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Football stadium deal: Move the ball forward

LA Times Editorial
August 9, 2011

The Los Angeles City Council has spent months batting around a proposal for a $1.2-billion football stadium to be built downtown. Skeptics have questioned the project's impact on the surrounding neighborhoods, its ability to revive the city's struggling Convention Center and its power to generate significant new tax revenue. The process has not always been pretty — and the city's public officials have not always inspired confidence — but the most important questions now have been asked and answered as well as they can be in such an early stage of such a complex project. When the council meets Tuesday, it should approve the memorandum of understanding with the developer, Anschutz Entertainment Group, and allow the project to go forward.

The proposal is not without risk or downside. The city government would issue $195 million of lease revenue bonds to help pay for the project, and it would contribute some tax revenue generated by the facility to pay those off. Traffic and parking, already unpleasant aspects of life downtown, will probably be worse when events are held at the new stadium. Even after it is modernized, the Convention Center might fail to draw the big events that would make this project a success. Nor is it clear that the city has squeezed every dollar from the deal; for example, the city arguably deserves a share of signage and advertising revenue that the stadium might spin off.

Those are real concerns, but this proposal goes far toward addressing them. Regarding the city's exposure on the bonds, both city and AEG estimates predict that lease payments and tax revenues will cover the expense; in the event that they fall short, AEG has agreed to make up the difference. The city and AEG are exploring public transportation options that should limit the number of cars in the area, and football itself will not add much burden since games are played mostly on Sundays. Yes, the Convention Center might continue to disappoint even after a retrofit, but renovation is its only chance, and no one other than AEG is proposing to take that on at its own expense. Under this deal, AEG would invest $80 million in the form of a separate bond to rebuild that facility. AEG, not the city, would be on the hook for that debt.

One persistent question raised by critics of this proposal — and by this page — is an obvious one given Los Angeles' rocky history with the NFL: What happens if AEG moves ahead with the project and then fails to secure a team? The memorandum before the council answers that as conclusively as possible. The project, it says, "would not proceed until an NFL team has signed a contract" to play at the stadium. That's a welcome commitment and should reassure lawmakers.

As for whether the city has gotten every dollar it can, that's hard to know, but the deal today is far more protective of taxpayers than it was when negotiations began. The city's projected bond debt has fallen from $350 million to $195 million, which even the proposal's harshest critics concede is a tribute to the government negotiating team.

Moreover, although there are risks in any project of this size, there also is the prospect of considerable rewards. A rebuilt and newly attractive Convention Center could stimulate hotel construction in the neighborhood. The city projects that the new stadium and revamped Convention Center would produce 2,600 temporary jobs and 6,320 permanent ones. The stadium could be the home to one or even two football teams, not to mention the occasional Final Four and other major events.

And even after lease payments and parking and construction taxes are cycled back into paying for the facility, the city estimates that it would receive $210 million in net new tax revenue over the next 30 years. That money would pay for police officers and firefighters and the full range of city services — benefits that one does not need to be a football fan to appreciate.

Signing the memorandum of understanding does not bind the city entirely. AEG still would be responsible for completing an environmental impact report before it could commence construction. The city should continue to insist that AEG complete that work without shortcuts or special exemptions.

But approving this document would be an important step in this long process. By voting for it, the council would allow AEG to arrange financing for the project and keep it on pace to open in time for the 2016 football season. Just as important, it would demonstrate to the National Football League that Los Angeles, which has steadfastly and appropriately refused to cut any deal that devoted general fund money to a stadium, has at last found terms it can live with. The council should approve the memorandum, and AEG should get to work.

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Council set to vote on framework of deal — Daily News

Rick Orlov, Staff Writer
August 8, 2011

The City Council is scheduled today to approve what one official called "a very solid" memorandum of understanding that outlines the terms for a $1.3 billion NFL stadium proposed for downtown Los Angeles.

Councilwoman Jan Perry, who chairs the Ad Hoc Committee on the Downtown Stadium and Event Center, said the two-pronged project would provide a way for the city to upgrade the Convention Center and and for supporters to lure an NFL team back to L.A.

In a letter send Monday to City Council President Eric Garcetti, Perry explained how parameters devised by the Ad Hoc Committee helped city officials negotiate with executives for Anschutz Entertainment Group.

"I think we have a very solid MOU to consider," Perry wrote. "The negotiating principles set forth by the Ad Hoc Committee provided a clear roadmap for the city's negotiating team."

The committee sought to protect present and future revenues, to provide economic security and to ensure that no public money is used to finance the deal.

"The proposed MOU allows the city the opportunity to modernize the Convention Center and bolster the convention and tourism industry at a time when funding for this project is not available through the city's general fund," Perry said.

Garcetti said he was pleased with the work of the committee.

"I created the Ad Hoc Stadium Committee to ensure that this proposal received the scrutiny needed for the city to make an informed decision that puts the best interest of Los Angeles taxpayers and our economy first," Garcetti said.

The AEG plans call for razing the West Hall of the Convention Center and building a new facility on Pico Boulevard.

The former site of the West Hall would become home to the 75,000-seat football stadium.

AEG has promised to pay all costs associated with the stadium and to cover the cost of issuing $280 million in municipal bonds to finance the convention hall.

It also said it will pay to erect two parking structures in the area.

The MOU is non-binding but provides a framework for the future discussions, including the requirement that a professional football team sign a long-term lease.

AEG had sought the MOU as a way to demonstrate to the National Football League and team owners that there is political support for the project.

