A sketch of the proposed Niners stadium in Santa Clara features a nod to coaching great Bill Walsh.

In the fifth floor of Santa Clara’s Techmart business center, a trove of reporters, always appreciative of free food, happily devour sandwiches as San Francisco 49ers officials prepare to unveil the team’s new stadium preview center. At a cost of $2.5 million, they have pulled out all the stops to entice prospective luxury-suite owners and season ticket holders.

Standing to the side, a heavy-set bearded man who sports an earring has a smile wider than the others. Jamie Matthews, the city of Santa Clara’s mayor, is basking in the glow. And Matthews is on the verge of drastically reshaping the reputation of his city while also, he hopes, bringing in a lot of money. That’s something of a miracle in today’s municipal finance climate.

While its much larger neighbor, San Jose, awaits league approval for a baseball stadium, Santa Clara has jumped to the front of the queue. The city is only a few steps from completing a billion-dollar deal by pulling off the near impossible: making a professional sports franchise foot almost the entire the bill for a stadium while also giving much of the revenue back to the city.

“For me, it’s all about the money,” Matthews says. “I’ve never been to a football game. If a pro player walks up to me, I’m not going to be enamored. What I want is to talk to a team’s [chief financial officer].”

Last week, San Franciscobased real estate firm JMA Ventures announced that it is partnering with the 49ers owners to purchase Great America theme park in Santa Clara for $70 million. The sale makes construction of the team’s $987 stadium “a foregone conclusion,” says Al Guido, VP of sales for Legends, a consulting firm hired to sell luxury suites.

The purchase of the theme park, which lies directly next to the site approved for a stadium by Santa Clara voters in June 2010, allows a lawsuit filed over parking disputes by the current owners, Cedar Fair, to become moot. Assuming the sale of Great America from Cedar Fair to JMA and the Niners’ York family is approved by Santa Clara’s City Council—and it almost assuredly it will be in the next two months; everyone will get what they want.

Santa Clara believes it is getting the better end of the deal. “In total, we only have 5 percent of this project of more than a billion-dollar investment,” Matthews says. “The legal obligation remains with them.”

Matthews says the stadium, coupled with Great America, puts his Silicon Valley ‘burb on its way to becoming a “premier destination in Northern California.”

It’s a marriage that could only happen in America: family theme park and football stadium. But in a few years—the stadium is expected to open in time for the 2015 season—a theme park, bars, restaurants and tailgating are all expected to converge, paving the way for an all-encompassing entertainment district that will resemble Dave & Busters on steroids.

The 49ers are equally optimistic about their future, leaving the doldrums of Candlestick Park for a modern facility expected to seat 68,500. Team CFO Paraag Marathe beams at Tuesday’s afternoon press event, as he gives interviews and lists off the amenities that will be featured at the Niners’ new home.

But the 49ers may not to be the only football team coming to Santa Clara, and that other team might not be the one everybody expects.

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Headed South
Failed opportunities to get a stadium built at Candlestick Point date back to 1997, which made the 49ers desperate to get a deal done in recent years. Not wanting to leave a devoted fan base and with few options to start from scratch in its current location, the club looked south.

Santa Clara was happy to accommodate, but only on its own terms. Through stashing away redevelopment agency money that could top out at $40 million, $35 million generated from a specialized tax district for hotels and roughly $330 million in financing that will come from a sheltered authority for the stadium, Santa Clara has insulated itself. Naming rights to the stadium alone should cover the authority’s financing costs of construction.

“We built a firewall between the stadium authority and the city,” says Ron Garratt, a former Santa Clara assistant city manager who continues to aid in the process despite retiring. The city also manages its own utilities, bringing in additional revenue.

Meanwhile, the Niners are aggressively acquiring their financial wherewithal through the sale of stadium luxury suites. The club says $173 million worth of suites have been sold without even engaging corporations. A loan from the NFL worth at least $150 million is also expected to come through now that the league has a new collective bargaining agreement, Marathe says. Both are crucial to helping the club cover the bulk of the stadium’s $987 million price tag, as well as any overrun costs.

Getting the team to agree to those concessions was crucial to any deal, the mayor says. “I used to storm off indignant at meetings saying, ‘This isn’t enough,’” Matthews says, laughing about his theatrics. “We’re pretty good negotiators here. We have a proud reputation that we’re a little bit cheap.”

That may be why the stadium was always built with a backup plan in mind. If the 49ers find themselves in an untenable position to pay off the debt, a second team could be brought in as a sub-tenant to the Niners. There is a growing belief that the team will share its new stadium with the Oakland Raiders—the perpetually unhappy tenants across the bay. But Marathe says the two teams don’t have any form of agreement with one another and only occasionally “bounce ideas off of each other.” Raiders officials have refused to comment on specifics other than to say they are open to the idea of sharing a stadium.

Matthews says the Raiders would be welcome to Santa Clara, but they aren’t the only team the city should consider. “We’ve always designed the stadium to have a second team, and that doesn’t necessarily mean the Raiders,” he says. “Don’t think it’s a requirement. It’s possible with another NFL team.”

The longer no action is taken, though, the more difficult it will be for a second team to call Santa Clara home in the near future, Garratt says. “Obviously, the 49ers are not going to give away space to another team to make it far easier for them to get in than they did,” he says. “It will be a very competitive situation if a second team comes along.”

With just 118,000 people, Santa Clara has always been one of the middle cities of the South Bay, lacking a central district and indistinguishable from its neighbors with little sense of geographical definition or identity. But with a new stadium in the works and plans to become a destination for commerce and entertainment, it seems Matthews and company found a back door to becoming a major-league city. With a little luck, and that seems to be going Santa Clara’s way, the stadium will break ground in January 2013.