Financial plan for downtown stadium gets first public airing
The financial plan for a $1-billion football stadium and a new wing of the Los Angeles Convention Center received its first extensive public review Wednesday, with members of a City Council committee pressing city officials to show that the two projects would not harm the city’s bottom line.
Councilman Bill Rosendahl urged financial analysts to describe the worst-case scenario that could occur if the city endorsed the plan. He also voiced fears that stadium developer Anschutz Entertainment Group was pursuing a deal that is “very risky.”
Chief Legislative Analyst Gerry Miller, who examined the stadium plan, said he is satisfied with the guarantees in the proposal. Those include a $50-million letter of credit from AEG in the first four years of the deal, followed by a $28-million letter of credit between 2016 and 2019.
“I cannot envision a reasonable scenario [in which] there is a hit to the city treasury,” Miller said during the standing-room-only meeting at City Hall.
AEG has promised to privately build the stadium just west of Staples Center. To make room for the stadium, the city would need to demolish and relocate a section of the Convention Center. That would require issuing $275 million in bonds. Of those bonds, AEG would be responsible for roughly $80 million, according to the plan. Part of those bonds would be repaid from revenue generated by installing 41 billboards on the publicly owned Convention Center.
Councilwoman Jan Perry said the plan would not “cost the taxpayers a dime.” And she asked the city’s economic consultant, Bill Rhoda, what would happen if those Convention Center signs, particularly the ones facing the 10 and 110 freeways, offered digital images. Rhoda said the value of each sign would double.
While Perry focused on the signs, Councilman Bernard C. Parks said he wanted negotiators to push for an NFL team to play at the Los Angeles Memorial Coliseum and not the Rose Bowl in the years leading up to the completion of the stadium.
“That’s essential as part of the discussion,” he said.
The committee will hold another hearing Thursday in Van Nuys. A full council discussion is slated for Friday, but a vote is not expected for at least a week.
If the council approves the proposal, negotiations will begin on a binding financial agreement between the city and AEG.
-- David Zahniser and Kate Linthicum at Los Angeles City Hall
Image: A rendering of the proposed stadium. Credit: AEG Digital Group