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Los Angeles City Council

Draft MOU Agreement: http://downtownstadium.lacity.org/
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Los Angeles outlines financing plan for downtown NFL stadium

David Zahniser, Los Angeles Times
July 26, 2011

Los Angeles officials produced their financing plan Monday for a downtown Los Angeles NFL stadium and new $275-million wing of the city Convention Center, saying it would protect taxpayers by requiring the developer to absorb a greater share of the costs and risks.

Demolishing and rebuilding part of the Convention Center — a move that is central to the stadium deal — would require issuing $195 million in bonds, according to a proposed agreement released by negotiators for Mayor Antonio Villaraigosa and the City Council.

The bonds would be backed by the city's general fund and repaid with new revenue generated by the project, including lease income paid by developer Anschutz Entertainment Group, parking taxes, property taxes and a one-time construction tax on the project, officials said. The general fund pays for basic services, such as the police and fire departments.

A further $80 million in city-issued bonds would be the responsibility of AEG, which hopes to open its stadium by 2016, according to a summary report on the proposed agreement. That debt would be repaid via income from a special tax district covering two existing AEG developments next to the stadium site: Staples Center and the L.A. Live entertainment complex.

If AEG fails to pay the taxes required to cover those bond payments, the city could foreclose on L.A. Live, said Chief Legislative Analyst Gerry Miller, who co-wrote the city analysis of the proposed deal. "Those bonds are not on the city's books, so the developer is 100% on the hook for that," said City Administrative Officer Miguel Santana, L.A.'s top budget official.

The proposal sets the stage for what is expected to be nearly a year of more detailed negotiations between the city and AEG. And it represents a change in direction from the deal announced in January by AEG Chief Executive Tim Leiweke.

Leiweke initially wanted the city to borrow $350 million for the Convention Center construction, with his company privately financing the $1-billion football stadium to be known as Farmers Field. Last month, the Convention Center figure was whittled down to $290 million after AEG said that it, and not the city, would build parking facilities to serve the project.

Santana said the revised financing plan was pursued, in part, because city officials refused to accept AEG's plan to use new hotel and sales taxes to finance the convention center construction. "Those were just non-negotiable," he said.

AEG representatives said they agreed to the new tax district in exchange for two key concessions: an extension of a city ground lease at Staples Center to 2067 and more favorable terms for an existing billboard agreement covering the convention center.

In a statement, Leiweke said the reworked proposal would make sure the city's interests are "well protected."

But Councilman Bill Rosendahl said he still wanted city negotiators to explore opportunities to share in stadium profits.

"I'd like to know what the sign revenue is going to be and how we can participate in that revenue stream," he said. "All this should be on the table."

Miller said 27% of the Convention Center project would be paid for from new tax revenue generated by the projects, while 73% would come from various payments made by AEG. Of the $410 million in new revenue generated for the city over 30 years, $200 million would be used to repay the bonds, he said.

AEG would also provide a series of financial guarantees, including a $50-million letter of credit during the first four years of the deal. Between 2016 and 2019, that guarantee would drop to $28 million.

The release of the so-called memorandum of understanding comes as AEG is heating up its campaign for the project. The company held a news conference last week to announce the support of various labor leaders, including the powerful Police Protective League, which represents rank-and-file police officers.

The City Council is scheduled to take up the proposed agreement Friday. Councilwoman Jan Perry, whose district includes the stadium land, said she did not expect an immediate vote.

"It will be a very long meeting," she said.

Even with council approval, officials said specific terms of the proposed agreement could be changed during final negotiations with AEG.

The city's document came out hours after NFL owners ended the lockout of its players, reaching a tentative 10-year agreement. That development paves the way for AEG –- as well as backers of a competing stadium in the City of Industry –- to push ahead with efforts to secure a franchise.

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Stadium proponents hope NFL turns attention to L.A.

Sam Farmer, LA Times
July 25, 2011

Once the dust settles on the NFL's new labor agreement, will the league finally start pushing dirt in Los Angeles?

That's what backers of the competing L.A. stadium proposals are hoping, that team owners will turn their attention to the nation's second-largest market now that their first-largest nightmare — a bitter fight with the players — is over.

"For us, the timing is perfect because it's coming at the same time we're finishing what no one thought we could do, which is a deal with the city," said AEG's Tim Leiweke, who hopes to know by the end of the month whether the L.A. City Council will issue roughly $300 million in bonds and approve the just-completed memorandum of understanding for a stadium deal. "It puts a whole new amount of momentum and pressure on us to get going."

Likewise, the point man for Ed Roski's stadium proposal in Grand Crossing (formerly City of Industry) sounds as if they're treating the labor deal like a second starter's pistol, a call to re-emphasize the merits of their plan.

"Ed has never felt it was the right thing to do during a lockout to try to get the owners to focus on L.A.," said John Semcken, Roski's right-hand man. "They had something more important. Now, we want to demonstrate why we think our project is the best for the league, the best for a team, and the best for our fans."

At the moment — and this can change with the ever-shifting stadium landscape — downtown has the momentum. That is the preferred plan of many influential NFL owners, and signs point to the L.A. City Council approving the roughly $300 million in bonds to relocate the West Hall of the Convention Center, where the proposed Farmers Field would sit. Leiweke now says the vote might not happen by his original July 31 target date.

"This may slip into the first week or two of August," he said in a recent interview. The council goes on a two-week break starting Aug. 23. "As long as we're going to get it done before they recess, that's the key. From a timing standpoint, we'd like it closer to July 31 but we understand."

Leiweke's timeline calls for getting the plan entitled and a long-term agreement with a franchise in time to break ground on a new West Hall by June 1, 2012. According to that plan, a team would be playing in L.A., at the Coliseum or Rose Bowl, by next season and would be ready to move into Farmers Field for the 2016 season.

Assuming those bonds are approved — and there are strong indications they will be — AEG's next step will be twofold: continuing the process of getting the land entitled and getting an agreement from a team.

The entitlement process is likely to be sticky. Roski has a completed environmental impact report, plus an environmental exemption from the state that swatted away the last remaining legal challenge to his plan.

AEG isn't likely to get the same exemption — the climate for those has changed in Sacramento — and that means the Farmers Field project, which also will go through the EIR process, won't be as legally bulletproof. And that's Leiweke's main concern, that someone will file a lawsuit with the sole intent of derailing the project.

