L.A. developers tweak pitch to city
The chief of the company proposing an NFL stadium for downtown Los Angeles revealed tweaks to his pitch to the city, including plans for a revenue source that would help the city repay bonds to fund the demolition and relocation of a convention center hall displaced by the stadium.
AEG President and CEO Tim Leiweke said Monday night at a town hall meeting attended by fans and skeptics of the arena plan that he would ask the city to issue less than $300 million in those bonds, down from $350 million. The savings would be realized by privately building and managing parking garages that the company had previously intended to be city property.
The company would expect the city to apply ground lease payments for the stadium and new property tax revenue toward its repayment of that debt on the building, which would be publicly owned, Leiweke said.
Leiweke also wanted revenue from the signage rights that AEG has for outdoor advertisements around the city-owned convention center to go toward bond repayment. The combination of revenue sources would be more dependable than the previously proposed plan, which included ticket taxes and new parking lot revenue, he said.
”We’re going to get you contracts from AEG that will pay off the bonds so you never have to be at risk on those bonds,” he said, adding that the new repayment scheme would be formally proposed at a City Council subcommittee meeting Thursday.
The Los Angeles officials overseeing stadium negotiations have said that city rules would permit only 50 percent of new city revenue to go toward bond payments. Leiweke did not address whether those rules would apply to the new repayment scheme or if the company expects rent on the parking lot parcel to be applied to debt repayment.
He vowed to guarantee the stadium’s completion in case AEG had financial troubles that keep it from finishing the work. A bond would be posted after ground is broken on the new convention center building, he said.
AEG’s $1 billion-plus plan for a 72,000- to 76,000-seat stadium on part of the city’s convention center campus is one of two competing proposals to bring professional football back to Los Angeles, 15 years after the Rams and Raiders left the nation’s second-largest market.
Warehouse magnate Ed Roski has permits in place to build a separate 75,000-seat stadium about 15 miles east of Los Angeles, in the city of Industry, but also hasn’t secured a team.
Both camps have said they hope to recruit a franchise – and possibly two – from among those in the league that need a new stadium but are unable to get one built in their current locations. The San Diego Chargers, Oakland Raiders, Minnesota Vikings and Jacksonville Jaguars are among the teams mentioned as possible candidates.
Leiweke would not say at the town hall which teams were in his sights. He insisted some had expressed a reassuring willingness to move to Los Angeles.
”We are confident enough to spend $45 million dollars” for design drawings and other preparations, he said.
The gathering grew testy at times, especially when speakers suggested that the city-issued bond deal represented a subsidy or challenged Leiweke’s faith that the project would vastly boost employment and become a major economic boon.
After speaker Quentin Fleming cited academic studies demonstrating that big stadium projects generate little economic activity, Leiweke dismissed the argument as coming from professorial types who have never built anything on their own. Fleming – a business professor at the University of Southern California – retorted that builders have no special insight on the effect of their creations.
”It doesn’t take a weatherman to know which way the wind is blowing,” Fleming said.
Leiweke also said AEG was completing the lengthy environmental review required by California law, but conceded the company was talking to state lawmakers about how to protect it from what he characterized as frivolous legal challenges to its environmental clearance.
State lawmakers signed a bill in 2009 that suspended environmental laws to allow the venue proposed by Roski’s Majestic Realty Co. to be built. The bill, which nullified a lawsuit filed by residents in the nearby city of Walnut over the project’s environmental impact, infuriated environmental groups.
Leiweke said he hoped the deal AEG is now discussing with lawmakers would contain elements that environmental activists would support.