AEG sale throws curve in downtown NFL stadium plan
As Mayor Antonio Villaraigosa and other Los Angeles leaders insisted Anschutz Entertainment Group's plan to build a downtown NFL stadium was still on track even though the entertainment giant is up for sale, others asked that the city delay a key vote on the proposal until taxpayers know who the new owner is.
The proposal to build the $1.20-billion stadium is expected to sail through the City Council next week.
The only potential hangup, officials said, is if new owners seek to change the complex and carefully negotiated financial agreements. The documents require AEG, owned by billionaire Philip Anschutz, to make up the difference if revenue from the stadium is not enough to cover the city's debt payments for the project, which includes a $315-million renovation of the convention center.
At a news conference, Villaraigosa sought to assure taxpayers the sale of AEG would not alter those financial obligations.
"Whoever is buying this team is going to live by the deal that we negotiated," he said.
But Wednesday's assurances did not satisfy mayoral candidate Kevin James, a former federal prosecutor who called on the council to postpone a stadium vote until the new owner is known. "It may be an entity with no real history or relationship with L.A., and that's a real risk," he said.
The prospect of new AEG ownership is unsettling for Victor Citrin, who lives in the Pico-Union neighborhood just west of the stadium site. He wondered how a new owner would address traffic and air pollution created by the 72,000-seat stadium — and argued the council should hold off until the sale of the company is completed.
"The new owner is going to be the partner we're going to have to deal with," he said.
Villaraigosa appeared to be the only official who knew about the sale before it was announced late Tuesday. Councilman Bill Rosendahl said he was "stunned" by the news. Even Councilwoman Jan Perry, whose district includes the stadium site and who is considered AEG's closest ally on the council, was in the dark until the day of the announcement.
A combative Villaraigosa defended his decision to keep the information secret and said AEG did not request he do so. He did not tell the high-level analysts as they were evaluating the deal, including $391 million in debt to be issued for the project.
"I'm the mayor. I knew," Villaraigosa said, declining to say how long he had been aware of AEG's plans.
"I'm not going to tell everybody everything we're doing because we want a football team, and a lot of what happens here has got to be negotiated quietly," he said.
An AEG representative had no comment.
Perry voiced continued confidence in the stadium deal, but said she wished the mayor had mentioned AEG was being sold. "I do not like to be surprised," she said. "We are all supposed to be working together."
Even if the council acts next week, the stadium financing agreements won't be executed until AEG shows it has acquired a team for the proposed Farmers Field. That process could take at least until next spring, when NFL owners meet and could consider possible franchise moves.
If and when a team is signed, city officials would issue bonds to pay for the construction of a new wing of the convention center. An existing wing must be demolished to make way for the stadium.
— David Zahniser and Kate Linthicum