That's why he's been making frequent trips to Sacramento, talking to legislators and trying to secure a modified version of the exemption Roski got, one that calls for binding arbitration of disputes arising from the Farmers Field EIR, instead of fights that will slog through the courts.

"What we want is a process that doesn't get dragged on for years," he said.

NFL fans in L.A. are used to that, deep into their second decade without a hometown team.

Leiweke is convinced that era is coming to a close.

"When we started this process a year and a half ago, I think most people kind of looked at us, laughed, and said, 'Good luck.' No one thought we'd pull it off," he said.

"And now we're sitting here, and what's changed immensely is everyone is looking around and saying, 'They're going to pull it off. They're going to get a deal done with the city. This is going to happen.' "

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L.A. couldn't care less about NFL labor agreement

Bill Dwyre, LA Times
July 25, 2011

The NFL will play games this fall, it was reported Monday.

We are told this is a good thing because, had there not been a labor settlement, fantasy league players would continue to throw themselves off tall buildings at an alarming rate. Now, sadly, it will be the spouses of fantasy league players who will be taking stairs to the rooftop.

We hadn't followed this closely, because the NFL has been pretty much dead to us, and most of Los Angeles, since Oct. 5, 1999. That's when the best efforts of Los Angeles businessmen — and we might put little quote marks around the words "best efforts" — were drowned by a Texas oil gusher.

Harken back: In the spring of that year, the NFL had awarded, in principle, the 32nd franchise to Los Angeles. It had been four years since Georgia Frontiere took her Rams to St. Louis and Al Davis took his Raiders back to Oakland. In those four years, Los Angeles had wrinkled its collective brow and wondered whether losing Frontiere and Davis in one year was a bad thing, or if we had hit the jackpot.

Nevertheless, when an NFL team leaves a city there is always community hand-wringing. Two departures double the angst.

Soon, people with money and skill at putting big projects together were doing just that. Through the efforts of the likes of Michael Ovitz, Mayor Richard Riordan, Ron Burkle, Eli Broad and Ed Roski, the deal seemed done. NFL Commissioner Paul Tagliabue stood on the Coliseum steps, had his picture taken and said it would be so.

Then, in that expansion meeting in Atlanta in October 1999, a Texas oilman named Bob McNair offered the NFL a $700-million expansion fee — at least $200 million above Los Angeles' best offer.

Game over.

You can say all you want about those existing 31 NFL owners, but they all knew how to add, subtract and divide by 31. The 32nd NFL team became the Houston Texans and L.A. became a great NFL TV market.

Still is.

Which brings us to Monday, and the news that sent joy sweeping through the land. We will all have something to do again Sunday afternoons. Also Monday and Thursday nights. Give us the Jets and the Broncos on TV, plus two beers, and we are a happy country.

Interestingly, sprinkled about in this burst of NFL happiness is the opinion that this somehow means Los Angeles will get a team more quickly.

Part of that is that there are two viable stadium projects — Phil Anschutz downtown and Roski out in Grand Crossing (formerly the City of Industry) — sitting on drawing boards and allegedly ready to happen. More so, in the NFL agreement, some extra money has been set aside for loans to help build stadiums.

Golly, gee whiz. This could be it.

Or, taking the contrarian side, this could be yet another kick to L.A.'s groin.

Consider that this new agreement is designed, fairly quickly, to make everybody in the NFL happier and richer. Millionaire players become multimillionaire players. Billionaire owners are now being invited to lunch in Greece.

We have questions, all rhetorical.

•Does bloated contentment breed more change, more risk-taking?

•Do people with new cash in their already fat wallets quickly look for start-up ventures?

•Are owners who might have been down to their last half a billion (read Jacksonville and San Diego) as eager to fix things by moving to Los Angeles as they might have been before things got fixed; before they became newly enriched?

•If you have just worked long and hard and secured your future status quo with some nice maneuvers and creative vision by leaders and lawyers on both sides, does getting a team in Los Angeles become a bigger priority, or a smaller one?

The NFL, never even close to being broken, is now even more emboldened. The richest and most successful sports league in the world has its swagger back, not that it ever really lost much of it.

Even if the smart thing is to not sit on your successes, not get fat and happy, there is a future revenue stream that will easily solve that concern for the NFL. Some of its TV contracts come up for negotiations after this season. Think of the climate in which those talks will be held. NBC just paid $4 billion for the Olympics in 2014, '16, '18 and '20, and a single team, the Lakers, received something approaching $3 billion from Time Warner Cable for a 20-year TV deal.

And what is the best television property in the history of sports? The NFL, of course.

You do the math.

All this, plus the NFL loves to be wanted, to be romanced. Think of it as a 32-member country club, which chooses very carefully whom it allows into its cocktail parties. Schmoozing and begging work best.

Since the oilman uncapped his wells that day in 1999, Los Angeles has been less inclined to do either. So, no cocktail party. And, for much of L.A., no harm, no foul.

With this labor agreement, the NFL got fatter and happier. Also, less needy for L.A.

But that's OK. The fantasy players are thrilled.

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Accord by NFL players, owners ends 18-week lockout

AP/Thomas Himes, SGVT
July 25, 2011

WASHINGTON - After months of public nastiness and private negotiations, of court filings and rulings, of players and owners squabbling over more than $9 billion a year, NFL fans finally saw the handshake and heard the words they awaited: "Football's back."

NFL Commissioner Roger Goodell and NFL Players Association head DeMaurice Smith both used that phrase while standing shoulder-to-shoulder Monday, announcing their agreement on a 10-year deal to end the lockout that began in March.

Then came what may truly be the lasting image of the dispute's resolution: Indianapolis Colts offensive lineman Jeff Saturday wrapped one of his burly arms around New England Patriots owner Robert Kraft and enveloped him in a hug - a gesture that symbolized the acrimony's end more than any statement could.

"I'd like, on behalf of both sides, to apologize to the fans: For the last five, six months we've been talking about the business of football - and not what goes on, on the field, and building the teams in each market," Kraft said. "But the end result is we've been able to have an agreement that I think is going to allow this sport to flourish over the next decade."

Locally, two competing plans to build a stadium and move an NFL team back to Los Angeles are moving forward now that the Collective Bargaining Agreement has been settled.

