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City Touts Stadium Deal as Safe for Taxpayers

By Eric Richardson
Published: Monday, July 25, 2011, at 03:28PM
Farmers Field Gensler / AEG

Rendering showing AEG's proposed Farmers Field next to Staples Center and L.A. Live.

On the same day as NFL player representatives voted to approve a deal that will bring teams into camp, the team that has been negotiating to return the NFL to Los Angeles unveiled a document they hope will take that effort a big step forward without putting taxpayers at risk.

Councilmembers Jan Perry, Bill Rosendahl and Tom LaBonge joined City Administrative Officer Miguel Santana and Chief Legislative Analyst Gerry Miller in a City Hall conference room on Monday to present a draft deal that would allow developer AEG to move forward with Farmers Field, the $1.2-billion stadium the company hopes to build next to Staples Center and L.A. Live. That structure could be ready in the summer of 2016.

Standing in the way is the Convention Center's aging West Hall, and much of the public debate over the stadium plan has been focused on the city's potential liabilities from bonds issued to replace the facility with one that would span Pico Boulevard and attach to the newer South Hall.

Negotiations focused on reducing the city's general fund obligations to repay that debt and on making sure the city could count on revenues promised to repay it.

Under the terms released Monday, payments by AEG would make up approximately 73% of the bond payments, with "net new" taxes contributing the remaining 27%.

Funds will come from a ground lease payment that will start at $6.5 million per year, a $5 million special assessment, a $3.8 million possessory interest tax and approximately $715,000 in annual parking tax assessments on garages operated by AEG.

"Those revenues that we are using are measurable, they are not variable, they are consistant and they are reliable," explained Santana. "All of that was critical in making sure that the taxpayers of this city are not ultimately footing the bill."

While the total bond amount would be roughly $275 million, only $195 million of that would go against the city's books. The rest would take the form of a Mello-Roos district, borrowed funds backed by a special tax assessment against Staples Center and L.A. Live.

AEG CEO Tim Leiweke issued a statement Monday praising the city's negotiating team and expressed confidence that the full Council will quickly approve the document.

"Approval of this MOU will represent a critical milestone in our efforts to break ground on this project within the next year," Leiweke said. "We look forward to continuing to work with the City to take this project to the next step at the same time that we also increase our focus on other key objectives, including progressing design of the project and securing the commitments necessary to bring the NFL back to Los Angeles."

Assuming the city does sign off as expected, AEG's attention now turns to the project's environmental review and the effort to sign a team. "Both are processes that are underway," company spokesman Michael Roth said Monday.

AEG has also previously expressed its hope that the return of NFL football to Los Angeles will include the promise of multiple Super Bowl dates. While the league's labor strife put all such talks on hold, the signing of the new collective bargaining agreement opens the door to their return.

"There will be talks with the NFL coming up when the timing is appropriate," said Roth.

The negotiated deal—which —will be the subject of a trio of City Council meetings this week, culminating in a single-topic meeting of the full Council on Friday, July 29.

All parties emphasized that there is still much to be done before any football comes to Downtown L.A.

"What it means is that the city is moving forward in the discussion," said Perry. "It's a good sign, a positive step."

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User_32

Dion on July 25, 2011, at 04:32PM – #1

Excellent! lets move forward!


David Crowley on July 26, 2011, at 09:35AM – #2

the city of LA does not need a stadium, the county does. I don't think a stadium will have quite the positive impact everyone is hoping. And days when there's a football game, and possibly even another game in Staples, traffic is just going to be horrible in downtown. Just my opinion, I hope this doesn't happen.


User_32

David McBane on July 26, 2011, at 11:23AM – #3

This is the best deal the City of Los Angeles (or any other city for that matter) will ever get to build a stadium. Plus, the plan will fix the Convention Center, all without taking any funds from the City's General Fund or any redevelopment money. This is a good deal for the City.

Traffic - seriously, I can't believe how many people bitch about that and have no idea that 400,,000 drive into Downtown every weekday for work yet the stadium will have 68,000 seats for mostly Sunday games 8 times a year with a bunch of people carpooling and taking mass transit. Dodgers games cause worse traffic than the future stadium and the City still functions.


David Crowley on July 26, 2011, at 06:25PM – #4

@ David McBane

Have you ever been in downtown during a Laker or Kings game? Traffic is significantly worse. I can't give any hard numbers or facts supporting this claim, but when I have to get home from work on a night there is a game, or Artwalk, traffic is a lot worse. Not to mention all the people who work in downtown are travelling in the opposite direction than me, so most of that traffic doesn't effect me.


User_32

David McBane on July 26, 2011, at 08:06PM – #5

@David Crowley - All the time - I work Downtown. Traffic is always worse when there is a game at Staples or when Artwalk is going but for a football game, how many people are really working on a Sunday?

Plus, as I mentioned, this deal comes with a giant redo of the Convention Center at no cost to the City. That is an amazing deal and if it causes some extra traffic a few days of the year, then I think it's worth it. If you have a better way to pay for a remodeled CC while avoiding the traffic issues, then let the City know.


User_32

Dion on July 26, 2011, at 11:39PM – #6

@David Crowley - The traffic increase due to Lakers, Kings, Clipper games is not a problem. Seriously, its an extra couple minutes, who cares? The amount of positives from this project warrant a few minute increase in traffic. Also, most of the events at the Event center will be on Sundays, when traffic is at its lightest downtown. Lastly, there will be many transit improvements by the time this stadium is completed, with an improved Pico Blue/Expo Station, the streetcar, and shortly afterwards, the downtown connector, not to mention the other new rail lines in the county.


User_32

Samuel on July 27, 2011, at 09:05AM – #7

I live north of downtown and I go to plenty of Lakers games and the traffic is way better than a weekday morning or during a Dodgers game.

Plus, the area is served served by the Blue, Red, Purple and very soon Expo Rail Lines. We complain all the time about the traffic and the lack of mass transit. Is time to build things with good access to the existing lines. This is how the great cities of the world are. We all visit other countries and are amazed on how convenient it is to move around but are hesitant to implement those changes here. This is what city living is. That's why we live in LA to have access to what the city offers. If not, why pay the high cost of living?

If we build the stadium outside of the city then we will all complain about how inaccessible the stadium is. What is the worst part of going to a Dodgers game? How inconvenient it is to get there, pay $15 for parking, park, walk half a mile to your seat, walk half a mile back to your car, sit in a jam for half an hour just to get out of the stadium and then deal with the traffic home. Let's be smart. Build the stadium with access to mass transit and forget the car.


Marc Caldwell on July 27, 2011, at 07:48PM – #8

@ David McBane - "Traffic - seriously, I can't believe how many people bitch about that and have no idea that 400,,000 drive into Downtown every weekday"

The numbers you cite refer to the number of people who WORK downtown and not all of them drive. If you've been to Union Station between 7am and 9am, you'll see the masses flooding in via Metrolink and Amtrak and then hopping on the Metro.

More pass through Union Station than Ontario Airport on any normal travel day.


User_32

off the street on July 27, 2011, at 10:06PM – #9

@marc caldwell

but even if 20 percent drove into work, that's still more people than would attend a football game. also take into account traffic also includes people whom maybe just passing thru downtown.

either way its still a great opportunity, the city has managed to squeeze AEG for a pretty secure offer less than 300 million in bonds that eventually will be repaid through various revenue sources. AEG pays the entire cost of the stadium. And even if you are not a football fan, the venue still helps become much more competitive for conventions and events. That are very profitable for the city, just like this weekends X games at LA Live.



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