REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Title
Action on the Proposed Santa Clara Stadium Authority Fiscal Year 2026/27 Operating, Debt Service and Capital Expenditure Plan and Budget, Policies for the Stadium Authority Budget and Compliance and Management, and 2026 Non-NFL Events Marketing Plan, Including an Amendment to the Existing Agreement with Canyon Oaks Ventures, LLC for the Review of the Events Marketing Plan and the Completion of a Stadium Market Trend Analysis
Report
BACKGROUND
The Stadium Management Agreement (Management Agreement) defines the Stadium Operation and Maintenance Plan (SOMP) as the plan designed to achieve a safe and well-maintained Stadium and states that it should include the standards for management and operation of the Stadium, including the required security, staffing, and other required elements of hosting Stadium events. The Forty Niners Stadium Management Company LLC (ManCo or Stadium Manager) is responsible for preparing the SOMP that is presented annually to the Santa Clara Stadium Authority (Stadium Authority). The SOMP is required to include the:
1. Annual Shared Stadium Expense Budget,
2. Annual Public Safety Budget,
3. Capital Expenditure Plan,
4. Marketing Plan.
Each year, Stadium Authority staff prepares a proposed Santa Clara Stadium Authority Operating, Debt Service, and Capital Budget for the Stadium Authority’s twelve-month Fiscal Year (FY), which begins on April 1 and runs through March 31 (in accordance with Article 4 - Records, Accounts, Budgets, and Reports of the Management Agreement).
Section 4.10 of the Management Agreement requires that the Marketing Plan set forth in reasonable detail the Stadium Manager’s plans to develop, implement, and monitor marketing, booking, advertising, and promotion of the Non-NFL Events for Levi’s Stadium.
DISCUSSION
This report to the Stadium Authority Board transmits the Proposed FY 2026/27 Stadium Authority Operating, Debt Service, and Capital Budget (Attachment 1), Public Safety Budget (Attachment 2), and 2026 Levi’s Stadium Events Marketing Plan (Attachment 3). It should be noted that the Public Safety Budget is included in this report for Stadium Authority Board information only, as budget appropriations for the City’s public safety departments are approved by the City Council through the City’s biennial budgeting process.
The budget document contains several key sections including the:
• Stadium Operating Budget, which includes a breakdown of the Stadium Authority’s General and Administrative costs,
• Shared Stadium Manager Expenses, including the total expenses and the Stadium Authority’s share of those expenses,
• Ten-Year Forecast,
• Debt Service Budget; and
• Capital Budget.
In addition, City staff has included glossaries of commonly used financial terms in this proposed budget to facilitate understanding of the types of revenues, expenses, debt, and capital expenses.
In accordance with Sections 4.5 through 4.8 of the Management Agreement, ManCo prepared and submitted a proposed operating, capital, and debt budget for the FY 2026/27 Stadium Authority Budget. Staff followed the budget development process outlined in the Proposed Stadium Authority Board Budget Policy (Attachment 4) in preparing the Proposed FY 2026/27 Stadium Authority Budget.
The proposed budget was presented to the Board and the public at three meetings: Study Sessions on February 24th and March 5th, and a Public Hearing on March 10th, as part of its final consideration for approval.
The following summarizes the timeline of the FY 2026/27 budget process:
• In November 2025, Stadium Authority worked with ManCo to develop the annual budget plan, which included the dates that ManCo would provide all necessary documents as required by the Stadium Lease, Management Agreement, and Stadium Operations Agreement.
• In January 2026, ManCo provided annual documents as outlined in the Stadium Agreements, which were used in the Budget Development Process:
o Stadium Operations and Maintenance Plan
§ Annual Shared Expense Budget with Five-Year Projection
§ Annual Stadium Authority Operations Budget
§ Annual Public Safety Budget
§ Capital Expenditure Plan with Five-Year Projection
§ Levi’s Stadium Events Marketing Plan
o Public Safety Document Updates
o NFL and Non-NFL Events Parking Plans
• In February 2026, Stadium Authority staff analyzed ManCo’s budget submission including but not limited to the number of full-time equivalents (FTEs) recommended and related personnel costs as well as non-personnel costs and calculated the budget for Stadium Authority General and Administrative (G&A) costs (such as staff costs, consulting, audit, legal, and any reasonable and necessary expenses to support the Board and Stadium Authority operations) as well as any necessary funding to be used for the Stadium Authority’s Discretionary Fund.
