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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 can be found on the city's website—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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