Memo: Hosting Super Bowl 50 will cost SF $4 million

San Francisco will spend an estimated $3.5 to $4 million to cover transportation, public safety and other costs associated with Super Bowl 50, according to a memo from Mayor Ed Lee’s budget director Kate Howard, which was provided to the San Francisco Examiner Thursday.

The cost impacts include $1.7 million to the San Francisco Municipal Transportation Agency, which oversees Muni, $1.5 million to the Police Department and $600,000 to the Fire Department.

“The range of total projected General Fund costs for the event is between $3.5 million and $4 million (including MTA).” the memo said. “These expenditures are all within departmental budgets and will not require any supplemental resources.”

The memo argues that the expense will be more than offset by the tax revenues generated by the event.

The figures are estimates and “actual departmental expenditures will not be known until after the event has concluded,” the memo cautions.

The memo notes the total funding was included in the city departments’ overall funding in the budget but in two cases one-time revenues were specially earmarked for Super Bowl 50. Those two expenses include $250,000 for Fire Department overtime and $58,000 for the Department of Emergency Management to plan for special events, including Super Bowl 50.

The memo defends the expense, drawing a comparison of Super Bowl 50 to other traditional events in San Francisco, including World Series Parades, Fleet Week, LGBTQ Pride Celebration and New Year’s Eve.

“The City manages and budgets for these activities in much the same way as it is managing and budgeting for Super Bowl 50,” the memo said.

Last month, the Board of Supervisors Land Use and Economic Development Committee held a hearing on the Super Bowl 50 impacts to The City’s budget. Board members were critical of using taxpayer money for the event. At the time, there were no cost estimates. Thursday’s memo is the first publicly disclosed analysis of the cost to The City’s budget.

“Our taxpayers expect that we use those funds to pay for affordable housing, to pay for homeless services, to pay for mental health services, to pay for Muni — not for an event that is primarily marketing and promoting a corporate event and institution,” said Supervisor Jane Kim during the hearing last month.

Beginning Jan. 30, Justin Herman Plaza will play host to Super Bowl City, a free event open to the public organized by the Super Bowl 50 Host Committee in partnership with the NFL. Muni will spend the additional $1.7 million to run alternative and increased service to accommodate the event and the closure of Market Street near The Embarcadero for the celebration.

The Super Bowl takes place Feb. 7 at Levi’s Stadium in Santa Clara and is expected to bring hundreds of millions of dollars to the region and create jobs.

“The City anticipates a significant economic impact, including local tax revenues, related to the Super Bowl 50 events that otherwise would not have occurred,” the memo said. “Economic impact reports indicate in prior Super Bowls, both local economy benefited and local tax revenues grew.”

The memo points to the economic impacts experienced by other cities who hosted the Super Bowl, noting that Phoenix experienced an “overall impact” of $719.4 million in 2015, and in 2013 New Orleans sales and hotel taxes grew by $10.1 million.

“If San Francisco’s direct local tax revenues are similar to those noted above, they are expected to more than offset any local expenditures on events,” the memo said.

But some supervisors opposed the use of taxpayer dollars for the event. Supervisor John Avalos said The City shouldn’t rely on tax revenues generated by the event to offset the incurred costs.

“The NFL should pay to offset the costs to The City and make up for the inconvenience to residents,” Avalos wrote in a text message to the San Francisco Examiner. “With our hotels already full and our housing stock cannibalized for short-term rentals, do we really need another mega tourist event on the public dime?”

Supervisor Jane Kim reiterated her stance Thursday that taxpayer money shouldn’t go toward the Super Bowl 50 event. She said that “San Franciscans are excited to host the Super Bowl but not on the public taxpayer dime.”

She added, “Our residents expect our dollars to fund affordable housing, mental health services and other city needs not a corporate party. The richest corporations in America can and should pay for their own marketing. It’s important not to leave taxpayers with a fiscal hangover.”

Such a “fiscal hangover” was experienced when San Francisco hosted in 2013 the America’s Cup sailing competition and spent $11 million more than it took in revenues.

Mayor Ed Lee’s spokeswoman Christine Falvey defended the use of taxpayer money. “The Bay Area bid for the opportunity to host the Super Bowl because it will bring an enormous economic boost to the entire region and leave a lasting legacy,” Falvey said in a statement. “For San Francisco that means full hotel rooms, thousands of visitors and jobs for residents. We also expect significant direct revenue to the city through hotel and sales tax.”

The Super Bowl 50 Host Committee is setting aside $500,000 to help offset costs if The City spends more than $4 million.

“The City is going to come out in the black,” said Nathan Ballard, a spokesman for the committee.

Further discussion over the costs is expected to occur Monday, when the Board of Supervisors Land Use and Economic Development Committee holds a follow-up hearing on the issue.

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