Representatives of real estate magnate Ed Roski Jr. and his plan to build a stadium and move a team to Industry said the construction on the proposed 75,000-seat stadium in Industry, has been ready to start for about two years.

But the lack of a CBA has stalled efforts to a move a team to the area.

"We've known all along, since we finally got our approvals, that (the NFL's) focus was the CBA," Roski's right-hand man, John Semcken said. "Now we know that they'll be focusing on the return of football to Los Angeles."

Meanwhile, Anschutz Entertainment Group is working with city officials on their plan to build a stadium adjacent to the Staples Center in downtown Los Angeles.

City officials released an agreement Monday that would entail the city issuing $275 million in bonds to pay for a replacement wing to the Convention Center's West Hall, which would have to be demolished to make way for a stadium. AEG had previously asked the city for $350 million in bonds.

The agreement calls for 27 percent of the tax-exempt bonds to be repaid with tax revenue from the stadium. AEG would pay the city the rest through a ground-lease and other fees.

The agreement still has to pass two committee hearings, before it goes before the City Council on Friday. Even if it is passed, the agreement is a non-binding memorandum of understanding.

AEG hopes to have the stadium open in time for the 2016 season, provided they can reach an agreement with a team.

With the labor dispute finally resolved, owners can point to victories, such as gaining a higher percentage of all revenue, one of the central issues - they get 53 percent, players 47 percent; the old deal was closer to 50-50. There's also a new system that will rein in spending on contracts for first-round draft picks.

Players, meanwhile, persuaded teams to commit to spending nearly all of their salary cap space in cash and won changes to offseason and in-season practice rules that should make the game safer.

One important compromise came on expanding the regular season from 16 to 18 games, which owners favored. That can be revisited for the 2013 season, but players must approve any change.

"Both parties were trying to stand their ground - and rightfully so," said Vikings linebacker Ben Leber, one of the 10 named plaintiffs in the players' antitrust suit against the league that will now be dropped. "In the end, against all the negativity that was out there publicly, they took their time and hammered out what I think is going to turn out to be one of the best deals in the history of sports."

An interesting choice of phrase, given that Smith and some players grew fond of calling the owners' last offer before talks fell apart in March "probably the worst deal in sports history."

Here was Smith's take Monday: "We didn't get everything that either side wanted ... but we did arrive at a deal that we think is fair and balanced."

Now comes frenzied football activity, starting immediately. Club facilities will open to players Tuesday, when 2011 draft picks and rookie free agents can be signed, and teams can begin talking to veteran free agents. Training camps for some teams may begin as soon as Wednesday.

"Chaos," said Jets fullback Tony Richardson, a member of the NFLPA's executive committee. "That's the best word for it."

Only one exhibition game was lost: the Hall of Fame opener between the Bears and Rams, scheduled for Aug. 7 in Canton, Ohio.

Otherwise, the entire preseason and regular-season schedules remain intact.

"Our players can't be more excited about going back to doing the thing they love the most," NFLPA president Kevin Mawae said. "We always said during this process we would do a deal when it's right and when it's the right deal. Our players did that. We stuck it out to the end."

Owners overwhelmingly approved a proposal to end the dispute Thursday, but some unresolved issues needed to be reviewed to satisfy players. The sides worked through the weekend and wrapped up nearly every detail by about 3 a.m. Monday on a final pact that runs through the 2020 season and can't be terminated before then.

That's significant because the old collective bargaining agreement contained an opt-out clause, and owners exercised it in 2008. That led to the contract expiring when talks broke down March 11; hours later, owners locked out the players, creating the NFL's first work stoppage since 1987 - and longest in league history.

"I know it has been a very long process since the day we stood here that night in March," Smith said in a brief appearance about 20 minutes before being joined by Goodell and three owners. "But our guys stood together when nobody thought we would. And football is back because of it."

As he spoke, Smith was surrounded by some players, including Saints quarterback Drew Brees, one of 10 plaintiffs in the antitrust lawsuit that players filed against the league March 11. Two unanimous NFLPA leadership votes cleared the way for that case to be dropped and the lockout to go away: first, to recommend to the plaintiffs that they accept the settlement; second, to recommend that all 1,900 players re-establish the union.

All players now will take a vote to re-certify the union - it was dissolved March 11, turning the NFLPA into a trade association - and then one more vote to approve the final CBA. It all needs to be wrapped up by Aug. 4 to make everything official, something everyone involved believes will happen without a hitch.

Only once it is back to being a union can the NFLPA finish the contract, covering remaining items such as player discipline, drug testing, disability programs and pensions.

Several people involved in the negotiations praised Goodell and Smith for working with each other to try get the sides to arrive at a deal.

"If we don't have a good relationship, it hurts the game and the business of football," Smith said. "I'm not sure any two people have ever come together in a more compressed, public, interesting time than Roger and I."

Now get set for a wild week.

On Tuesday, clubs can begin talking to veteran free agents, who can sign as soon as Friday. On Wednesday, training camps will start to open.

The major economic framework for the deal was worked out more than a week ago.

That included dividing revenue; a per-club cap of about $120 million for salary and bonuses in 2011 - and at least that in 2012 and 2013 - plus about $22 million for benefits; a salary system to rein in spending on first-round draft picks; and unrestricted free agency for most players after four seasons.

"If I don't have to hear the word `lockout' for a long time, I'll be happy about that," Arizona Cardinals receiver Larry Fitzgerald said. "I know guys are ready to get back to work."

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City, AEG spell out financial terms for new stadium in draft agreement

Rick Orlov Daily News
July 25, 2011

Developer AEG would pay nearly 75 percent of the cost of upgrading the Los Angeles Convention Center and cover the entire cost of building an NFL stadium downtown, according to a draft agreement released Monday.

The nonbinding memorandum of understanding outlines the major issues negotiated by the city and AEG. The owner of Staples Center and the L.A. Live complex has proposed relocating the West Hall of the Convention Center to make way for a $1 billion stadium it hopes will host a professional football team.

According to the proposal, the city would issue $275 million in tax-exempt bonds to fund the Convention Center renovation. AEG would repay 73 percent of the bonds directly, with the balance covered by tax revenue generated by the stadium.

And Anschutz Entertainment Group would also pay fair-market value for a 55-year lease on the stadium land.

