the General Fund to recognize other revenue in the amount of $200,000 and increase the Non-Departmental Community Grants Program allocation in the amount of $200,000 (five affirmative Council votes required to appropriate additional revenue).
Staff
Reviewed by: Chuck Baker, Assistant City Manager
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Proposed Initial Grant Funding Agreement
2. Community Grant Policy