The vote comes amid an ongoing dispute between The San Francisco 49ers and the City of Santa Clara.
At a special meeting held Tuesday night, city leaders made it clear they want to end a management agreement with the 49ers for managing and operating non-NFL events. The City voted 6-0 to begin the legal process.
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The City says 49ers officials have "made misrepresentations, failed to comply with laws and the contract, violated prevailing wage laws, and mismanaged operations resulting in declining non-NFL net revenues."
"This is a public asset and it should be done in a straight forward and transparent manner. We've not been able to do that with these folks," said Santa Clara City Attorney Brian Doyle.
The City says the 49ers underpaid at least one contractor by approximately $85,000. However, the team says the issue has been corrected. Representatives from the South Bay Labor Council have submitted public records requests to the 49ers for other payroll records, but haven't heard back.
"What we've gotten in response is just stone walling, which raises a big red flag for us," said Ben Field, South Bay Labor Council representative. "We're very concerned that there's a lot more wage theft than we've discovered already."
The City owns the stadium, but leases it to the 49ers, who are also responsible for generating shared revenue through concerts and other events. Since 2014, the City has received roughly $2.5 million annually in performance-based rent, which goes into the general fund. But this year, that number is expected to be zero.
"They've reneged on every promise for the stadium and they're not giving us the financial information, so at this point, we have no benefit to the City of Santa Clara, and that's not the way it was supposed to be," said Santa Clara Mayor Lisa Gillmor.
#SantaClara votes to terminate #49ers as the stadium manager of non-NFL operations at Levi’s Stadium. Mayor says, “...they have engaged in egregious state law violations that have put the Stadium Authority in an untenable position.” #ABC7Now pic.twitter.com/bf0lW04JG1— Chris Nguyen (@ChrisNguyenABC7) September 18, 2019
City documents show the 49ers reported just under $19,000 in non-NFL net revenue for the last fiscal year. That's a big drop compared to the little more than $6 million reported in 2015-2016.
On Wednesday, San Francisco 49ers spokesman Rahul Chandhok said, "The City's latest announcement is just another step in a self-destructive process they began years ago as part of a petty political vendetta. All of those efforts failed, just as this latest attempt will also fail."
"The City's legal case, such as it is, is in direct violation of the clear language of the relevant contracts. We are entirely confident that we will prevail in this dispute," Chandhok said.
If the 49ers do not relinquish control of its managerial oversight by Nov. 15, which is the City's stated deadline, the case will likely result in confidential arbitration.