"We are just starting the process," Chief Legislative Analyst Gerry Miller said. "Overall, there is no public money to be used."

City Administrative Officer Miguel Santana repeated Miller's promise.

"Our concern was to make sure the money would be there and that it allows us to use new revenue to pay for our bonds," Santana said. "And those revenues are consistent, are verifiable and the taxpayers of the city will not be held liable."

The MOU says the city won't sign a final deal with AEG until the company has a 30-year deal in place with a football team. The company has said it hopes to have a stadium built in time for the 2016 season.

The key push for the agreement came from AEG, which said it wanted to see something from the city so it can show the National Football League that the city is serious in pursuing the football stadium.

With Monday's announcement of an expected resolution of labor differences between NFL team owners and players, it's expected that AEG can pursue negotiations with several teams and work with the NFL on the prospect of professional football returning to Los Angeles.

But, before that, a final agreement needs to be worked out with the city to set the terms for the project.

Councilwoman Jan Perry said her ad hoc committee has two hearings planned this week before a full City Council review scheduled for Friday.

Mayor Antonio Villaraigosa said he looked forward to the council review of the plan and will review it with his own blue-ribbon panel formed to look at the proposal.

"I have said from the very beginning, we must ensure taxpayers are protected and that the city benefits from any agreement," Villaraigosa said. "Done right, this could be an enormous boost to our local economy, creating jobs and millions in new revenue."

Under the agreement, AEG also would build two separate parking structures with a total of 4,000 spaces. AEG would operate the structures, but agree to make spaces available to the convention center for its events.

"For me, this is all about bringing more conventions to the city," Councilman Bill Rosendahl said. "If we are able to do this, with no threat to the general fund, then it will be a win, win, win for all of us. A win for AEG, a win for the city and a win for the public."

AEG President Tim Leiweke said he hopes to see the MOU approved to allow them to go ahead with their plans.

The MOU provides only a preliminary review of the economic impact on the project. Miller said a more detailed study will be conducted as the project moves forward.

On the convention front, Miller and Santana noted the West Hall will need to be modernized, with costs estimated at $50 million to $80 million, if the city were to take on the project on its own.

Allowing AEG to raze the current facility and replace it - which it has promised will be done before any stadium construction is done - will also allow the Convention Center to offer a more attractive site for larger conventions.

As for the stadium, AEG indicates it wants to use it for football, soccer and other events, such as the ESPN X Games and NCAA basketball tournaments as well as concerts and other entertainment events.

It would have approximately 72,000 seats, with 200 luxury seats and 15,000 club seats.

Convention, Sports and Leisure Consultants, hired by the city to review the proposal, estimated it could host at least 27 events a year, drawing more than 1.3 million people, which could bring in $105 million in revenues.

In paying for the stadium, AEG has developed what the report called an unusual financial model by promising to cover all costs.

Using a conservative cost figure of $1.2 billion for the project, AEG is hoping for a $150 million loan from the NFL and $150 million from the sale of seat licenses.

It's not clear yet whether AEG will have a financial stake in an NFL team.

Another unknown is whether the NFL will charge a relocation fee to any team that seeks to come to Los Angeles. The report estimated that could be as much as $500 million, which could result in the team operating at a loss for several years.

The two hearings by the ad hoc committee are scheduled this week to take public comment.

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City ready to get back into the NFL game

Vincent Bonsignore, Daily News Columnist
July 25, 2011

Forget about free agency, salary caps, rookie pay scales and franchise tags. When the NFL and its players finally agreed on a new collective bargaining agreement Monday, it was clear what local football fans should be wondering.

When is the NFL coming back to Los Angeles?

For months the NFL has told us to hold on while they worked through its labor issues, promising it would turn its attention to Los Angeles once it created financial clarity and peace with the players' union.

That day arrived Monday, the owners and players ending their stalemate and reaching a bargaining agreement through 2020.

What does that mean for us?

In football terms, the NFL can finally draw up a game plan designed to return to Los Angeles for the fist time in 16 years.

And if there was any doubt the league wants to return to the second-biggest market in the country, consider there is language in the new collective bargaining agreement that specifically addresses the financing and construction of a new stadium in Los Angeles.

"It is absolutely a high priority," said an NFL executive, said an NFL executive, who asked not to be named.

Couple that with two viable, vibrant, privately funded stadium projects in the works -- AEG's $1 billion downtown Events Center and Majestic's $800 million City of Industry proposal -- and the NFL is as close as it's ever been to again calling Los Angeles home.

Now don't go rushing to the grocery store to buy your tailgating items, but you might want to start brushing up on your grilling skills just in case.

"I think it's pretty clear Los Angeles will be right up there with the league's issues and visions," AEG's Tim Leiweke said.

The NFL has quite a bit to consider.

AEG, owned by Denver billionaire Philip Anschutz, and Majestic, owned by Southern California warehouse magnate Ed Roski, once were partners, teaming up in the late 1990s to build downtown Los Angeles' Staples Center.

Now they are rivals in a race to bring football back to Los Angeles.

Majestic's plan has been shovel-ready for months.

"(We're) ready to go," said John Semcken, vice president of Majestic Realty. "We have spent the off-season talking to a number of teams and owners who are either interested in new beginnings or passionate about the league's return to L.A. We have found tremendous support for our stadium proposal as the best option for long-term success and we are excited for the league and the commissioner to re-engage in these discussions now that the (collective bargaining agreement) is over."

And while the NFL is monitoring Majestic's plan, there is sentiment that it might prefer the AEG Farmers Field project, which is awaiting a City Council vote this week on a memo of understanding -- a non-binding gentleman's agreement that the city will work with AEG to move the project forward pending further detailed studies.

If the City Council agrees to the agreement later this week -- and that's looking more and more promising -- the NFL can seriously envision a return to Los Angeles at its preferred site next door to Staples Center.

"They are aware of our progress, we talk to them often, they know where we're at and they're amazed how we've plowed through this and gotten it done," Leiweke said. "There's not only a process but a solution that works in Los Angeles."

So how close are we to getting pro football back?

We're not at the goal line, but definitely moving into the red zone.

The first hurdle is figuring out who emerges between AEG and Majestic, and that might come as soon as next week when the City Council votes on the MOU.

The next step is identifying the team that will play here.

The league has no intention of ruining its 32-team balance by adding an expansion team, which means an existing team will have to relocate to Los Angeles.

