• NFL Stadium Downtown Could Generate $41 Million a Year in Tax Revenue: LA Neighbors United Wants Cash Guarantee For Citizens — LA Weekly
• Farmers Field a boon for L.A., studies find — San Diego Union Tribune
• Garcetti poses some 'principles' on AEG's stadium — LA Observed
• Hearings One Week Away, Stadium Reports Pick Up Speed — Blogdowntown
• As NFL's lockout nears end, future L.A. team still up in air — SGVT
AEG touts tax benefit of downtown L.A. stadium
Rick Orlov, Daily News
July 21, 2011
A proposed $1 billion athletic stadium and Convention Center expansion would generate $41 million annually in tax revenue and millions more for the tourism industry, according to two reports released Wednesday by the project's developer.
The studies commissioned by Anschutz Entertainment Group claim the project would lure an additional 14 major conventions to Los Angeles every year, generating $187 million more for hotels.
It also would generate $22 million in tax revenue for the city and about $19 million for state, county, Los Angeles Unified and the Metropolitan Transportation Authority.
"These independent studies further indicate the tremendous economic impact that the modernized Convention Center and Farmers Field project will have on revenues for the city, county and state," AEG spokesman Michael Roth said.
AEG's proposal calls for relocating the West Hall of the Convention Center and using the site for a 74,000-seat football stadium - with naming rights sold to Farmers Insurance.
The economic reports were prepared by Metropolitan Research and Economics and PKF Consulting.
David Carter, a professor of sports business and marketing at the University of Southern California, said such reports need to be reviewed with a critical eye.
"Studies like this are one part science and one part art," Carter said. "Detractors will have their own studies where they take down the projections.
"The truth is probably somewhere in between. The people doing these studies need to make assumptions, which are not necessarily wrong."
The reports were released as city officials began to lay down their demands for inclusion in a memorandum of understanding that is in the works.
Chief Legislative Analyst Gerry Miller, a leader on the city's negotiating team with AEG, said the studies will have no impact talks with the developer.
"We are pushing to have our MOU out by next Monday, and we will be conducting our own economic studies in connection with the development," Miller said.
The City Council's Ad Hoc Committee on the Downtown Stadium and Events Center has two meetings planned next week to examine the issue. The City Council is scheduled to devote its July 29 meeting to the proposal.
Fueling the sense of urgency is a July 31 deadline set by AEG to have the city's commitment to proceed.
However, officials caution the MOU is only the first step, and that many other issues will have to be resolved over the coming months.
Councilwoman Jan Perry, who chairs the ad hoc committee, said an environmental impact report will address some concerns, but she also wants details on transportation, infrastructure and job training.
Critics have also expressed concern about the repayment of nearly $300 million in bonds, which AEG wants the city to issue in order to fund the relocation of the West Hall. The developer has said it will repay the debt, vowing that taxpayers won't get stuck with the bill.
"A lot of this will be dealt with in the MOU, which is an outline of what we want from AEG and what they expect from the city," Perry said. "Many of the other issues, like traffic mitigations and the impacts on the infrastructure, will be dealt with in the environmental review."
Council President Eric Garcetti sent a letter to Miller and City Administrative Officer Miguel Santana outlining his priorities for the MOU and any subsequent agreement.
"Before any proposal is approved, Angelenos deserve to know: If they build it, what will come in terms of economic benefits," Garcetti said.
"We must ensure that taxpayers are protected 100 percent, both in terms of the city's budget and in terms of Angelenos' quality of life."
Also on Wednesday, the Associated Press reported that the stadium and event center project is needed by AEG as a boost to its efforts to sell condominiums at the Ritz-Carlton.
The hotel includes 224 condominiums - completed in 2010 at the depths of the economic crisis. The AP said that as of this week, grant deeds had been issued for only 32 of the units, two of which are owned by AEG and AEG President Tim Leiweke.
AEG spokesman Michael Roth said a 33rd condominium was sold this week and that part of the problem with the sales was the timing.
"It was a very hard time to be selling these," Roth said. "I think everyone understands the market conditions."
