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Analyst casts doubts on economic benefit from downtown L.A. stadium

August 26, 2011 |  3:01 pm

Tim Leiweke gathered supporters of AEG's plan to bring NFL back to L.A. for announcement. PHOTOGRAPHER Al Seib Los Angeles Times
The policy office that advises the California Legislature cast doubts Friday on the level of economic benefits that would be derived from a planned NFL stadium -– and warned that studies commissioned by developer Anschutz Entertainment Group “likely overstated” the financial boost it would deliver.

Speaking to a state Senate panel reviewing the stadium plan, policy analyst Mark Whitaker warned that football stadiums typically have a minimal effect on a region’s economic growth, largely because they become a magnet for household entertainment dollars that were already being spent elsewhere.

In many cases, a family that planned to buy tickets to an event at the Home Depot Center in Carson, the Los Angeles Memorial Coliseum, a restaurant or a movie theater would probably transfer those expenses to the proposed Farmers Field in downtown Los Angeles, said Whitaker, who works in the Legislative Analyst’s Office.

“There’s no net new economic activity there. It’s just transfer. This wouldn’t be the case with all events... There's no NFL team in L.A. right now, so that would be new economic activity,” he told the panel.

Whitaker gave his testimony during a three-hour hearing of the Senate’s Select Committee on Sports and Entertainment, which was reviewing the number of jobs that could be created by a stadium project and the potential for a bill to allow AEG to significantly curtail legal challenges to the project.

AEG officials have warned that they would reevaulate moving ahead with their stadium if a bill was not passed within two weeks. And Tim Leiweke, AEG president and chief executive, used his appearance before the panel to criticize “those who occasionally come out of classrooms and question whether or not sports facilities have an economic impact.”

“I hear people say that there’s no economic benefit, but then I look at the $100 million that we’re paying in taxes annually and believe we have, in fact, made a huge economic commitment and a change in the way our community operates,” said Leiweke, whose company owns Staples Center and the L.A. Live entertainment complex.

“Not only have we been an economic juggernaut for the state, the city and the county, but this organization has given back almost $80 million in charity and through our foundations, back to this community,” he added.
Committee chairman Sen. Kevin de Leon (D-Los Angeles, arranged the order of speakers so Leiweke would immediately follow Whitaker. The report from Whitaker’s office was produced last week.
Whitaker said there would be some benefit to the city from the stadium and the accompanying replacement of one hall of the Los Angeles Convention Center. And he said the city’s analysis of the two projects was “probably a little more realistic” than those commissioned by AEG. “But we found that both of them likely overstated the benefits,” he said.

De Leon said he was still reviewing the merits of a bill to help AEG. But he sympathized with AEG’s fears that its environmental impact report would become the target of a “frivolous lawsuit” from out-of-state litigants. “They could abuse this process,” he said.


L.A. stadium plan hinges on lawmakers' actions

City Council OKs outlines of $1.5 billion downtown stadium deal

AEG, Farmers Insurance in naming-rights deal for proposed NFL stadium

-- David Zahniser at Los Angeles City Hall

Photo: Tim Leiweke gathered supporters of AEG's plan to bring NFL back to L.A. for an announcement in February. Credit: Al Seib / Los Angeles Times