And though there are at least seven teams that are serious candidates for relocation -- most of which are facing resistance in getting new stadiums in their current cities - no team in its right mind will announce any intentions to move to Los Angeles before the end of the 2011 season.

They have too many tickets to sell and fans to appease for the upcoming season to do that.

However, with momentum surging on a new stadium and so many teams facing serious issues in their home cities, it would be a shock if a team didn't agree to move to Los Angeles within the next two years.

Once that happens, the league must approve the move, although no one anticipates that being an issue.

Which teams are in play?

The Minnesota Vikings, whose lease at the Metrodome runs out at the end of the 2011 season, need Gov. Mark Dayton to call a special session later this year to get their stadium proposal addressed.

But with Minnesota facing severe budget issues, Dayton is making no promises.

The San Diego Chargers have made no progress on a new stadium.

The St. Louis Rams and Buffalo Bills are facing uphill battles building new homes.

Meanwhile, the Jacksonville Jaguars, San Francisco 49ers and Oakland Raiders all have compelling stadium issues.

Each is a candidate for relocation to Los Angeles, and it looks promising that Los Angeles will soon be ready to embrace one or two of them if they do.

"If they don't resolve their stadium issue in the near future, they have a resolution," Leiweke said.

Or, as the NFL executive put it:

"I can envision a race between some teams to get to Los Angeles," the executive said.

And you can bet AEG and Majestic will be aggressive in approaching prospective tenants.

"We'll talk to anyone, we'll go anywhere," Leiweke said. "We'll activate because we are clearly nearing the end of our process with the city."

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AEG Acknowledges: Downtown Stadium Deal Risky

Cary Brazeman, LA Neighbors United
07.25.2011

LA DOLLARS AND SENSE —The City Council will spend Friday in open session reviewing the downtown stadium deal. At this writing early Monday morning, there remain more questions than answers:

A draft of the preliminary agreement with the stadium developer has not yet been released publicly.
There’s been no independent analysis of the deal terms and financial impacts, including impacts on the city’s stock of convention center air rights that can be monetized to generate revenue.
The conflict of interest between AEG and the city remains. Each is slated to operate separate facilities as part of the compound; thus, they will be in competition with each other for show revenue.
The community impacts have not been analyzed.

The Los Angeles Times, in a piece of good reporting on Friday, began to look at proposed stadium developer AEG and the economics of owning and operating a professional football team and an NFL-sized venue.

Among other things, Tim Leiweke of AEG acknowledged to the Times that “there’s a lot that could go wrong with this one [the stadium deal]. It’s just riskier than anything we’ve ever done before.”

Leiweke was talking about the risk to his company. He’s right. There’s no telling if we build it they will come, and if the team will stay. That’s why a stadium deal for the city of Los Angeles — where the best possible outcome is breaking even — is no deal at all.

(Cary Brazeman, a CityWatch contributor, is a neighborhood council board member and founder of LA Neighbors United. Contact him at cary@LAneighbors.org or through www.LAneighbors.org .) -cw

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AEG moving ahead with NFL plans

Jeff Miller, OC Register
July 25, 2011

On the same day Roger Goodell announced football's back, one of groups trying to return the NFL to Southern California announced it also had taken a step forward.

The Anschutz Entertainment Group said it has finalized a memorandum of understanding (MOU) with Los Angeles, a necessary step to proceed with a planned $1.35 billion football stadium – Farmers Field – and L.A. Convention Center revitalization project.

The agreement represents the framework for a deal that could eventually bring the NFL back to the area.

Tim Leiweke, president and CEO of AEG, said the group is "confident that following their review of the MOU, the mayor, city council and other officials will endorse" the agreement.

An ad hoc committee on the stadium proposal will meet Wednesday at city hall and Thursday in Van Nuys to discuss the MOU, which calls for no public funds to be used in stadium construction.

The city council as a whole then will meet on the subject starting at 10 a.m. Friday.

Along with the AEG group, Majestic Reality is working on plans to build a stadium for an NFL team in the City of Industry.

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AEG, LA agree to stadium financing as Chargers still seek funds for San Diego

Gerald Nicdao, San Diego Sports Examiner
July 25, 2011

While the Chargers and the City of San Diego look for new financing options for a stadium in downtown San Diego, Los Angeles is moving forward with its own downtown stadium project.

After giving the City of Los Angeles a July 31 deadline, AEG announced that it and the Ad Hoc Committee on the Proposed Downtown Stadium and Events Center have agreed on a memorandum of understanding that will allow AEG to continue with its funding of a new downtown stadium in Los Angeles.

The committee is recommending that the City Council adopt the memo of understanding, which would clear the way for the project—known as Farmers Field—to continue.

The MOU will create a framework for which the city and AEG can use to continue with the process of building Farmers Field.

“There remains much work to be done…but approval of this MOU will represent a critical milestone in our efforts to break ground on this project within the next year,” AEG president and CEO Tim Leiweke said in a statement. “We look forward to continuing to work with the City to take this project to the next step at the same time that we also increase our focus on other key objectives, including progressing design of the project and securing the commitments necessary to bring the NFL back to Los Angeles.”

The details of the MOU are the same that have been discussed over the last several months.

The project will not proceed unless an NFL team has signed on to use Farmers Field.
No taxpayer dollars will be spent to build Farmers Field.

$275 million worth of city bonds will be used to tear down and rebuild part of the Los Angeles Convention Center, which 73 percent will be repaid by AEG and 27 percent of which will be paid for by new taxes generated by Farmers Field.

Any other convention center construction cost that exceeds the $275 million in bonds will be covered by AEG.
The biggest hurdle for any stadium project has just been passed by AEG and Los Angeles. In essence, both parties have agreed to financing the billion dollar project adjacent to the Staples Center and L.A. Live.

Now, only the City Council and the mayor have to sign off in order for the project to really keep moving forward.

“We are confident that following their review of the MOU, the Mayor, City Council and other officials will endorse this framework for a project that will boost the City’s convention, hospitality and tourism sector, stimulate economic activity in the region and generate sorely needed jobs,” Leiweke stated.

Contrast this to San Diego’s flailing attempts to fund a stadium next to Petco Park.

With the elimination of local redevelopment agencies, the Chargers and the City of San Diego are left desperately looking for new funding sources.

