Coliseum Deal Reached

The Coliseum Commission has reached a deal, just not the one USC fans are eagerly awaiting.

Governor Schwarzenegger's office announced today that Monday's negotiation between the California Science Center Board (which technically owns the Coliseum and is appointed by the Governor) and the Coliseum Commission produced an agreement that should become official on January 9th after their respective boards approve it. The two parties were essentially operating under an expired agreement that allowed the Commission to pay a small fraction of their rent.

Based on the Governor's press release, it the Commission's basic costs to lease the facility will jump from $80,000 to $1,000,000 per year, but that's still far below recent assessments that had valued the property's rent at $2,000,000.

The lease term of 47 years coincides with the life of the Commission's Joint Powers Agreement. After that time, the Commission's existence would be contingent on a new lease. USC, which essentially sub-leases from the Commission, has asked for a deal that would last as long as 75 years, but the Commission obviously can't sign anything longer than 47 years.

Had this arrangement been in place last year, the Commission would have turned over most of their $1.46 million profit. Keep in mind that any money that the Commission makes gets pumped back into the facility and is not disbursed to any of the participating agencies, Commissioners, employees, etc. This is money that likely would have been put towards additional repairs or saved for deferred maintenance.

Since the State owns the Coliseum, they're essentially collecting their money immediately instead of letting it get re-invested in their property (and held temporarily in a City fund).

While this deal seems straightforward and extremely fair to the Commission (who wouldn't want to get half-off on their rent?), it may push them further into a corner in their negotiations with USC. The major sticking-point in that deal is renovations, and the Commission's cash flow is about to take a significant hit. If they can't afford to make the repairs (after subtracting liabilities, they only have $3.1 in assets), USC is demanding a master lease and will do the repairs themselves.

The Commission is proud of their independence and lack of outside funding, but this makes me wonder if they might have an argument for using State taxpayer dollars for any major upgrades since it would be an investment in the State's facility, not their own. On the other hand, most upgrades will involve technology (jumbotron) or high-traffic areas (bathrooms) and will significantly depreciate by the time the new deal expires.

Photo by Karen Tapia-Andersen / LAT

Comments

[Gerrrg]

I'm not feeling the love. It feels like the situation has been made worse between USC and the Commission, as it now appears the Commission cannot both charge the same as they had in the past, and still fund a remodel/upgrade to the Coliseum. One way or another, USC will have to pay more and will not get the upgrades they wanted.

Is it time for USC to build its own structure, albeit smaller, but under 100% control of USC, and 100% revenues of all events? Nothing wrong with the land east of the 110.

[Gonzo]

I agree. USC needs their own football stadium but it will probably never happen. They already have plans for all of the property surrounding USC. It makes no sense to build another football stadium around the corner from the Coliseum.