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Staples Center Bonds Offer a Blueprint for the $350 Million Required for Stadium

By Eric Richardson
Published: Monday, March 07, 2011, at 09:48AM
Farmers Field Gensler

Rendering of the proposed Farmers Field stadium and event center

A four-stop roadshow discussion of AEG's proposed NFL stadium and events center kicked off on Friday with a focus on finances, specifically the $350 million in bonds that the company is asking the City of Los Angeles to issue for construction of a new Convention Center hall.

The arrangement under which the company would back payment for the bond debt is nothing new, AEG and city staff told the panel, likening it to the deal that has covered Staples Center bonds since 1999.

The Mayor's blue ribbon panel on the stadium will hold three more meetings this week, focusing on job creation, environmental impacts and traffic, and conventions and tourism.

In Friday's session, held at Galpin Ford in North Hills, AEG told the panel that it expects ticket fees and tax increment generated at the project to cover the $25 million annual bond payments.

Multiple references were made to the similarity of the potential agreement's terms to those securing the $70 million in bonds issued as part of the construction of Staples Center.

City staff told the panel that each year an invoice is issued to AEG accounting for the income generated by the arena, any credits from negotiated items such as local hiring and the amount needed to cover the bond's principal and interest. If the income is lacking, AEG is responsible to write a check for the remaining amount.

That agreement was amended in 2003, with AEG prepaying $16.5 million to cover its anticipated contribution over the life of the bonds. The city's 2010-2011 budget shows that the agreement is currently earning more in income and credits than it is spending, carrying a $4 million credit into the upcoming fiscal year.

Like the Staples Center agreement, credited income from the stadium would be restricted to that directly connected to the project. Sales tax outside of the stadium and the taxes generated by hotel stays, for instance, would not be applied.

Tuesday's morning meeting of the panel, focused on environmental impact and traffic, will be the only one held Downtown. It will take place at 8am in the Building and Safety Commission Hearing Room (201 N. Figueroa, Room 900).

Monday morning's meeting, which focused on job creation, was held in South L.A., while Tuesday afternoon's meeting on conventions and tourism will be held in Century City (3:30pm; Westfield Office, 1801 Avenue of the Stars).

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