The Santa Clara County Board of Supervisors has raised concerns about the proposed financial terms with the San Jose Earthquakes that could allow the MLS franchise to build a 35,000-square-foot state-of-the-art training facility and four public soccer fields on 26 undeveloped acres at the county fairgrounds.
Under the nonbinding term sheet up for discussion Tuesday, the Earthquakes were considering an initial 25-year ground lease with options for 10-year extensions that will pay the county $240,000 the first year, with rental payments increasing by 2.55% each succeeding year, equating to $8.25 million over the initial period.
But supervisors have asked county staffers to go back to the negotiating table — leaving the possibility of the deal collapsing — after questioning the return on the investment of the land, whether there was sufficient public benefit and Earthquakes owner John Fisher’s poor reputation among local fan bases.
“When I look at a $100 million giveaway, a negligible, really paltry public benefit and a track record of leaving fans, our constituents in the lurch, I can’t support it,” Supervisor Joe Simitian said.
Under the initial proposal, the Earthquakes intended to invest over $50 million in the facility, which would host the professional team and youth academy and serve as a performance center. The professional facility will include four additional soccer fields and take up 12 acres in total.
While the county provides the land as part of the deal, the city of San Jose has agreed to $6 million in payments, equivalent to one-third of the costs to build the public fields on the remaining 14 acres. Complicating matters more, the San Jose City Council unanimously approved the terms of its agreement Tuesday.
“Many of us are hoping this investment provides the public benefit of the fields, further establishes the Quakes here, makes it easier for them to recruit and retain top talent and coaches and that it may also catalyze additional investment in sports and entertainment and other uses out at the fairgrounds,” San Jose Mayor Matt Mahan said. “I think many of us feel (it) has been probably less fully utilized than it could be for community’s benefit.”
The Earthquakes had agreed to cover the remaining $12 million and will manage the day-to-day operations of the public fields.
Earthquakes officials also stressed that the team would not receive public monies to construct its facility. Should the deal collapse, the team does own enough land in the county to construct its training facility elsewhere.
“The fairgrounds project … represents our collective commitment toward building world-class public fields for our community, as well as a premier training facility for the club,” Earthquakes President Jared Shawlee told The Mercury News. “The Earthquakes have not only committed to funding the entirety of our team training facility at an estimated cost of more than $50 million; we have also committed to funding two-thirds of the estimated $18 million cost to construct the four public fields.”
However, Simitian said the rental payments were insufficient based on the fair-market value of the land and called the agreement a “sweetheart deal.”
The proposal originally stipulated that underserved teams would have at least 250 hours per year of access to the public fields, but Supervisor Susan Ellenberg suggested that the county require more free time for teams within a 5-mile circumference and called for a deeper investment in the surrounding community.
The term sheet also called for the Earthquakes to receive all the net income from running the public fields in the first 25 years before the proceeds are evenly split in years 26 and beyond.
The team estimated it will spend an additional $15 million over the first 30-year period due to the need to replace the four public fields every 10 years.
Along with the financial perks of the deal, residents and youth organizations said the construction of the new recreational area will help fill the shortage of soccer fields in San Jose and noted there were no walkable parks within a 3-mile radius of the prospective site.
“I am really excited about the possibility of the San Jose Earthquakes bringing some activity and energy to the fairgrounds,” Ellenberg said. “For far too long, this large piece of undeveloped property has sat in the midst of the densest council district in the city of San Jose, with project after project being proposed and fading away. I think the fairgrounds have not been an asset for this park-starved largely working-class community, and I welcome opportunities to change that narrative.”
Despite the partnership’s benefits, several residents have spoken out against the deal and asked the city and county to pause or deny the proposal.
With artificial turf a hot-button topic among parents and student-athletes, a group of residents questioned the county’s failure to mandate the use of natural grass as it considers a potential synthetic turf ban.
“It’s highly inequitable for the Earthquakes’ players and affiliates to get natural grass fields, while the fields for public use are covered in toxic, injury-prone, very hot artificial turf,” said Linda Hutchins-Knowles, co-founder of Mothers Out Front Silicon Valley. “In fact, it is environmentally racist to increase the toxic burden on our marginalized communities. They are the ones who most need and deserve professionally maintained, organically managed natural turf fields.”
Some residents also cautioned the county against doing business with the team given Fisher’s reputation and called it a betrayal of public trust.
“John Fisher’s interests are real estate,” Merijane Lee said. “He wants you to grant him access to public land rather than buy his own land for his own enterprise and benefit. Even though, as owner of the historically worst team in MLS, he is reaping unknown amounts of MLS broadcast revenue … Giving John Fisher public assets is just charity for billionaires.”
After he read a host of news clips excoriating Fisher’s ownership, Simitian agreed as he questioned whether the Earthquakes would be a “good-faith partner.” Fisher, owner of the Oakland A’s, drew huge backlash among fans for moving the team out of Oakland.
Referencing the club’s major investment in its training facility and the public soccer fields, the Earthquakes disputed the charity characterization and called it “a win-win for everyone.”
“We believe this Fairgrounds project represents the best of what a public-private partnership can look like,” Shawlee said. “With the youth of Santa Clara County training alongside their heroes, the complex will serve as a model for connecting pro athletes to their communities while also creating greater access to safe playing spaces for children.”