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L.A.'s NFL stadium financing plan clears key City Council panel
A plan for luring an NFL stadium to downtown Los Angeles cleared a major hurdle Wednesday, with a City Council panel throwing its support behind the financial framework proposed for the project.
On a 4-0 vote, the council’s Ad Hoc Committee on the Downtown Stadium and Convention Center recommended approval of an agreement with developer Anschutz Entertainment Group to build a $1.2 billion stadium and replace a $275 million wing of the Los Angeles Convention Center.
A vote by the full council is scheduled for Tuesday. Approval of the nonbinding agreement sets the stage for another nine months of talks between the two sides. “This is the table setting, not the meal,” said Councilwoman Jan Perry, who voted for the plan and heads the stadium committee.
AEG has promised to finance the stadium, tentatively named Farmers Field, on its own. For that to happen, however, the city would need to tear down the West Hall of its Convention Center -- and issue $275 million in tax-exempt bonds to pay for demolition and relocation of the exhibition area. Those bonds would be repaid largely from new tax and lease income generated by the two projects, according to the proposal.
Committee members Tony Cardenas, Ed Reyes and Bill Rosendahl voted for the proposal. Of the three, Rosendahl had been the biggest skeptic, firing off a series of letters asking about the stadium’s impact on city finances and convention center bookings. In their response, the city’s negotiators told Rosendahl that AEG has promised to reimburse the city for any convention business lost as a result of stadium construction. The company also will cover any shortfalls in tax and lease revenue needed to cover the bond repayment, officials said.
“I’m delighted to see all these answers to my questions,” Rosendahl said shortly before voting for the plan.
As part of its vote, the committee also recommended that the city retain Nixon Peabody, a law firm hired to analyze the project’s bond financing, even though the company disclosed that it has three potential conflicts of interest. One is that it represents Regal Cinemas, a tenant of AEG’s LA Live entertainment complex, which is near the stadium site. Philip Anschutz, chairman of AEG, is also an investor in Regal, according to city officials.
A second conflict involves Nixon Peabody's representation of Anschutz Exploration Corp., another Anschutz company. A third is that a lawyer with the law firm previously worked for Majestic Realty, which is backing a competing stadium plan. Deputy City Atty. Marilyn Garcia said those client relationships would not compromise Nixon Peabody’s work on the stadium deal for the city.
Fewer than 50 people showed up for the evening committee meeting. The session was a sharp contrast to Friday’s council meeting, when hundreds of union members, business officials and high school football players packed the council chamber to push for approval of the deal.
Nevertheless, the proposal drew criticism from Quentin Fleming, a Pacific Palisades-based management consultant who said he believes that AEG’s financial return on the stadium will be more than triple the amount projected by the city’s economic consultants. Fleming also said those consultants should have independently verified the numbers submitted by AEG.
“It would be beneficial if we could have an independent person, someone without a vested interest, perhaps even a city employee themselves, take a look at the numbers,” he said.
The unanimous support for the project drew criticism from Venice resident David Ewing, who compared the stadium discussion at City Hall to the run up to the Iraq war in the U.S. Congress eight years ago. “It’s all flag waving and rah rah rah,” he said.
Source: LA Times
On a 4-0 vote, the council’s Ad Hoc Committee on the Downtown Stadium and Convention Center recommended approval of an agreement with developer Anschutz Entertainment Group to build a $1.2 billion stadium and replace a $275 million wing of the Los Angeles Convention Center.
A vote by the full council is scheduled for Tuesday. Approval of the nonbinding agreement sets the stage for another nine months of talks between the two sides. “This is the table setting, not the meal,” said Councilwoman Jan Perry, who voted for the plan and heads the stadium committee.
AEG has promised to finance the stadium, tentatively named Farmers Field, on its own. For that to happen, however, the city would need to tear down the West Hall of its Convention Center -- and issue $275 million in tax-exempt bonds to pay for demolition and relocation of the exhibition area. Those bonds would be repaid largely from new tax and lease income generated by the two projects, according to the proposal.
Committee members Tony Cardenas, Ed Reyes and Bill Rosendahl voted for the proposal. Of the three, Rosendahl had been the biggest skeptic, firing off a series of letters asking about the stadium’s impact on city finances and convention center bookings. In their response, the city’s negotiators told Rosendahl that AEG has promised to reimburse the city for any convention business lost as a result of stadium construction. The company also will cover any shortfalls in tax and lease revenue needed to cover the bond repayment, officials said.
“I’m delighted to see all these answers to my questions,” Rosendahl said shortly before voting for the plan.
As part of its vote, the committee also recommended that the city retain Nixon Peabody, a law firm hired to analyze the project’s bond financing, even though the company disclosed that it has three potential conflicts of interest. One is that it represents Regal Cinemas, a tenant of AEG’s LA Live entertainment complex, which is near the stadium site. Philip Anschutz, chairman of AEG, is also an investor in Regal, according to city officials.
A second conflict involves Nixon Peabody's representation of Anschutz Exploration Corp., another Anschutz company. A third is that a lawyer with the law firm previously worked for Majestic Realty, which is backing a competing stadium plan. Deputy City Atty. Marilyn Garcia said those client relationships would not compromise Nixon Peabody’s work on the stadium deal for the city.
Fewer than 50 people showed up for the evening committee meeting. The session was a sharp contrast to Friday’s council meeting, when hundreds of union members, business officials and high school football players packed the council chamber to push for approval of the deal.
Nevertheless, the proposal drew criticism from Quentin Fleming, a Pacific Palisades-based management consultant who said he believes that AEG’s financial return on the stadium will be more than triple the amount projected by the city’s economic consultants. Fleming also said those consultants should have independently verified the numbers submitted by AEG.
“It would be beneficial if we could have an independent person, someone without a vested interest, perhaps even a city employee themselves, take a look at the numbers,” he said.
The unanimous support for the project drew criticism from Venice resident David Ewing, who compared the stadium discussion at City Hall to the run up to the Iraq war in the U.S. Congress eight years ago. “It’s all flag waving and rah rah rah,” he said.
Source: LA Times