SANTA CLARA, California (Reuters) - Santa Clara approved a 40-year lease for a new $1 billion stadium on Tuesday that brings the Silicon Valley city another step closer to becoming the new home of the San Francisco 49ers.
Under the agreement, the city will receive $180,000 of rent in the first year of stadium operation, with $35,000 yearly increases for the first 10 years. Rent will be raised to $1 million in the 11th year, with increases of $100,000 every five years through the lease's initial term.
The lease also calls for additional payments if a second team uses the 68,500-seat stadium, and for concerts and other events not affiliated with the National Football League.
The proposed stadium, near the city's Great America theme park, has run into opposition from some residents, who say an $850 million construction loan from three banks is too risky.
But city council members say the financing agreement prevents the lenders from turning to the city to pay the debt and that no city funds will be used for construction or operation of the facility.
Additionally, no new or increased taxes are permitted to fund potential cost overruns or revenue shortfalls.
A court hearing is scheduled for March 5 to consider a proposal by a residents' group to block construction by putting the stadium's financing agreements up for a vote in June. The Stadium Authority and the 49ers affiliate say the agreements are not legally subject to a referendum vote.
(Reporting by Philipp Gollner in Santa Clara, California; Editing by Peter Rutherford)