The AP said there were also disputes over $7.4 million in unpaid bills to contractors.
"We are working that out," Roth said. "In a project this size, more than $1 billion, the amounts we are talking about are expected and you would have in any project."
Construction of the hotel, included as a promise to the city as part of the LA Live package, presented difficulties from the start for AEG in trying to find a partner. There were several different deals announced and abandoned before AEG took it on itself.
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NFL Stadium Downtown Could Generate $41 Million a Year in Tax Revenue: LA Neighbors United Wants Cash Guarantee For Citizens
Dennis Romero, LA Weekly
July 21, 2011
Are you ready for some ... tax revenue.
Yeah, we're talkin' Monday night tax revenue, Sunday afternoon tax revenue, tax revenue all year 'round.
That according to Anschutz Entertainment Group, the people who run Staples Center and who want to install an NFL stadium atop city owned property next door.
AEG unleashed a forecast today that says ...
... its proposed stadium could generate $41 million a year in taxes, with $22 million of that going to the city of L.A.
Whew. Where do we sign up?
The city has yet to approve the plan but it looks like a done deal, what with a council committee working in the shadows (open meeting laws allowing you to join in don't apply to this ad-hoc group, apparently) to come up with a memorandum of understanding with AEG.
And now that the NFL player lockout could be coming to an end, we might see this deal take off like Reggie Bush.
AEG's projection comes from a study it commissioned, a report that also says as many as 14 new conventions would come to L.A. as part of its stadium project. (The plan would also revamp the Convention Center's West Hall, where the venue would be built).
Another rosy claim: The stadium would attract 2,400 new hotel rooms that would generate $175 million in spending in central L.A.
The group LA Neighbors United is wary.
It took out a full page ad in the Los Angeles Times this week stating that:
Yes, new tax revenue is expected from the stadium deal, but it will be used to service project debt, and it could be used to fund management, operations and infrastructure related to the convention and sports facility ... in other words, go right back into the stadium owner's pocket.
The organization is calling on the L.A. City Council to demand a "a minimum annual revenue guarantee" from the stadium to the citizens if it's built. Cary Brazeman, the group's leader, says:
The deal should include a minimum annual revenue guarantee to the city, beyond the debt service guarantee. The project is going to generate a ton of cash on a prime site that could be redeveloped in other ways.
The debt service guarantee is for cash AEG wants the city to borrow for the project, $300 million or so worth.
AEG honcho Tim Leiweke told the Weekly not one cent of taxpayer money would go toward building the stadium.
So are you ready for a new grid iron, L.A? Or at least some complicated spread sheets?
Farmers Field a boon for L.A., studies find
MATTHEW T. HALL, REPORTER - SAN DIEGO
July 21, 2011
The one-two punch in downtown Los Angeles of a new football stadium and a remodeled convention center would boost that city's convention business and add $22 million a year to the city's economy, according to a pair of studies paid for by the developers pushing the mega-project.
AEG held a news conference in Los Angeles Wednesday morning to release the reports a week before a series of meetings in which city leaders will begin to review the framework for a deal to build a stadium for at least one National Football League team and a new wing of the convention center. A vote is not expected next week.
If the mega-project gets done, citywide conventions would soar annually from 24 to 38, one report said.
Read the reports -- an executive summary of key findings and a fiscal analysis -- for yourself, and drill deeper into Wednesday's AEG news conference in this Los Angeles Times story.
With a trio of meetings planned in Los Angeles next week, the arguments on either side of Farmers Field are getting louder. Read more here on blogdowntown.com.
The post links to this AP story that delves into how a new stadium would be a boon for AEG condo units.
Also, AEG executive Tim Leiweke is trying to put to rest a lingering rumor that the Dodgers might relocate to downtown Los Angeles as part of a super-sports complex. Read what he said here.