“The San Diego City Council's decision effectively means that there will be no available redevelopment funding downtown until some time into the next decade—2024 is a date that I have heard used by knowledgeable people in City Hall,” Chargers special counsel told the Union-Tribune last week. “What would this mean for the downtown stadium idea? Three things, for sure: (1) In the short term, any hope of using redevelopment funding is dashed, to use your word. (2) We need to find other funding sources, possibly by reconfiguring the project so that it functions as a powerful complement to the Convention Center and as the anchor of a new Sports and Entertainment District and (3) We also need to find a way to bridge the financing gap between now and 2024.”

Even with a stadium financing arm written into NFL’s new collective bargaining agreement, the funds loaned or granted to the Chargers may not be enough to fully fund a new facility in San Diego.

Under the old G3 stadium plan, teams received around $100 million to help fund new facilities.

The estimated cost of a new stadium in downtown San Diego is $800. So even if the NFL will be able to loan or grant more than $100 million, without another funding source, the plan is essentially dead.

“Like the old program, the new program won’t be funded with unlimited amounts of money, and it will be first-come, first-served,” Fabiani told the UT on Monday.

So, Los Angeles, again, has the upperhand in its stadium search. Even though they don’t have a team lined up to play in Farmers Field, AEG and the City of Los Angeles are prepared to write the checks to make the stadium a reality.

That’s exponentially more than what the Chargers and San Diego can say right now.

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LA has tentative stadium agreement

Arash Markazi, ESPN
July 25, 2011

LOS ANGELES -- On the same day the NFL ended its 4½-month lockout, Los Angeles took a big step toward bringing the NFL back to the city after a 16½-year absence.

Los Angeles officials on Monday unveiled a draft of a "Memorandum of Understanding," which basically outlines the framework of an agreement between AEG and the city to build a new $275 million wing of the Los Angeles Convention Center and the attached Farmers Field, a $1.2 billion football stadium and events center.

The city council plans to vote on the proposal after a series of hearings this week and is expected to have a decision before going on a two-week recess Aug. 20. The non-binding agreement would need only a simple majority to pass, which is expected, and keep the project on track.

L.A. City Councilwoman Jan Perry discusses the latest developments in the quest to bring the NFL back to LA -- the environmental review process, the latest news from the ad hoc committee and more.

An actual deal with the city is still about a year from becoming a reality, with the completion of an environmental impact report not expected until the spring. AEG is hoping to begin construction on the project in June 2012, with Farmers Field opening in September 2016.

The agreement states construction on the project cannot proceed until an NFL team has signed a contract to play at Farmers Field. That means an NFL team could be playing in Los Angeles as early as next season if AEG begins construction on the project this summer. A team would likely play in the Coliseum or Rose Bowl until Farmers Field is built.

Chief legislative analyst Gerry Miller and city administrative officer Miguel Santana negotiated the basic term sheet with AEG and recommended the council approve the memorandum, concluding "the project is financially viable and would improve the LACC facilities, expand the city's economic base and draw an NFL team to Los Angeles."

The biggest difference between the original deal AEG proposed in January and the current proposal is the cost of the Convention Center expansion and the bonds needed to build it. In January, AEG president and CEO Tim Leiweke had hoped the city would float $350 million in bonds to help finance the reconstruction of the Convention Center with AEG promising to repay them with revenue from the stadium. The cost has now been whittled down to $275 million, which will be paid for by tax-exempt bonds. Approximately 73 percent of the bonds would be covered by AEG and the other 27 percent would be covered by new tax revenues generated by Farmers Field.

"To be very clear, there is no public money in the stadium, none," Miller said. "We are not financing the stadium, we're not giving any land breaks on the stadium and they're going to pay a market-rate land lease. There's no public money in this stadium."

There is a competing stadium project spearheaded by real estate developer Ed Roski's Majestic Reality Co. to build a 75,000-seat stadium in the City of Industry, about 15 miles east of Los Angeles. The project has had permits in place to begin construction for nearly two years but the group has yet to secure an NFL team but believes they will be able to do so now that the league has ended its work stoppage.

"With the NFL season primed and ready to go, we are excited to re-engage with the NFL on how and when to move a team back to our region," John Semcken, vice president of Majestic Realty, said in a statement. "Majestic's stadium proposal is shovel-ready and we are experiencing a great deal of support from owners and team representatives around the league and leaders in our area who believe our deal is best suited for long-term success."

The team most commonly linked to moving to Los Angeles is the San Diego Chargers, which began as the Los Angeles Chargers at the Coliseum in 1960 and have tried unsuccessfully for nearly a decade to get a new stadium to replace 45-year-old Qualcomm Stadium. The Chargers can announce their intentions to leave San Diego between Feb. 1 and April 30 of each year through 2020 if they pay off the bonds, which currently would be about $26 million, used to expand Qualcomm in 1997.

The Chargers are one of five teams, along with the St. Louis Rams, Jacksonville Jaguars, Oakland Raiders and Minnesota Vikings, with whom Leiweke has had conversations.

"There remains much work to be done -- including completion of a thorough and complex (environment impact report), processing of project entitlements and negotiation of definitive agreements -- but approval of this (memorandum of understanding) will represent a critical milestone in our efforts to break ground on this project within the next year," Leiweke said in a statement. "We look forward to continuing to work with the city to take this project to the next step at the same time that we also increase our focus on other key objectives, including progressing design of the project and securing the commitments necessary to bring the NFL back to Los Angeles."

Councilwoman Jan Perry, the committee chair on the proposed stadium and events center, said she will go over the memorandum of understanding with the committee before the full City Council, which will meet on Friday and vote on the deal next month.

"This is a good sign," she said. "I consider today's announcement a very positive and strong step and it should communicate to all those who are watching and listening that we are serious about engaging in this process."

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City takes step toward sealing downtown LA NFL stadium deal with tentative agreement release

Jacob Adelman, Associated Press
July 25, 2011

LOS ANGELES — Los Angeles moved a step closer to coaxing a pro football team back to the region Monday with the release of a draft agreement between city negotiators and the company planning a downtown NFL stadium.

Officials said the non-binding memorandum of understanding, which still requires a City Council vote, contains taxpayer protections that go further than those initially sought by stadium planner Anschutz Entertainment Group.

