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L.A. wants guarantee NFL team wouldn't leave proposed downtown stadium

April 18, 2011 |  2:47 pm

Naming-rights announcement for the proposed NFL stadium in downtown Los Angeles

A National Football League team would have to commit to remaining in a proposed downtown Los Angeles stadium for 20 to 30 years for the city to approve the project, a key city negotiator said Monday.

The city will seek “hard-and-fast agreements” that a pro football franchise would not leave a proposed $1 billion stadium to be built on public land next to the Los Angeles Convention Center until city debt related to the project is repaid, Chief Legislative Analyst Gerry Miller told a City Council panel.

The developer, a subsidiary of Anschutz Entertainment Group, has proposed tearing down and rebuilding part of the Convention Center to make way for a privately owned stadium that would complement the firm’s other holdings in the area, including Staples Center, the LA Live entertainment district and two hotels.

The Convention Center work would be financed by $350 million in city borrowing. AEG has promised to make up any shortfall in new tax revenue needed to repay the debt.

Under questioning from Councilman Tony Cardenas, Miller said the added city debt would be repaid over 20 to 30 years and officials want to see contracts ensuring that an NFL team “will be staying as long as those bonds are outstanding.”

Los Angeles officials and fans are sensitive about such commitments because the city has lost two NFL teams in the past — the Raiders to Oakland and the Rams to Anaheim and eventually St. Louis.

At this point, neither AEG nor a competing developer proposing a stadium in the city of Industry has an NFL team lined up.

At Cardenas’ request, Miller agreed to explore how the city can guarantee that a team would not leave the stadium with the city still owing money. “This is one of the major issues,” Miller said.

Marc Ganis, a Chicago-based consultant who has worked on many NFL stadium projects, told The Times on Monday that securing a long-term commitment  from a prospective Los Angeles team is possible but "it won't be simple." Complications include the Los Angeles area's poor record with past NFL teams, the lack of a major public subsidy for the stadium and the fact that the team may not also own the stadium, he said.

However, to protect themselves, cities can require that any public indebtedness be paid off before a team can relocate, he said.   

Negotiations on a preliminary stadium agreement are expected to take about three months.

Monday’s exchange came at the first meeting of a special council committee charged with reviewing the stadium plan. The 8 a.m. session at City Hall was attended by about 30 union leaders, representatives of AEG, present and former city officials and city staff members.

The panel agreed to explore holding future meetings in various parts of the city at more convenient times for working residents.

Members also approved preliminary negotiating principles for Miller and other city representatives. One proposed term could generate several million dollars a year in new revenue for the city. At least half of any new property, sales, business and other taxes spun off by the development should go to the city’s general operations account, city officials agreed.

That will be a key bargaining point. The more revenue the city takes from the project, the less that will be available to repay Convention Center reconstruction costs, potentially increasing AEG’s future outlays.

Councilman Bill Rosendahl, the panel’s vice chairman, signaled that he may press for even more city revenue, including a share of the reported $700 million in naming rights AEG has already sold to Farmers Insurance. “If we own the land ... why shouldn’t we get a portion of the naming rights?” he asked.

Cardenas said the city also needs to scrutinize AEG’s proposals to control additional advertising signage around the stadium, including at the Convention Center.  “We need to be careful not to leave anything on the table,” he said.

Several representatives of unionized hotel workers, stage hands, electricians and construction workers strongly endorsed the project, saying it would help revive the city’s job market -- unemployment in the city is slightly above 13%. AEG has estimated 12,000 construction jobs and 10,000 permanent jobs will be created if the stadium is completed.

Committee Chairwoman Jan Perry, who represents the project area, said she hopes a deal can be reached so the Convention Center can be modernized. Various studies have shown major improvements are needed to make Los Angeles more competitive with big convention cities such as San Diego, Anaheim and San Francisco. But the cash-strapped city hasn't been able to come up with a plan to finance the upgrades.

AEG officials expressed confidence that agreement could be reached on matters discussed Thursday but declined to delve into specifics issues. “Everything is part of the negotiations,” said Michael Roth, AEG’s vice president of communications.

RELATED:

Approvals for L.A.'s downtown football stadium could take a year, report says

-- Rich Connell   

Photo: Cheerleaders added to the celebratory mood at the naming-rights announcement for the proposed NFL stadium in downtown Los Angeles on Feb. 1. Credit: Al Seib / Los Angeles Times

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