Garcetti poses some 'principles' on AEG's stadium
Kevin Roderick, LA Observed
July 20 2011 11:03 AM
City Council President Eric Garcetti has sent out a list of conditions he would like to see met before AEG's proposal for the NFL stadium to be known as Farmers Field (and construction of a replacement Convention Center hall) is approved. Whether Garcetti can deliver on any of them is an open question, but here is his letter addressed to CAO Miguel Santana and the council's legislative analyst, Gerry Miller.
Messrs. Miller and Santana:
The proposed events center for Downtown Los Angeles could bring significant job creation, economic development and increased competitiveness to the City's Convention Center, and so the City Council has an obligation to carefully consider it. At the same time, we must ensure that taxpayers are protected 100 percent, both in terms of the City's budget and in terms of Angelenos' quality of life.
You and your staffs have done an admirable job representing the taxpayers through this process and have brought to it considerable expertise, including that gained through your previous work on the Staples Center, LA Live, and other initiatives with direct relevance to this proposal. Now, with a basic framework nearing completion, I want to be clear about what I believe are the key issues that any terms must address.
Before any proposal is approved, Angelenos deserve to know: if they build it, what will come in terms of economic benefits? The new Office of Economic Analysis I created was designed to provide rigorous and independent analysis of complex proposals like this. I therefore request that it be assigned the task of analyzing the proposed events center plan in terms of job creation, economic development and revenues to the City budget. In doing so, the Office should utilize a consultant with expertise and experience directly relevant to a stadium and events center proposal.
I also believe it is crucial to lay out clear principles that I believe would maximize benefits for the people of Los Angeles and protect taxpayers:
An environmental assessment must not be waived.
Quality design must be utilized throughout the project, especially on the Pico corridor. The project must be incorporated with its surrounding community, and of key importance is pedestrian connectivity between the project and nearby residential communities. Public transportation and parking improvements that would be owned by the City are also necessary.
The City shall receive a portion of any signage revenue.
No taxpayer dollars shall be used to build the stadium.
At least a majority of new revenues generated directly by the project must flow into the City's general fund to support increased police, fire, street repair and other public services, as opposed to being used to pay project-related expenses.
The City would enjoy the full benefit of all revenues generated by off-site economic activity (e.g. restaurant sales, new hotels, etc.).
Repayment of bonds used to finance the new Convention Center must be by way of near certain revenue sources, such as property taxes. This would likely require a bond amount far lower than the approximately $300 million that has been discussed.
In the unlikely event that near-certain revenue sources such as property taxes are not generated, financial mechanisms must be in place to ensure there is no general fund exposure from the bonds.
The length of a team lease must be at least as long as that of the bonds.
A guarantee mechanism must be in place to ensure a new Convention Center hall is delivered under any project scenario.
Guarantee mechanisms must be in place for the City to terminate the stadium ground lease and either operate the stadium or receive a cleared piece of land at no cost to the City.
I thank you for your commitment to the people of Los Angeles and appreciate your sharing of my goal of developing terms that significantly benefit our economy and protect the City's finances.
Sincerely,
ERIC GARCETTI
President, Los Angeles City Council
District 13
Hearings One Week Away, Stadium Reports Pick Up Speed
Eric Richardson, Blogdowntown
July 20, 2011, at 07:37AM
DOWNTOWN LOS ANGELES — As next week's hearings on AEG's proposal to build an NFL stadium and events center on the site of the Convention Center's West Hall move closer, news both for and against the $1.3-billion project is starting to pick up speed.
The company and the city are currently negotiating terms of a deal under which AEG would privately develop the $1 billion Farmers Field, while the city would issue just under $300 million in bonds to reconstruct the aging and disconnected West Hall over Pico Boulevard.
This morning, AEG will host a press conference touting the results of two economic studies the firm commissioned. According to the L.A. Times, one study shows that the development would create $41 million in new annual tax revenue. The other says that reconfiguration of the Convention Center and the development of the stadium would boost L.A.'s convention total from 24 in 2012 to 38 in 2016.
Those numbers bolster the company's case that its proposal to privately fund the $1 billion Farmers Field is a no-brainer for the city. Those conventions can mean big business—the recently completed Microsoft Worldwide Partner Conference was estimated to generate 53,500 hotel room nights and $48 million in economic activity.
