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Looking to Understand the Stadium Deal? $859 Million is the Important Number

By Eric Richardson
Published: Thursday, July 28, 2011, at 07:44AM

Gensler

Rendering of proposed Farmers Field, which would be built on the site of the Convention Center's aging West Hall.

DOWNTOWN LOS ANGELES — If you want to know why City Council seems so eager to see AEG's Farmers Field proposal work, there's one important number that you need to know: $859 million.

That number, presented by Chief Legislative Analyst Gerry Miller during a Wednesday night session on the stadium and events center proposal, is the swing in impact to the general fund that the city would see if it chose to turn down AEG's offer and instead do its own Convention Center renovation in the next ten years.

According to Miller, the proposed $1.2-billion facility would net the city $210 million in "net new" tax revenues over 30 years once money that would be used to repay bonds on the new Convention Center hall is subtracted.

On the other hand, if the city were to pass up the proposal, it would still need to look at a Convention Center modernization plan to make the outdated facility competitive in attracting the types of events that generate hotel room stays and visitor spending. That work would likely require the borrowing of $350 million, Miller told the Councilmembers on hand for the ad-hoc committee meeting. Over the life of the bonds, that capital would cost the city $650 million.

"The city is in the convention center business," said City Administrative Officer Miguel Santana. "It's an important part of what we do. Like anything else, we need to invest in it. In the context of the next ten years, it's hard to imagine that we wouldn't make that investment on our own if we intend to remain competitive."

The council's ad-hoc committee studying the project will meet again on Thursday evening in Van Nuys, and then the issue will move to the full City Council on Friday. That body is not expected to take final action on the proposed deal announced earlier this week, and Councilwoman Jan Perry told those in attendance at Wednesday's session that she intends to have another meeting of the ad-hoc committee next week before the item goes to Council for a final time.

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Conversation

downtown vibe on July 28, 2011, at 08:42AM – #1

I agree with a lot of the argument here, but there are a few assumptions being made.

Assumption 1: The City is in the Convention Center business and intends to be in Convention Center Business.

It is my understanding that the City has paid 10s of millions of dollars to keep the convention center doors open. It is also my understanding that the City has proposed simply turning the ENTIRE complex over to AEG. If that is the case, maybe the City wouldn't be doing the modernization at all. AEG would.

Assumption 2: The Pico Hall can be built over Pico Blvd. I think it would be a very likely terror target. I can't see it being constructed like this. If it's not, then it needs to go on to solid ground. Where does it go?

Assumption 3: The Convention Center is not capable of generating exactly the same billboard revenue on its own, as AEG would generate by changing the signage rules at the site.

These numbers are deliberaly being left out of the calculations to make it look like AEG is bringing more to the table. Also, their very small predictions of $5 million per year generated by billboard revenue are most likely BS. AEG makes its money off of billboards and branding..the rest is a side business.

And one other comment.

The Mayor's office says we are in the "business" of convention centers. The only reason why you would be in this business is to generate a ripple affect in the area with hotel rooms and restaurants. In the end the City would be healthier and collect more taxes.

Why does the same Mayor insist we should be selling off all our parking garages. In fact he wants to sell Pershing Square even though it has been paid off for decades. Wouldn't the same logic apply? The garages are a piece of our infrastructure that should be used to create a healthier economy.

What would cause the Mayor to make such seemingly inconsistent proposals?

David McBane on July 28, 2011, at 05:07PM – #2

@downtown vibe - Your assumption 1 is not an assumption at all. The City owns and operates the Convention Center. I don't know how you can say this deal is assuming the City is in the convention center business when it clearly is. Also, since the current CC owes so much in bonds, if the City decided to close the CC, they would have to pay those bonds completely out of the general fund. That would bankrupt the City. So the City is staying in the convention center business for the foreseeable future.

Secondly, you make a huge assumption that AEG wants the CC without the stadium. AEG won't touch the CC despite years of the City trying behind the scenes to get them to take over the management of it.

Assumption 2 - Again, this is not an assumption. There are several convention centers in this country that are built over streets. Also, please remember that the L.A.'s CC already has walkways over Pico. Then you are also making the assumption that engineers can't make a new CC safe. That's just false. There are plenty of engineering solutions to potential bombs. You are also assuming that terrorists are waiting for something being built over Pico before trying to bomb it. Let's remember that McVeigh blew-up the Federal Building in Oklahoma City from a curbside. If a terrorist really wanted to do that today, they could. So a renovated CC is not adding to any safety issues - actually, it would be reducing them because the new CC will be built better than the old one.

Assumption 3 - I don't think the CC can do as well as AEG because AEG has so many more contacts than the CC management does. And if the CC could really do it, why have they not so far? And as you said, AEG is in the business of selling billboard space - the current CC management is not.