The Proposed Budget is presented on an accrual basis, which provides increased transparency for projected revenues and expenses, with added detail about financial transfers. The total Revenues and Expenses in the Stadium Authority Operating Budget for FY 2026/27 are $67.4 million and $64.4 million, respectively.
A summary of key changes and assumptions for the Proposed Budget includes:
• Net Non-NFL Events Revenue estimate for FY 2026/27 totals $4.6 million. The budget is lower than the actuals for FY 2024/25 and FY 2025/26, which were $10.2 million and $6.2 million (projected actuals), respectively. ManCo provided a budget estimate of $3.6 million to $4.6 million for Net-Non-NFL Event Revenue for FY 2026/27. Historically, performance has exceeded preliminary budget estimates, driven by actual event profitability.
• Payments to the City’s General Fund are programmed at $7.5 million in FY 2026/27 for performance rent ($1.8 million), excess revenue distribution ($4.5 million), ground rent ($1.0 million), and Senior/Youth fees ($248,000).
• Non-NFL Ticket Surcharge revenue is estimated to total $4.1 million, reflecting the surcharge collected for tickets sold in FY 2026/27 for Non-NFL Events.
• Public Safety cost reimbursements over the agreed-upon threshold for FY2026/27 are $2.5 million; $1.9 million will be paid from the Public Safety Cost Reserve, and $582,000 will be paid from the Discretionary Fund.
• Public Safety Costs 2024 Outstanding Balance paydown of $421,000 from Excess Revenues, which fully pays off the remaining Public Safety Cost 2024 Outstanding balance at the end of FY2026/27.
• Capital Expense (CapEx) Reserve Fund Balance is budgeted to have a balance of $609,000 by the end of FY2026/27. This is obviously insufficient for the facility and will need to be addressed this year, with a plan developed for future years to ensure maintenance can be performed when needed. The Proposed Budget includes an additional $5.7 million transfer from the Operating Reserve to the CapEx Reserve above contractual requirements to provide additional resources for CapEx projects. Stadium Authority will continue to provide oversight and work with ManCo to ensure the projects with the highest priority and needs are addressed within the five-year CapEx plan. As the tenant of Levi’s® Stadium, Forty Niners SC Stadium Company LLC (StadCo) is conducting a Facilities Condition Assessment (FCA), funded at its expense, to support long-term financial planning, operational efficiency, and structural integrity. The FCA will identify necessary repairs, capital improvements, and compliance requirements while optimizing maintenance costs and resource allocation. The FCA is anticipated to be completed in 2027. Once the assessment is complete and received, the Stadium Authority will undertake a vetting of the FCA. It is important to note that the current capital reserve balance is far below an appropriate level, and increasing this balance should be a major focus of future budgetary and capital project planning. The Stadium Authority will also assess and independently verify long-term facility needs at the Stadium. Initial funding for this work is included in the proposed budget, and Stadium Authority staff plans to identify a vendor to initiate the work this year.
• Capital Expense Projects totaling $21.9 million, including general building, security, furnishings and equipment, and public safety investments. This FY 2026/27 request from ManCo is 127% higher than the projected capital spend in FY 2025/26, reflecting increasing capital needs due to the stadium's aging. The Stadium Authority will oversee and collaborate with ManCo to prioritize projects within the five-year CapEx plan. The pending StadCo FCA and the Stadium Authority’s future facility assessment, when complete, will aid future long-term financial planning, operational efficiency, and structural integrity. Given the low capital reserve balance, increasing reserves will be a key focus in future budget and capital planning.
• General and Administrative Budget funding 7.9 full-time equivalent positions totaling $3.4 million. This is the baseline level of support required for Stadium Authority operations and reflects an estimate of staff time for FY 2026/27 activities.
• Total estimated Debt Service payments of $21.0 million including debt related to the Community Facilities District ($3.8 million) and Term A Loan ($17.2 million).