Still, not everyone is ready to bank on those increased revenues. A group called LA Neighbors United took out a full-page ad yesterday (PDF) claiming that the increased revenues were likely to be wiped out by debt service and improvements near the stadium. It calls for a mandated 1% return on development costs that would be funneled into citywide improvements such as sidewalk repair.
Elsewhere, AP reporter Jacob Adelman says that AEG's plans could be an attempt to aid flagging sales in its adjacent Ritz-Carlton condo tower. According to Adelman, only 32 of the 224 luxury units have closed, with several of those sales going to AEG executives.
On Wednesday and Thursday evenings, July 27 and 28, the City Council's ad-hoc committee studying the project will hold hearings on a proposed agreement, which the City Administrator's Office is expected to deliver by Monday. After that, the talks will move to the full City Council, which will dedicate its entire meeting on Friday, July 29, to the project. Any vote would come in a followup meeting.
As NFL's lockout nears end, future L.A. team still up in air
Thomas Himes, SGVT
07/21/2011 10:23:03 PM PDT
While NFL owners and players might reach a collective bargaining agreement today, ending the lockout and saving the 2011-12 pro football season, L.A. fans shouldn't expect a team in the area anytime soon.
NFL owners overwhelmingly approved a tentative agreement Thursday, and the players are expected to do so as well. But even with an end to the league's contract dispute imminent, representatives of two competing plans to bring an NFL team back to the area were unwilling to guess when local fans might have a home team again.
Both camps already have missed self-imposed deadlines for reaching an agreement with a team.
Anschutz Entertainment Group recently delayed the advertised opening date of its proposed stadium by one year to September 2016, AEG spokesman Michael Roth said.
Throughout the lockout Roth said AEG has continued to update NFL owners on efforts to get city approval to build a stadium in downtown L.A.
Meanwhile, officials from Edward Roski Jr.'s Majestic Realty have been showing off to NFL owners the site of their proposed 75,000-seat stadium in Industry, according to Roski's right-hand man, John Semcken.
Located about 20 miles east of downtown, the 600 acres of open space at the intersection of the 57 and 60 freeways has given NFL team owners pause, Semcken said.
The city's name, Industry, can conjure pictures of smoke stacks and decrepit factories for those unfamiliar with the area.
But that is changing, Semcken said.
"Every single owner we've talked to thought the location was a question mark," Semcken said. "When they leave (the site) they realize the location is one of its greatest strengths" because of all the open space that can be developed.
Roski has been ready to start construction on his proposed stadium in Industry for about two years.
He has completed all the necessary steps in planning, even scoring an exemption to state environmental laws from legislators and, in doing so, stopping a lawsuit that could have stalled the project.
But the stadium's project manager, Taylor Talt, warned it still might be some time before Roski reaches an agreement with a team.
"We're moving full steam ahead on that process, but it's going to be a process," Talt said.
AEG's proposed stadium still remains in the early stages of planning - with time-consuming steps - including an Environmental Impact Report - still ahead before construction could start.
Nonetheless, AEG has given L.A. officials a July 31 deadline to sign a tentative agreement for the stadium, which would be constructed on city-owned land.
As part of recent negotiations with city officials, AEG lowered the amount of public bonds it wants to use to demolish and relocate the Convention Center's West Hall, which sits where AEG wants to construct its stadium.
The group initially requested $350 million in bonds from the city. The amount was lowered to $300million and now, Roth said, they're asking for even less, though he didn't specify the amount.
AEG also has agreed to move back the proposed opening date of its stadium one year.
That move was designed to prevent construction from interfering with events at the city's neighboring convention center - a possibility that has caused concern among city officials, according to Roth.
Regardless of the deadline and AEG's concessions, Los Angeles Councilman Paul Krekorian said he plans to scrutinize any proposal that comes before the council, calling deadlines a "non-starter."
"I don't feel bound by AEG's deadline in any way," Krekorian said. "I'm going to do the work I need to do to protect the people of Los Angeles."