The agreement calls on the city to issue $275 million in tax-exempt bonds for the relocation of a convention center hall to accommodate the roughly 72,000-seat venue. The bond amount was down from the $350 million bond issue that AEG had initially sought.

Los Angeles administrative officer Miguel Santana said the negotiating team’s main concern was that money to repay those bonds would come from a reliable source and that city savings would not be put at risk.

“What you have before you is a proposal that does exactly that,” he told reporters at a news conference.

Under the deal, nearly three-quarters of the annual cost to pay back the bonds would come primarily from property lease payments from AEG to the city and from the city’s share of property taxes, which negotiators said can be counted on not to fluctuate year to year.

The rest of the roughly $16.1 million in annual payments over 34 years would come from new tax revenue from stadium activity, although the agreement requires AEG to extend a series of financial guarantees over the course of the project as a safeguard against shortfalls and other risks.

AEG had originally sought to pay back bonds with sales taxes and other new stadium-related revenue that will now flow into public coffers, earning a projected $410 million for the city’s general fund over 30 years.

A further protection breaks $80 million of the $275 million in debt into a special type of bond that is financed with a tax on AEG’s nearby properties — such as Staples Center and the LA Live entertainment complex — and puts the facilities on the line if the company doesn’t pay.

“If they don’t pay the tax, the city can step in and foreclose on LA Live,” the city’s chief legislative analyst Gerry Miller said.

AEG’s $1.2-billion stadium plan is one of two competing proposals to bring professional football back to Los Angeles some 16 years after the Rams and Raiders left the nation’s second-largest market.

Warehouse magnate Ed Roski’s Majestic Realty Co. has permits in place to build a separate 75,000-seat stadium about 15 miles east of Los Angeles, in the city of Industry.

Neither proposed site has secured a team.

Councilwoman Jan Perry, in whose district the downtown project would be built, said she was eager to begin looking over the memorandum of understanding with a special stadium committee that she chairs and before the full City Council, which is set to vote on the deal in coming weeks.

“This is just one piece of a much larger puzzle,” she said.

If the framework is endorsed, the city will later vote on separate definitive stadium-related agreements, such as its development and financing deals and its clearance under state environmental regulations.

AEG president and CEO Tim Leiweke, who has been pushing city officials to take action on the memorandum of understanding so he can ramp up efforts to recruit a team, said he was confident the plan would be endorsed by council members and Los Angeles Mayor Antonio Villaraigosa.

“There remains much work to be done ... but approval of this MOU will represent a critical milestone in our efforts to break ground on this project within the next year,” he said.

Villaraigosa, meanwhile, released a statement encouraging city residents to participate in the hearings scheduled for the weeks leading up to a vote on the proposed framework.

“Done right, this could be an enormous boost to our local economy, creating jobs, and millions in new revenue,” he said.

But he added that there should be no rush to judgment on the deal. “I encourage the public, the council, and stakeholders to engage in a thorough and public debate to ensure we come to a sound agreement for Los Angeles,” he said.

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Downtown Stadium Deal Moves a Few Yards Forward in L.A. Just as NFL, Players Come to Terms

Dennis Romero, LA Weekly
July 25, 2011

​Even before the NFL and its players agreed on a new labor deal today the mayor of Los Angeles called a press conference to reveal a proposed pact between City Hall and the billionaire-controlled company that wants to build an NFL stadium on land owned by you, the taxpayer.

We have no problem with this, in theory: If it weren't for billionaires we might not have any new sports venues in America. And the old Convention Center West Hall, where Anschutz Entertainment Group of Staples Center fame wants to build, is somewhat of a tear-down.

But what amazes us about this dance ...

... is how coordinated city leaders are with a private entity that wants your help and land for this thing.

The stadium deal couldn't really launch without an end to the NFL lockout.

So even though this is supposed to be a deliberate, transparent process, what the people of L.A. have ended up with is an ad-hoc committee not, apparently, subject to open-meeting laws, moving in lockstep with the developer's time line (and, perhaps, its wishes).

Surprise, surprise: Even as there was a hint that the NFL and players would come to an understanding, Mayor Antonio Villaraigosa and Councilwoman Jan Perry, an ardent AEG supporter, were at the ready for an afternoon announcement trumpeting a proposed "memorandum of understanding" with AEG.

Green light, almost.

We're not anti-Farmers Field, per se. We're questioning the process.

Perry's office told us there are public meetings Wednesday and Thursday (where you can say stuff that clearly won't matter). Then the council will take a vote.

In a statement today AEG CEO Tim Leiweke says ...

... Farmers Field will be entirely privately funded and the construction of a new state-of-the-industry convention hall, slated to replace the existing West Hall, will be accomplished without cost to the taxpayers. However, thanks to the commendable efforts of the City's negotiating team, we have fashioned an understanding that reflects a number of key changes that serve to further ensure that the interests of the citizens of Los Angeles are well protected and well served. Among other things, not only do the proposed terms contained within the MOU provide for full repayment of the City bonds by new revenue sources, they expressly contemplate that the majority of new tax revenues generated by Farmers Field will accrue to the general fund, providing a much needed source of new revenue for our City in the coming years.

A competing stadium proposal in the San Gabriel Valley, from a company that helped build Staples Center, Majestic Realty, seems poised to fight for an NFL team anyway.

Majestic veep John Semcken:

With the NFL season primed and ready to go, we are excited to re-engage with the NFL on how and when to move a team back to our region. Majestic's stadium proposal is shovel ready and we are experiencing a great deal of support from owners and team representatives around the league and leaders in our area who believe our deal is best suited for long term success.
As far as building a stadium downtown, that's a done deal, if you ask us. Where a team goes? That's up to the NFL.

Maria Elena Durazo, head of the politically powerful and City Hall-connected Los Angeles County Federation of Labor, was pleased with proposed downtown stadium deal. This afternoon she stated:

Today the City of has made a significant step towards making Farmer's Field a reality. The Los Angeles County Federation of Labor and it's hundreds of thousands of members enthusiastically support this deal.
In our current economy and with the unemployment levels we are experiencing, we need more good jobs. Farmers Field will create more than 30,000 good jobs in construction, tourism and entertainment.

We are committed to making this project a reality and are excited about the prospect of putting Angelenos back to work.

