L.A. stadium plan includes rent payments to city
The proposed developers of a new National Football League stadium in downtown Los Angeles have offered to kick in lease payments for use of city land as part of a financing deal for the multifaceted project, according to a transaction outline submitted to city negotiators Wednesday night.
Sports and entertainment conglomerate Anschutz Entertainment Group lists rent from a proposed ground lease as part of the revenues that would be used to repay city bonds that would be issued in connection with the project.
AEG President Timothy J. Leiweke and First Deputy Mayor Austin Beutner previously told The Times the developer might propose a $1-a-year lease for the city property.
Some City Council members had expressed concern about getting virtually nothing for the stadium land.
The document reiterates promises that the arena itself will be entirely privately financed and that AEG will protect taxpayers by covering any shortfall in payments on the convention center construction.
In an accompanying letter to the city, Leiweke said the stadium would be built in a way that does not "divert existing tax revenues" or put the city's finances at risk.
"We understand that the city, like most local governments, has been hit hard by the recent recession and we recognize that the citizens of this city would understandably look askance at any proposal that contemplated public funding of a private facility," Leiweke wrote.
The letter and transaction outline were provided to city officials the evening before the first meeting of Mayor Antonio Villaraigosa’s Blue Ribbon Commission charged with reviewing the proposed stadium and convention center project. Leiweke is scheduled to address that panel and Beutner, its co-chairman, plans to hold a news conference immediately after the session.
Although few new details and numbers were included in the proposal, AEG said the city bonds would be repaid using the land lease, fees on stadium tickets, fees on Staples Center tickets, new parking revenue and new advertising revenue from signs that would be installed on the convention center.
The bonds also would be repaid with increased revenue from sales taxes, business licenses taxes, utility taxes and property taxes generated by the stadium and the new, more marketable convention center operation, according to the plan.
Leiweke has told The Times that even with the various revenues streams, AEG may have to spend $6 million to $8 million annually to make up the difference on debt payments on the convention center.
The proposal also clarifies that the city-issued bonds for the convention center would be tax-exempt. And it states that AEG will seek the right to install new signs on the exterior of the rebuilt convention center and new accompanying parking structures, which would be owned by the city.
Negotiations on the proposal are expected to begin in the coming days. A final deal requires approval by the mayor and City Council.
-- David Zahniser and Rich Connell