As far as your last question, he's a politician. You can ask the same question of every politician.

downtown vibe on July 29, 2011, at 10:09AM – #3

David,

I appreciate the response, I think these issues need public discussion.

The real question is this? Does the City view the ownership and management of the convention center as a asset or a liability. I suppose it would depend on who you talk to, but I am under the impression that the City is positioning itself to turn the venue over to AEG. In that process, the entire complex would gain trenmendous value because it would turn into California's largest billboard. This is like getting the property declared an Indian Reservation, so it could be turned into a giant casino.

Who said anything about closing the Convention Center? If the City got desperate, it could put millions of dollars of billboards on the outside of the building.

My point is this, there are far more scenerios that could play out with the Convention Center, but ONE scenerio is being escorted through.

As for the Football Stadium, I like it! I even like the architectural design. But the first thing my co-workers asked was "but how is it going to fit on the site along with a new convention hall?" The truth is, this plan calls for the convention hall to be built where no buildable land existed... Suspended over a busy street.

You think the building would be safe from terror attacks. I do not. You say that the Oklahoma City bomb blew up the Federal Building from the street, therefore there is no point in trying to prevent a truck bomb from exploding directly underneath the floor of a convention hall. I think you are actually proving my point. That truck bomb in Oklahoma killed over 270 people even though only a very small amount of explosive energy managed to hit the building. If a bomb of the same size was detonated under the middle of the new hall, the majority of the explosion would impact the structure. I don't think there is any kind of technology available to this builder that would guarantee the safety of people above. Maybe other suspended convention halls exist someplace else in the US, but how many of them are being built next to a new 64,000 seat stadium, two concert venues, and an entertainment complex. This complex symbolizes everything about American cultural excess that our terrorist friends are trying to destroy!

Why make it easier for them?

I suppose you could put Pico Blvd. underground. That would at least direct a blast away from the building.

DenOfLosAngeles on July 29, 2011, at 12:16PM – #4

I hope this will entice the Los Angeles Chargers to move back to Los Angeles. Forty years is a long time to wait.

David McBane on July 29, 2011, at 01:00PM – #5

@downtown vibe - The City views LACC as a liability. LACC does not raise enough money to cover all of its debt obligations so general funds have to be used to cover the shortfall. The City is already desperate yet has not put the billboards up. You know why? Because they don't know how since they are a City, not a billboard management company. Plus, the City has been trying for years to find a solution to LACC's ongoing shortfalls and has not come-up with anything to date. The City is incapable of managing LACC effectively. That should not be a surprise - the City is a city, not a business owning and managing convention space.

There are not "far more scenarios" that the City is ignoring. They just know that AEG's proposal is finally a real solution to getting LACC renovated without spending City money. And it comes with a stadium that doesn't cost taxpayer money to boot!

The terrorist thing is just a non-issue. Seriously, there a ton of engineering solutions to minimize the impact so people don't get killed. The building would still suffer major damage but it can be built so that it lasts long enough after an attack so that people can get safely out.

Also, you seem to think that the renovation would turn LACC into some huge terrorist target. It's already as big as a target as it is gong to get. They can drive a truck bomb up to the steps of the Center now so what's stopping them? It's not like they are sitting around waiting for the Center to be expanded and then attack it. That logic reminds of this article in The Onion: http://www.theonion.com/articles/alqaeda-claims-us-mass-transportation-infrastructu,21008/

Obviously the article is a joke but amazingly you are parroting the same idea.

downtown vibe on July 29, 2011, at 08:14PM – #6

David,

Every building design includes a certain amount of risk to the people inside.

The question is, how much is too much?

You evidently don't see the same amount of risk that I do.

The Mayor has the Building and Safety Department and the Planning Department in his back pocket. There is no check and balance at the City level.

We should just make sure that the Department of Homeland Security is included in the circulation of the EIR.

William Crandell on July 30, 2011, at 10:29AM – #7

Well how about the visitors and convention bureau, the upper echelons of the police and fire departments and the board of public works. Yes, of course, they're all known for, have had a track record of simply kow-towing to whoever is mayor and of course, every single inspector and plans examiner at building and safety is known for having absolutely zilch integrity.

Whether by design or by blockheaded obstinate shortsighted naivete, you're serving just a shill for the other side, the proposal for the glorious City of Industry, somewhere east of South El Monte - the one with all the heart and soul of a wet mop. You may know scads about structural design but you know nothing regards Force Protection.

downtown vibe on August 03, 2011, at 07:36PM – #8

William,

Shilling for the other side? WTF are you talking about? This is not about one side or the other. It's about saving lives.