• Renovation/Demolition Reserve is budgeted to have a balance of $58.4 million by the end of FY 2026/27. This represents more than half of the $70 million required. This is largely due to contributions from excess revenues that have been generated in recent years. As the stadium continues to age, higher capital expenditures will be needed to maintain its state-of-the-art condition, requiring the use of excess revenues to fund these projects. As a result, future contributions to this reserve are anticipated to be reduced.
Key highlights for the Stadium Authority’s 2026/27 budget are as follows:
Operating Budget
Revenues
• FY 2026/27 total budgeted revenues of $67.4 million includes $24.8 million in facility rent, $5.2 million in Stadium Builder License (SBL) revenue, $16.2 million in NFL ticket surcharge, $8.3 million in Naming Rights revenue, $4.6 million in Non-NFL event net revenue, $4.1 million in Non-NFL ticket surcharge, $3.2 million in interest revenue, and $1.0 million in miscellaneous other revenues.
• Non-NFL Events Ticket surcharge revenues are proposed to be $4.1 million in FY 2026/27. Under the 2024 Settlement Agreement, the Non-NFL event ticket surcharge was increased to a minimum of $8.00 per ticket starting in FY 2025/26. The six (6) FIFA World Cup soccer matches are an exception to this the ticket surcharge to those events being $6.00 per ticket. The original draft agreement with FIFA did not provide for a surcharge at all. However, during subsequent negotiations for the terms of the FIFA Assignment and Assumption Agreement, Stadium Authority staff, working with ManCo, were able to negotiate this amount up to $6.00 per ticket. The additional surcharge revenue will be used to reimburse public safety costs that exceed the threshold.
• ManCo projected Net Non-NFL Event Revenue to be between $3.6 million and $4.6 million in FY 2026/27. The Stadium Authority used the higher estimate of $4.6 million as the anticipated Net Non-NFL Event Revenue for FY 2026/27. This is based on a projection of five major events (four concerts and one soccer event) and non-ticketed events.
Expenses
• The proposed Operating Budget equals $64.4 million and includes the Stadium Authority’s share of expenses covered under the Management Agreement in the amount of $14.8 million, along with monies sufficient to fulfill the Stadium Authority’s administrative oversight of the Stadium in the amount of $4.6 million, SBL sales and services of $2.5 million, buffet costs of $859,000, utility costs of $1.9 million, ground rent of $1.0 million, performance rent paid to the City of $1.8 million, public safety cost over threshold of $2.5 million, pay down of public safety cost 2024 outstanding balance of $421,000, transfer to the City general fund of $4.5 million and other miscellaneous expenses of $1.8 million.
• Total transfers out of $27.8 million include transfers to the Capital Fund for future Stadium capital improvements and the Debt Service Fund for debt service payments.
Reserves
• Total operating reserves are expected to be $96.4 million at the end of FY 2026/27. This is composed of a Renovation/Demolition Reserve of $58.4 million, an Operating Reserve of $28.5 million, a Stadium Funding Trust Reserve of $8.6 million, and a Discretionary Fund Reserve of $870,000.
Debt Service Budget
• The proposed 2026/27 Debt Service Budget of $21.0 is based on the required debt service payments. Total outstanding debt is projected to decrease by $10.7 million from $209.7 million to $199.0 million.
Capital Expense Budget
• The FY 2026/27 Capital Expense Budget totals $21.9 million. Of this total, $10.8 million of prior year appropriations are carried over into FY 2026/27. New capital improvement appropriations equal $11.1 million
Subsequent Revisions to the Proposed Stadium Authority’s FY 2026/27 Budget
Study Sessions were held on February 24 and March 5, 2026, to discuss the Proposed Santa Clara Stadium Authority Fiscal Year 2026/27 Operating, Debt Service, and Capital Budget and Stadium Authority Budget, Compliance, and Management Policies. The following key items were discussed:
• Budgeted net income for FY 2026/27
• Impact of capital funding needs on the distribution to the General Fund
• Non-NFL Events: Revenue projections, booking competition with the Convention Center, leveraging the 49ers fanbase, staffing impacts, and maintaining profitability/oversight.
