January 20, 2016 / 8:49 PM / 3 years ago

San Francisco may seek to renegotiate Super Bowl contract over costs

SAN FRANCISCO (Reuters) - Legislation will be introduced in San Francisco’s City Council next week demanding that the city renegotiate its contact with the National Football League for hosting Super Bowl 50 due to rising costs, a city superintendent said.

Sep 10, 2015; San Francisco, CA, USA; Ellie Goulding performs during a NFL Super Bowl 50 kickoff concert at Justin Herman Plaza. Mandatory Credit: Kelley L Cox-USA TODAY Sports

The move stems from a budget and legislative analyst report last week warning that taxpayers could be on the hook for nearly $5 million in expenses associated with securing public events leading up to the game, unwelcome news to a city already facing a $100 million budget deficit.

San Francisco Mayor Ed Lee’s office previously estimated the cost to the city at between $3.5 million and $4 million.

San Francisco-based attractions include concerts at Super Bowl City on the scenic embarcadero and NFL Experience, an interactive football-themed park at a downtown convention center.

John Avalos, a city superintendent and co-sponsor of the legislation, accused Lee of “giving out corporate subsidies” by not getting the NFL to foot more of the Super Bowl bill. He also accused the mayor of cutting the deal in secret, saying Lee had only recently released cost estimates.

But Christine Falvey, a spokeswoman for Lee, said the festivities will bring millions in additional hotel, business and sales tax revenues. The events have been planned for nearly two years and have been scrutinized and cleared by multiple city agencies, she said.

San Francisco was promised a windfall when it hosted the America’s Cup sailing races in 2013 only to be stuck with an $11 million tab when tourism lagged expectations, Avalos said.

While the legislation is a long-shot given the short timeline before events kick off on Jan. 30, officials have suggested they will push separate legislation that would increase transparency around similar negotiations in the future.

Santa Clara, the city outside San Francisco where the Feb. 7 championship game will actually be played, negotiated to have all its expenses covered by the private Super Bowl 50 Host Committee.

Like past host cities, San Francisco is banking on increased tax revenues to leave the city in the black. But economists are not so sure that will pan out for San Francisco, a popular tourist destination year-round.

“Frost belt cities do better because few people visit them in the winter,” said Roger Noll, a professor of economics at Stanford.

“In general, mega events usually cost more than they bring in for a city government, but there is lots of variance,” he said.

Reporting by Rory Carroll; Editing by Tom Brown

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