Thanks for your idiotic remarks Mr Chow.

downtown vibe on August 03, 2011, at 08:04PM – #9

William,

I have seen some very slippery people get promoted to these echelons that you speak of, precisely because they have NO moral compass at all..you have anti-terror experts with business degrees making public safety decisions and putting out press releases. You might even find one on the front of the Downtown News this week.

How did those Laker riots work out for you?

Who is showing their naivete?

You think the Board of Public Works is above reproach? Do you think knowing anything AT ALL is a requirement to be on the Board and make $130,000 per year?

Do you know the one that just left was the Godmother of Antonio Villaraigosa's kids. They are there only to advance the Mayor's agenda, When they outlive your usefulness, they are replaced.

I may be jaded at this point in my life but I am certainly not naive and I SHILL FOR NOBODY.

How about you just show Homeland Security how the people at a major convention will be safe in this new building suspended over Pico Blvd. with unrestricted truck access underneath.

I'd love to see the project finished. Prove me wrong!

William Crandell on August 03, 2011, at 09:56PM – #10

Again, your obstinacy inherently shills for the proposal east of South El Monte. I've made every point I need to in regards to measures that can be taken to limit damage to a structure bridging across Pico. If you're a structural engineer, why do you state that a building across Pico would be suspended? Suspended from what, air hooks?

About the Laker riot: so.... Staples Arena should never have been built to begin with, huh? Or perhaps they should have let the other team win, because a bunch of jackasses outside might lose it.

I'd feel much more confident in your allegations about every member of the city board of public works if you were to act like you've got a pair and make comments about them on this website with your real name. You've already exposed yourself legally as is.

Please, don't tell me about working with people who have no moral compass. OHHHH, how I could tell stories about such things - involving very famous characters, no small amount of intrigue and lots and lots of money. Even a couple of death threats.

downtown vibe on August 04, 2011, at 09:30AM – #11

A big part of the government process is protecting public safety through risk management.

This process has become so politicised that nobody is looking out for public safety anymore. Instead, they are measuring risk in terms of impact on campaign contributions.

My point about LA Live is this.

STOP UNDERESTIMATING THE POTENTIAL SAFETY RISK INVOLVED IN OPERATING A VENUE OF THIS SIZE.

The Laker riots should have been a wake-up call. They showed a basic incompetence on the part of the City to control mob behavior. Mobs are an increasing threat in this City.

There is a general culture of spin and damage control that is permeating City Hall and the LAPD. Right now, the golden boys in the system are the ones that take orders the best, and use the media most effectively.

We need to make sure that the department heads are free to speak honestly about REAL SAFETY issues. It's time to put the department heads back in the Civil Service class and insulate them from the politics of the Mayor's Office.

We are lucky that there are several agencies above the City power structure that will be monitoring this project.

You say I should...

"act like you've got a pair and make comments about them [The board of public works]on this website with your real name. You've already exposed yourself legally as is."

Mr Crandell, I didn't come here to throw insults at "EVERY" Board member. I'm here to make sure public safety is not compromised because of politics and greed. Period.

William Crandell on August 04, 2011, at 01:57PM – #12

Stop conflating the issues of management & policing with that of design and engineering, period, Mister/Miss Vibe.

Such an obsession with control. Such fear. Such timidity. So representative of the time we now live in.

I mean, in this day and age and with such a mindset, why build an arena, a coliseum, Dodger Stadium, a Broad museum, a concert hall or a convention center? Everybody stay cooped up at home, install bars on the windows and buy an armored car. Forget Downtown and of course, watch Fox News for the rest of our days.

downtown vibe on August 04, 2011, at 03:17PM – #13

The queston is, what would motivate somebody to do it WRONG.

Money?

downtown vibe on August 04, 2011, at 03:37PM – #14

How do you get from me questioning the design and safety of a single building to suggesting that I think we should all stay home.

Let me make myself clear...

I support a football stadium.

I support the expansion of the Convention Center.

I live downtown, which I wouldn't do if I didn't think it was safe.

I also think the proposal to put a convention hall over a busy street where a truck bomb could blow it up without warning ....IS A DUMBASS IDEA.

How about this..Are you willing to put your real name on an endorsement of this design...Mr "why don't you grow a pair?"

We can play all night if you want...

William Crandell on August 04, 2011, at 05:24PM – #15

Cute.

Let's see what the architects come up with.

Your thesis is valid, IF the developer and its architect, the mayor, city council, board of public works and department of building and safety decide to ignore, do not address the issue of force protection.

Yet you remain anonymous and allege that you support the project and allege that you live downtown. One could suggest, rather than allege, that you intentionally shill for the competing proposal. After all, L.A. is ground zero in the world of illusions and more than one corporate entity has sought, constantly seeks to undermine Anshutz.

No. You haven't made yourself clear, anonymous Vibe. The least you could do would be to provide us with the license number on your state registration to practice structural engineering.