• Funding source for Public Safety Costs (PSC) reimbursement, which are expected to be reimbursed by the Bay Area Host Committee
• Naming Rights requirements and the responsible party to pay liquidated damages
• Financial impact of 49ers games being held internationally
• Scope and timeline of the Facility Condition Assessments (FCAs)
• Capital investment policy and strategies to maintain and keep the stadium in good working order
• Interest revenue budget in FY 2026/27 and interest earned on the Renovation/Demolition reserve
• Source of Stadium Authority Debt Service payments
• Projections and performance metrics to support SBL Sales and Services expenses
• Increase in Legal services budget for FY 2026/27 compared to FY 2025/26 projected actuals
• Stadium Manager’s proposal for partial reimbursement of their new offsite leased office space costs
• Non-NFL Event additional ticket surcharge revenue
• Other Expense itemized budget
• Stadium Authority General & Administrative expenses related to FIFA World Cup 2026 (FWC26)
• Reason for declining performance rent in future years
• Rationale for SOMP confidentiality
The Board asked questions and discussed the Proposed Budget at the February 24th Study Session. At the March 5th Study Session, staff provided responses to the questions raised at the prior Study Session. The following provides information outlining changes that were made to the Proposed Budget based on the two study session discussions.
Stadium Authority Share of Stadium Manager Offsite Leased Office Space
During the FY 2025/26 budget process, the Stadium Manager proposed to include in the budget a share of offsite leased office space being used by Stadium Manager staff. This was the first year that this was requested. Based on staff review of those costs and feedback from the Board, the Stadium Authority recommended excluding those costs from the proposed budget.
The Stadium Manager has again proposed to include this cost within the Other Expenses line for the FY 2026/27 budget, indicating through their submittal that the Stadium Authority and the Stadium Manager will undergo a meet and confer process in accordance with the contractual agreements on this office space expense line item. Based on feedback provided at the Study Session and staff review of these costs, the Stadium Authority again recommends the exclusion of the offsite office space cost of $620,000 from the proposed budget while the Stadium Authority staff continues the dialogue with the Stadium Manager on next steps.
Civic Event and Discretionary Fund Expense
Stadium Authority staff had included a discretionary fund budget of $1.3 million in the FY 2026/27 proposed budget, which was intended to cover the costs of a Civic Event at Levi’s Stadium. At the time the budget was being prepared, staff were still in discussions with the Stadium Manager about the timing and booking of this event and the Board had not approved it yet. At the February 24, 2026 Council and Authorities Concurrent meeting, the Board took action to approve the community Civic Event to be hosted at Levi’s Stadium on February 28, 2026 in addition to approving a FY 2025/26 budget amendment of $1 million to fund this event from the Stadium Authority Operating Budget from the Discretionary Fund Reserve.
Therefore, the FY 2026/27 Proposed Discretionary Fund Reserve Beginning Fund Balance and the Discretionary Fund Expenses were both reduced by $1 million to reflect the fact that this event and related expenses occurred in FY 2025/26. This adjustment had no impact on the Discretionary Fund Reserve Ending Fund Balance since it is just a timing adjustment.
Shared Stadium Manager Expenses: Security
The Stadium Manager’s proposed Security Shared Expense budget included an increase in FY 2026/27 from the prior year. Through communication and discussion with the Stadium Manager, staff learned that the increase was related to implementation of armed security staff to patrol the stadium 24/7. The Stadium Manager indicated that the Stadium Authority’s 50/50 share of these new costs are approximately $350,000 to $400,000.
The use of armed security guards anywhere in the City of Santa Clara requires review and ultimate approval by the City’s Police Department. At the time of preparing this report, the specific request by the Stadium Manager has not received that approval yet. Further, staff needs time to engage in further discussions with the Stadium Manager about this new budget item as well as analyze it in the context of the Stadium Management Agreement to determine if this cost should in fact be a Shared Stadium Expense (SSE). Currently, staff recommends the reduction of the Shared Stadium Manager Expenses-Security by $400,000 from the proposed budget while the staff continues the discussion with the Stadium Manager and the Stadium Manager’s formal request to the City’s Police Department is processed.
