Biz ties link LA stadium panel to venue planner
Feb. 8, 2011
By JACOB ADELMAN
LOS ANGELES (AP) -- The seasoned local business leaders picked by the mayor to analyze plans for a downtown NFL stadium on the public's behalf seem to have one thing in common: deep financial, political and civic ties with the company promoting the venue.
Mayor Antonio Villaraigosa' s panel includes a former governor who received generous donations from entities connected to the owner of Anschutz Entertainment Group; entertainment executives that have partnered with the firm or its affiliates; and business owners who have served alongside company president and CEO Tim Leiweke on local civic boards and commissions.
That makeup could cast doubt on its ability to objectively evaluate the stadium project that may involve financial risk for the cash-strapped city, said Robert Stern, president of the Center for Governmental Studies in Los Angeles.
AEG's plan calls for the city to issue $350 million in bonds to relocate a huge convention center structure where the 64,000-seat stadium would be built, although the company has promised to service that debt and pay anticipated shortfalls.
City officials must also approve AEG's lease for space on the city-owned convention center property. AEG has also sworn it will pick up the entire $1 billion tab for the stadium itself.
"The question is: Is this commission designed to watch out for taxpayers, or is it designed to make sure the stadium gets built?" Stern said.
The plan is one of two competing proposals that aim to bring football back to Los Angeles some 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.
Both camps have said they hope to recruit a team -- and possibly two -- from among those in the league that need a new stadium to maximize revenue but are unable to get one built in their current locations.
Villaraigosa announced his unpaid Blue Ribbon Commission on the planned venue last week at a lavish promotional event timed to the disclosure of a naming-rights deal with Farmers Insurance Exchange worth at least $700 million -- if a team can be lured to the city.
The mayor, an enthusiastic supporter of the downtown proposal, promised that the commission would help ensure that the plan puts taxpayers' interests first.
But a look at the commission members' backgrounds could raise concerns over its independence. The members include:
-- Gray Davis, former governor of California. AEG owner Philip Anschutz and his affiliated companies contributed more than $93,000 leading up to Davis' successful re-election campaign in 2002, according to a tally of campaign filings by Berkeley-based MAPLight.org, which tracks political donations. The entities also contributed $50,000 in opposition to the 2003 gubernatorial recall that cost Davis the governorship and resulted in the election of Arnold Schwarzenegger.
-- Michael Lynton, chairman and CEO of Sony Pictures Entertainment, who serves as the panel's co-chairman. Sony Pictures paid $60 million to AEG's concert promotion business, AEG Live, and the Michael Jackson estate for footage of the late pop star's rehearsals that were later released as the $252-million-grossing documentary "This Is It." Sony and AEG collaborated on the production of the film, which premiered during a heavily promoted October 2009 event at the AEG-owned LA Live hotel and entertainment complex near the site of the planned NFL stadium.
-- Richard Nanula, principal at Colony Capital LLC. Colony, who helped pair Jackson with AEG for the pop star's planned comeback tour as part of a deal that involved the fund's purchase of a $24 million mortgage on Neverland Ranch just before a foreclosure auction was scheduled. Colony is also the former owner of New Jersey's Meadowlands retail and entertainment complex, where AEG plans to build a new concert venue.
-- Sherry Lansing, former chairwoman and CEO of Paramount Pictures. Lansing ran Paramount in 2001, when Anschutz's production company, Crusader Entertainment, signed a three-year financing and distribution deal with her studio. The collaboration produced the film "Sahara."
-- Bert Boeckman, president and owner of the North Hills-based Galpin Motors auto dealership. Boeckman sat alongside Leiweke on former Mayor James Hahn's Council of Economic Advisers.
-- Andrew J.C. Cherng, founder and chairman of Panda Restaurant Group Inc. Cherng served with Leiweke on Villaraigosa' s delegation to the U.S. Olympic Committee in 2006, when the city was seeking to host the 2016 games.
The remaining members -- panel co-chair Austen Beutner, who is the city's deputy mayor and economic policy chief, and Mark Attanasio, managing partner of the investment firm Crescent Capital Group LP -- have no clear ties to the company.
Davis said he was approaching the stadium project with skepticism -- especially over whether it could be built without public money -- and that the cynicism won't be eroded by the donations he received from AEG.
"The fact that people who may have an interest in this contributed to me six or seven years ago is not going to influence my decision on whether or not this is a good deal for the people of Los Angeles," he said.
Lansing, now a philanthropist whose nonprofit organization focuses on cancer research and public education, said there was no reason for anyone to be concerned about her independence because she's never had a relationship with Anschutz or his companies that would make her biased.
"I had very limited contact with Mr. Anschutz during the time that Paramount made `Sahara' and have not had any contact with him since that I remember," she said.
Boeckman said he has no ongoing relationship with Leiweke. But if he did, he added, it would not influence his thinking on the stadium.
"To me it's important to do the right thing," he said.
A message left for Cherng was not returned. AEG spokesman Michael Roth declined to comment, as did Nanula. Sony Pictures spokesman Jim Kennedy referred questions to the mayor's office, which did not immediately respond to a request for comment.
Political science professor Raphael Sonenshein, of the California State University, Fullerton, said AEG has become such a dominant force over the 13 years since it developed downtown's Staples Center that it might be impossible to find any business leaders who haven't worked with the company or its executives.
"AEG is so enmeshed now in Los Angeles and Sacramento that it would be really difficult to find any people that don't have a conflict of interest," he said.
But Arnold Steinberg, a political strategist who previously advised former Mayor Richard Riordan, said the panel seemed to be an attempt by Villaraigosa' s administration to give itself political cover if the deal turns out to be a bad one for taxpayers.
"They're looking to pass the responsibility on to a group to suggest that somehow, this group of businesspeople will serve a fiduciary responsibility," he said. "It's to pass the buck on decision-making and give the appearance of fairness and objectivity."