City panel wants assurances on football stadium costs

The National Football League stadium proposal for downtown Los Angeles must include assurances that a "financially sound entity" will stand behind the developer's pledge that the plan will impose no financial burden on the city, a mayoral-appointed panel of experts said Friday.

That goal was included in a series of items that a blue ribbon commission selected by Los Angeles Mayor Antonio Villaraigosa promised to focus on in the coming months as it evaluates the $1.4-billion plan for a stadium, new exhibit hall and parking on city-owned Los Angeles Convention Center land.

City officials have noted that the entity that would serve as the project's actual developer is a limited-liability subsidiary of Anschutz Entertaiment Group, a global arena and entertainment company.

L.A. Event Center LLC is similar to other limited-liability subsidiaries AEG has used to build Staples Center and L.A. Live, adjacent to the proposed stadium site. Such subsidiaries are common in business and development projects. But one function can be to help guard parent firms from financial exposure.

Under AEG’s initial proposal to the city, L.A. Event Center would be the one committed to covering any shortfall in tax revenues needed to repay $350 million in city borrowing for the Convention Center work.

AEG officials have said "we continue to stand behind our commitment of developing an Event Center and Stadium at no cost and no risk to the taxpayers." But the company has declined to discuss what sort of backup to that pledge it will offer, citing ongoing City Hall negotiations.

First Deputy Mayor Austin Beutner, the blue ribbon panel’s co-chairman, said, "We’re looking to make sure the AEG vehicle that stands behind all of this is financially sound."
 
Other topics "framing" the panel’s review will be the potential effects on the city's deficit-plagued operating budget, the number and quality of jobs that would be created and the project’s potential to attract new conventions and tourism.
 
The mayor and some City Council members already have spoken glowingly of the project. And the blue ribbon panel has had to answer questions about its independence, given some members’ past ties to AEG.
      
The stadium/event center "has the potential to transform Los Angeles," the panel said in a statement. But it should only be approved "if we are certain it can be completed without taxpayer funds, traffic impacts are mitigated and the promised jobs go to Angelinos."

-- Rich Connell

Image: Artist's rendering of proposed stadium

Comments

[Steve Crisp]

AEG officials have said "we continue to stand behind our commitment of developing an Event Center and Stadium at no cost and no risk to the taxpayers."

Uh, if the city is putting up money then there is always a risk of loss for that investment. And since the city has no money of its own, then that puts the taxpayers at direct risk.

You want to build a stadium? Fine. But don't claim that it is risk free. That is nothing but a complete lie.

[EnemyOfTheState]

Field of Dreams Failure.

[Ken Murray]

This is an example of city planning at it's best.

It should be clear at the end, exactly what is involved, and all the risks.

When the building begins, there should be no suprises.

This project has the potential to be transformative for our city, and doing it right is the only option.