SANTA CLARA -- The San Francisco 49ers and the city of Santa Clara are ready to take out a new mortgage, and they expect to spend a lot less than previously thought -- perhaps saving $90 million over the long run.

The project's financial advisers Tuesday laid out a game plan to refinance the $850 million public loan taken out 14 months ago to pay for the bulk of the team's new stadium.

Big fees and interest costs will add hundreds of millions of dollars to the $1.2 billion construction cost while the city and team pay back the loan over the next three decades. But since construction began a year ago, interest rates have dropped. In addition, officials need to borrow less money because fans have gobbled up costly seat licenses quickly, giving the Niners and city officials a chance to take on less debt.

The exact long-term debt won't be known until after Goldman Sachs, which is leading the financing process for the team and city, finishes negotiating with lenders in June. But officials are planning to lock in interest rates that will be about 1 percentage point lower than expected -- and that adds up to about $90 million in savings over a 26-year repayment span.

"The stars have aligned," Gregory Carey, managing director for Goldman's investment banking division, said Tuesday at 49ers headquarters, next to the stadium site. "The market is roaring, construction is going great; (seat) sales are going as well, if not better, than expected."


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Still, the construction cost -- which has grown hundreds of millions of dollars since the project was proposed in 2006 and approved by voters in 2010 -- remains unchanged, as will the plan to pay for it. There will just be less total money to pay back over the long term, which is good news for the Santa Clara Stadium Authority, the public agency created to take on the debt and build the stadium.

Critics had feared the stadium would not create enough revenue to pay back the debt and tried, unsuccessfully, to place a referendum on the ballot that would have stopped the loan.

"I'm sure it'll make our residents feel better that we actually have a successful financing plan for the future," Councilwoman Lisa Gillmor said Tuesday before the City Council, which acts as the Stadium Authority board, heard a presentation on the refinancing from Goldman Sachs. "It's a super-favorable economic window for us now."

The board will have final approval of the new deal in June.

It will cost at least $69 million in initial financing costs to refinance the loan, plus much more in interest and fees over the long run.

The new projections show the project debt will fall by about $216 million, to roughly $634 million, by the time the stadium opens in summer 2014. That's mostly because fans continue to submit advance payments faster than expected for seat licenses, which allow Niner faithful the opportunity to buy season tickets at a cost of $2,000 to $80,000 apiece. Fans have committed to buying more than $410 million in seat licenses so far.

By the time fans finish paying off their seat licenses in 2022, the loan is expected to shrink to less than $350 million. The remaining debt will be paid off with revenue from naming rights -- a corporate sponsor is still in the works -- ticket fees and rent from the 49ers, which is expected to be in the neighborhood of $30 million a year.

Most of the debt will be 25-year, fixed-rate bonds, while the rest will be five-year, variable-rate bank loans. Carey said the projections show that debt will be gone by 2039, and that includes a buffer of several million dollars per year to pay for stadium operating costs and other expenses.

Although the stadium is 40 percent complete, project officials say the construction cost is unlikely to rise since the riskiest and most expensive portions of the development -- the steel and concrete frame -- are mostly finished.

"They're making a decision now that will be beneficial to them over 30, 40, 50 years," said Santa Clara County Assessor Larry Stone, a supporter who helped locate the project site next to Great America. "I can't think of a more opportune time to refinance."

Contact Mike Rosenberg at 408-920-5705. Follow him at Twitter.com/rosenbergmerc.