Removal of Certain Carryover CapEx Projects / Other CapEx Changes
The Stadium Manager proposed carrying over several CapEx projects that had been carried over for the past three to nine years. Stadium Authority staff asked the Stadium Manager if any of those projects could be closed out, and they indicated that the following projects could be cancelled and removed from the budget.
|
Original Fiscal Year Requested |
Project Description |
Amount |
|
2016/17 |
Miscellaneous |
$114,950 |
|
2022/23 |
Miscellaneous |
$114,950 |
|
2023/24 |
A/V - Renewal and Replacements |
$86,213 |
|
|
Total |
$316,113 |
Additionally, the Stadium Authority recommended that the budgeted costs in the Project and Construction Management Firm projects be moved to the respective projects that are being managed. This provides a more accurate picture of the costs of each CapEx project. The Stadium Manager agreed and shifted those budgeted costs to other projects. Carryover funding from certain projects was also combined with new project funding to support the additional scope of previously approved work. Lastly, the requested budget for several other CapEx projects had small adjustments. Overall, between the cancelled projects noted above and the other adjustments, the total CapEx Project costs were reduced by $358,000.
Stadium Manager’s Five-Year Capital Expenses
In light of the significant investment in capital expenses proposed in the out-years beyond FY 2026/27 staff is not comfortable recommending Stadium Authority Board approval of the full Five-Year Capital Expenses Plan at this time. While staff has received a list of projects, included for informational purposes (Attachment 6), staff has not had the opportunity to review these projects in detail. In addition, the Facilities Condition Assessment upon which these out-year projects has not yet been finalized or reviewed by staff. This assessment is also expected to include detail on projects that may be necessary beyond the next five years. Accordingly, staff’s specific recommendation for the Stadium Manager’s Five-Year Capital Expenses is as follows:
(a) Approve the Fiscal Year 2026/27 CapEx projects (Year One), of the Stadium Manager’s 5-Year Capital Expenditure Plan, including such Projects that are to be completed over Multiple Years;
(b) do not approve at this time CapEx projects to be commenced after Fiscal Year 2026/27 (Years 2 through 5); and
(c) upon completion of the Stadium Manager’s Facility Condition Assessment, Stadium Authority staff’s evaluation and completion of its own Facility Condition Assessment, and further discussions with Stadium Manager, return to the Stadium Authority Board with staff’s recommendation for Stadium Authority action on the CapEx program for Years 2 through 5.
Budget Revision Summary
The projected paydown of the Public Safety Cost (PSC) 2024 Outstanding balance in FY 2025/26 increased which results in a smaller balance that is projected to be carried forward into FY 2026/27 and therefore a smaller cost in that year reducing that line by $415,000. Lastly, all of the adjustments to the Stadium Authority Operating Budget noted above result in additional projected Excess Revenue available to transfer to the City’s General Fund, therefore that expense line increased by $924,000.
Total expenses in the Stadium Authority Operating Budget decreased from $65.9 million to $64.4 million, and the total expenses in the Stadium CapEx budget decreased from $22.2 million to $21.9 million
The tables below outline the changes to the expense lines of the FY 2026/27 proposed budget from the study session ($ in thousands).
Lastly, due to the changes noted above as well as changes to the FY 2025/26 projections, the Beginning and Ending Fund Balance line items for the Discretionary Fund Reserve, Renovation/Demolition Reserve, Stadium Funding Trust Reserve and the Unrestricted Fund Balance were also adjusted.
The Proposed Santa Clara Stadium Authority Fiscal Year 2025/26 Operating, Debt Service, and Capital Budget (Attachment 1) reflects these changes.
Levi’s Stadium Marketing Plan
The Marketing Plan (Attachment 3) is submitted by ManCo and included in the report. Under the Management Agreement, the Stadium Manager is responsible for marketing, promoting, scheduling, and booking Non-NFL Events. Section 4.10 of the Management Agreement requires that the Marketing Plan set forth in reasonable detail the Stadium Manager’s plans to develop, implement, and monitor marketing, booking, advertising, and promotion of the Non-NFL Events for Levi’s Stadium. The Marketing Plan is included in the report as Attachment 3.