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City Touts Stadium Deal as Safe for Taxpayers

ERIC RICHARDSON, Blogdowntown
July 25, 2011

DOWNTOWN LOS ANGELES — On the same day as NFL player representatives voted to approve a deal that will bring teams into camp, the team that has been negotiating to return the NFL to Los Angeles unveiled a document they hope will take that effort a big step forward without putting taxpayers at risk.

Councilmembers Jan Perry, Bill Rosendahl and Tom LaBonge joined City Administrative Officer Miguel Santana and Chief Legislative Analyst Gerry Miller in a City Hall conference room on Monday to present a draft deal that would allow developer AEG to move forward with Farmers Field, the $1.2-billion stadium the company hopes to build next to Staples Center and L.A. Live. That structure could be ready in the summer of 2016.

Standing in the way is the Convention Center's aging West Hall, and much of the public debate over the stadium plan has been focused on the city's potential liabilities from bonds issued to replace the facility with one that would span Pico Boulevard and attach to the newer South Hall.

Negotiations focused on reducing the city's general fund obligations to repay that debt and on making sure the city could count on revenues promised to repay it.

Under the terms released Monday, payments by AEG would make up approximately 73% of the bond payments, with "net new" taxes contributing the remaining 27%.

Funds will come from a ground lease payment that will start at $6.5 million per year, a $5 million special assessment, a $3.8 million possessory interest tax and approximately $715,000 in annual parking tax assessments on garages operated by AEG.

"Those revenues that we are using are measurable, they are not variable, they are consistant and they are reliable," explained Santana. "All of that was critical in making sure that the taxpayers of this city are not ultimately footing the bill."

While the total bond amount would be roughly $275 million, only $195 million of that would go against the city's books. The rest would take the form of a Mello-Roos district, borrowed funds backed by a special tax assessment against Staples Center and L.A. Live.

AEG CEO Tim Leiweke issued a statement Monday praising the city's negotiating team and expressed confidence that the full Council will quickly approve the document.

"Approval of this MOU will represent a critical milestone in our efforts to break ground on this project within the next year," Leiweke said. "We look forward to continuing to work with the City to take this project to the next step at the same time that we also increase our focus on other key objectives, including progressing design of the project and securing the commitments necessary to bring the NFL back to Los Angeles."

Assuming the city does sign off as expected, AEG's attention now turns to the project's environmental review and the effort to sign a team. "Both are processes that are underway," company spokesman Michael Roth said Monday.

AEG has also previously expressed its hope that the return of NFL football to Los Angeles will include the promise of multiple Super Bowl dates. While the league's labor strife put all such talks on hold, the signing of the new collective bargaining agreement opens the door to their return.

"There will be talks with the NFL coming up when the timing is appropriate," said Roth.

The negotiated deal—which can be found on the city's website—will be the subject of a trio of City Council meetings this week, culminating in a single-topic meeting of the full Council on Friday, July 29.

All parties emphasized that there is still much to be done before any football comes to Downtown L.A.

"What it means is that the city is moving forward in the discussion," said Perry. "It's a good sign, a positive step."

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City Of Los Angeles Releases Draft Agreement With AEG On NFL Stadium

City News Service
July 25, 2011

City officials released a draft agreement today that would allow Anschutz Entertainment Group to build a $1 billion NFL football stadium and renovate a convention center hall on city-owned property in downtown Los Angeles.

The proposed memorandum of understanding is the product of three months of closed-door negotiations between the city and AEG.

The proposed agreement details a 55-year lease for the land under the existing West Hall of the Los Angeles Convention Center.

AEG would pay about $6.5 million for the land where the developer would build the stadium and parking structure.

It also spells out a financing plan for AEG to construct a convention center hall, which officials claim would boost the city from 15th to fifth place in the nation in terms of convention hall space.

City Councilwoman Jan Perry hailed the release of the proposed deal as a good starting place for negotiations going forward.

"This is our opportunity to create a strong foundation on which to build a project that is good for the city," she said. "It is just one piece of a much larger puzzle."

AEG will not be given a final green light until a full environmental impact report has been completed, according to Perry, who chairs the ad hoc council committee charged with vetting the proposal.

AEG President Tim Leiweke said he was confident the council and Mayor Antonio Villaraigosa would endorse the framework for a final contract.

Approval of the draft MOU, he said, would be a "critical milestone in our efforts to
break ground on this project within the next year."

AEG officials said they hope to have the stadium completed in time for the start of the 2016 NFL season.

The agreement would require the city to make two tax-exempt bond issues totaling $275 million for the construction of a new convention hall.

It stipulates that nearly three-quarters of the bonds would be repaid by AEG directly.

The remaining 27 percent would be covered by tax revenues generated by the stadium.
"Those revenues we're using are measurable. They're not variable. They are consistent, and they are reliable," said City Administrative Officer Miguel Santana, who was part of the city's negotiating team in talks with AEG.

"All of that is critical in ensuring that the taxpayers of the city ultimately are not footing the bill for this to take place."

Under the draft agreement, which still needs to be approved by the council and the mayor, the project could not go forward without an NFL team agreeing to stay in Los Angeles for at least 30 years, or the term of the bonds, whichever is longer. AEG could also make a deal for a second team to play at the stadium.

"There is no public money in the stadium. None," stressed Chief Legislative Analyst Gerry Miller, who was the city's lead negotiator in talks with AEG.

In fact, Miller said, studies commissioned by the city found that the entire project would bring in about $210 million over 30 years that would go back into city coffers.

Miller said there are a number of additional guarantees in the agreement that protect taxpayers from ever having to pay the bond payments for the convention center.

He said they include a $50 million letter of credit from AEG in effect for the first four years of the contract and a completion guaranty for the football stadium and parking structure.

Miller said AEG has also agreed not to borrow money in order to pay for the parking structure, which means the city would own a completed parking structure with no debt if the deal falls through. AEG also agreed to finance the stadium with no more than 60 percent of borrowed money.

That would amount to as much as $500 million in equity in the stadium.

"The potential for job creation and for investment in our conventions and tourism is enormous," Perry said. "This is probably a once-in-a-lifetime opportunity."

Officials expect the environmental impact report and a final contract to be completed in about a year.

The council will hold a preliminary discussion on the proposed agreement Friday, although a vote is not expected to be taken.

The draft MOU is available at www.downtownstadium.lacity.org.

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