If the San Jose Sharks promised to pay for a new building, why are they asking for taxpayer money?

In 2024, the mayor of Gilroy, California, announced to the City Council that a master plan for a new sports complex had been agreed upon with the San Jose Sharks. The complex would be ready by 2026 and would include two brand new NHL-sized ice rinks, two conference rooms, skate rental area, spectator seating, training rooms, conditioning area, multi-purpose rooms, offices, support areas, and even a restaurant.

All of this at a cost of $30M…and this would be “paid for by the San Jose Sharks.” The mayor mentioned in a news story that she was “pleased” that taxpayers were being asked to spend “next to no cost” for this project. The mayor wrote a letter to the Gilroy Dispatch to again state that this project would “be paid for and operated by Sharks Sports & Entertainment.” This message has been touted by the city for years. In 2022, while the city was still negotiating with the Sharks, Gilroy City Administrator Jimmy Forbis “confirmed the city would not be using taxpayer money or seeking a bond or tax measure on the ballot to support the rink.”

Fast forward to today and things have changed. Now, the Sharks want the city to financially help them due to the “rapidly increasing construction costs.” My first thought is…why don’t the Sharks just pay for this themselves? Isn’t the owner, Hasso Plattner, of the Sharks worth $18B and counting? Instead, we have both the mayor and city council members coming up with all sorts of excuses as to why the city should help the team. According to the mayor, the team is trying to “come up with a plan” to “bridge the gap” between the original estimate ($30M) and the current estimate ($59m)…with taxpayers help. One city council member told the Dispatch that he wanted to try and find a “mutually beneficial solution.”

I have one. Make the team pay for what they agreed to in the contract. City officials seem scared to tell the Sharks that no public money is coming for this project. Why? Because the team keeps hinting that without taxpayer money, the costs of this project “present an air of uncertainty“…meaning they would back out of the deal. Didn’t the city of San Jose just give the team $320M of taxpayer money for a $400M renovation? One would think that the Sharks have the bank account to still fund this new complex that is being built FOR THE TEAM. This is the same team whose value rises up to 40% every year in value.

The chances of the public being involved in this decision are slim to none so all that we can hope for is that the city somehow has the guts to stand up for the local taxpayers during the behind-closed-doors “negotiations.” When cities/states make agreements with a sports team, the local leaders are expected to follow through on everything that is contractually agreed upon. When a team signs an agreement and then wants changes or just refuses to follow through…well, that is ok. Taxpayers have already given $10B+ of extra money to sports venues that were not “originally budgeted.”

The examples of this are endless:

• When Petco Park opened in 2004, the terms of the lease agreement between the team and city are clear…the Padres “were…solely responsible for any and all design and construction costs” that exceeded the original estimate. Seems simple enough. Except, when the ballpark had $45.8M of additional expenses, the team only paid $38M while the city paid $7.8M. Why did the city do this? We have no idea. Remember that the city did this “despite the fact that the MOU stated that the Padres would be liable for cost overruns.”
• When Solider Field was renovated in 2003, the Chicago Bears were “obligated the Bears to pay for any budget overruns.” Somehow, it was only years later that we found out that taxpayers had been charged an extra $26M for overruns. Again, nothing happened and local leaders just accepted this.
• When the Minnesota Vikings built their new stadium in 2016, the stadium developer (Mortenson) “shall be responsible for payment of any Cost Overrun…any Cost Overruns are the responsibility of the (Mortenson) and not of the Authority or the State.” Yet when the stadium was finally built, the state “moved $16.5 million dollars from the project contingency fund to cover the budget overrun…Mortenson did not eventually bear the burden of the cost overrun.”