The Stadium Authority has contracted with a third-party consultant, Canyon Oaks Ventures, LLC, to conduct market trend research on how large multi-purpose venues market and promote Non-NFL Events and review and assess the 2025 and 2026 Levi’s Stadium Marketing Plans. Together, the review will assess current marketing strategies, benchmark stadium performance, evaluate consistency and impact across marketing and branding, identify industry trends and areas for improvement, and offer recommendations to enhance strategic oversight of Non-NFL Events marketing. The two concurrent work efforts are expected to be completed in May/June 2026. The final reports and recommendations will guide the Stadium Authority’s oversight of the 2026 Marketing Plan, including subsequent review of the 2026 Marketing Plan outcomes; review and analysis of future Marketing Plans and related outcomes; and help inform ongoing discussions with the Stadium Manager related to booking profitable Non-NFL Events. It should be noted that the current agreement will need to be amended to extend the term and add additional funds to complete these two work efforts. The current agreement terms out on March 31, 2026, and has a not-to-exceed amount of $70,618.04. The Executive Director has delegated authority to amend the agreement up to $100,000; however, it is anticipated that additional funds beyond the delegated authority is needed.
Staff recommends that the Board note and file the 2026 Levi’s Stadium Marketing Plan at this time; and direct staff to complete the Stadium Authority’s scope of work with Canyon Oaks on the Marketing Plan Review and stadium market trend analysis, work in collaboration with the Stadium Manager to implement appropriate changes upon completion of the marketing consultant’s reports, and present final reports and results to the Stadium Authority Board in Fall 2026. Staff also recommends delegated authority to the Executive Director to extend the term of the Agreement with Canyon Oaks through December 31, 2026 and increase the not to exceed amount to $130,000.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environment Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(a)(4) in that it is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.
FISCAL IMPACT
The Proposed FY 2026/27 Budget includes $64.4 million for operating costs (includes transfers out to Debt Service and Capital Funds), $21.0 million for debt service, and $21.9 million for capital (includes a $10.8 million carryover from the prior year).
COORDINATION
This report has been coordinated with the Executive Director and Stadium Authority Counsel’s Offices.
PUBLIC CONTACT
On February 25, 2026, a notice of the public hearing was published in the Santa Clara Weekly and the Proposed Budget (Attachment 1) was available to the public on the City’s website and in the City Clerk’s Office.
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, or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Adopt the Santa Clara Stadium Authority Fiscal Year 2026/27 Operating, Debt Service, and Capital Budget;
2. With respect to the CapEx Plan: (a) Approve the Fiscal Year 2026/27 CapEx projects (Year One), of the Stadium Manager’s 5-Year Capital Expenditure Plan, including such Projects that are to be completed over Multiple Years; (b) do not approve at this time CapEx projects to be commenced after Fiscal Year 2026/27 (Years 2 through 5); and (c) upon completion of the Stadium Manager’s Facility Condition Assessment, Stadium Authority staff’s evaluation and completion of its own Facility Condition Assessment, and further discussions with Stadium Manager, return to the Stadium Authority Board with staff’s recommendation for Stadium Authority action on the CapEx program for Years 2 through 5.
3. Note and file the 2026 Levi’s Stadium Marketing Plan;
4. Authorize the Executive Director to amend the Agreement with Canyon Oaks Ventures, LLC to extend the term through December 31, 2026, and increase the not to exceed amount up to $130,000, as needed, to complete the described scope of work for a Stadium Non-NFL Event Marketing Plan Review and Market Trend Analysis;
5. Adopt the Stadium Authority Board Budget Policy; and
6. Adopt the Stadium Authority Board Compliance and Management Policy.
Staff
Reviewed by: Kenn Lee, Treasurer
Approved by: Jovan Grogan, Executive Director
ATTACHMENTS
1. Santa Clara Stadium Authority Proposed Fiscal Year 2026/27 Operating, Debt Service, and Capital Budget
2. Fiscal Year 2026/27 Annual Public Safety Budget
3. 2026 Levi’s Stadium Events Marketing Plan
4. Stadium Authority Board Budget Policy
5. Stadium Authority Board Compliance and Management Policy
6. Stadium Manager Five-Year Capital Expenditures FY 2027/28 - FY 2030/31