The San Diego Chargers, Minnesota Vikings, Buffalo Bills and Jacksonville Jaguars are among the teams said to be interested in relocating to Los Angeles.

AEG is not alone in pursuing teams.

Ed Roski, owner of Majestic Realty and an occasional partner with AEG, has his own proposal for a stadium in the City of Industry.

Officials have said not to expect an announcement by any team until after the Super Bowl next year.

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State Senate committee to consider protecting L.A. stadium proposal from state environmental laws — Daily News

Thomas Himes, Daily News
August 8, 2011

A committee of state lawmakers will meet this month in an effort to prevent environmental protection laws from hindering an NFL stadium that has been proposed for downtown Los Angeles.

The committee of five legislators will convene at the request of Sen. Kevin De Leon, D-Los Angeles, who chairs the State Senate Select Committee on Sports and Entertainment.

De Leon hopes to ensure the project isn't stalled by environmental laws, while at the same time protecting the environment and quality of life for local residents, De Leon's spokesman, Greg Hayes said.

De Leon was not available for comment. He is out of the country, Hayes said.

Anschutz Entertainment Group (AEG) officials have previously said they would seek immunity from civil litigation that could use environmental laws to challenge the project.

De Leon is open to the idea of a legislative exemption for the stadium, but doesn't have anything specific in mind, Hayes said.

AEG's competition, billionaire Ed Roski Jr., received an exemption from the California Environmental Quality Act in 2009 that effectively killed a lawsuit that challenged his proposed NFL stadium in Industry.

But even lawmakers who helped pass that exemption said they would be hard-pressed to support an exemption for AEG in the foreseeable future.

The State Assembly's majority leader, Assemblyman Charles Calderon, D-Montebello, said the two projects are "apples and oranges."
"I'm generally opposed to any exemptions to CEQA under these circumstances," Calderon said. "The facts (in Industry) were just entirely different than those connected with AEG's proposal."

Calderon said the exemption Roski received targeted a single lawsuit, which amounted to an attempt by politicians and residents in the neighboring city of Walnut to exploit environmental laws for monetary gain.

"They were objecting for all the wrong reasons," Calderon said. "They wanted to leverage money for city projects, I think."

Roski's project had already completed a full Environmental Impact Report (EIR) - a requirement of the state's environmental laws that takes years to complete.

EIRs require the developer and city to identify the possible environmental impacts of a project and propose measures to lessen them.

When Roski's project received an exemption, he had already settled a different lawsuit by agreeing to make $9 million in roadway improvements to lessen the impact on traffic congestion in the area.

"We supported that bill because we felt CEQA can be a protection, but it can also be a tool for those trying to extract or coerce giveaways from the developer," said Rocky Rushing, the chief of staff for Calderon.

The environmental impacts of AEG's proposal remain undefined, as the EIR is in its early stages.

"I have to ask why we are talking about an exemption when AEG has not begun the environmental impact study," said Sen. Ed Hernandez, D-West Covina.

"When I supported the waiver of liability for Majestic's stadium proposal in Industry, they had already been through a full environmental impact study, a supplemental study, and they committed to millions of dollars in" measures to lessen impacts, Hernandez said.

AEG spokesman Michael Roth said the first draft of its EIR should be completed in early 2012.

"Our EIR will be full and complete, and our track record of environmental responsibility is second to none," Roth said.

Roth also said he didn't know anything about De Leon's plans and the group has not yet decided whether to seek any environmental exemptions.

"I couldn't even tell you if it's happening or not," Roth said.

The meeting is scheduled to occur within the next few weeks, but a precise date has not been set.

De Leon's staff is working to coordinate the event with guest panelists, which will include AEG representatives, labor leaders and environmental experts, Hayes said.

Unlike Roski's proposed location, nearly 600 acres of open space at the intersection of the 57 and 60 freeways, adding a stadium to AEG's site will have "substantial" environmental issues, Calderon said.

Traffic and parking in the congested downtown space are two of the issues Calderon mentioned.

It is unclear, what if any measures will be taken to lessen those two issues.

"The Industry hills side is way out in open space area," Calderon said. "In Los Angeles, that is a major, major project that would substantially and significantly impact the environment there and surrounding environment."

While Los Angeles officials have previously acknowledged the need for roadway improvements, AEG officials have rebuffed the assertion and neither side has agreed to foot the bill for highway improvements.

"The bottom line is that of everything I have seen so far concerning these two proposals, I think Industry is the best location for a stadium," Hernandez said.

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Chargers Fans Fear Losing Their Team — NY Times

GERARD WRIGHT, NY Times
August 8, 2011

SAN DIEGO — Here is a view of the between-life, or afterlife, known as limbo, for a professional sports team.

The rows of once-temporary steel bleachers below and behind Kyle Spangler show growing patches of rust. Alongside his field-level seat, in the corner end zone at Qualcomm Stadium, the bleacher surface is pitted with fresh tobacco stains, as though to compare their corrosive qualities with those of time and nature.

The hasty return of N.F.L. training camps has left every fan to contemplate a merry-go-round of comings and goings and stayings. In that respect, the Chargers are no different.

Where they stand apart is their status as one of San Diego’s two major sports teams, and what their fans consider a real possibility: that in the absence of an agreement by a cash-strapped city and state to replace Qualcomm Stadium, the Chargers will leave town.

The most likely destination is a two-and-a-half-hour drive north on the Golden State Freeway, to downtown Los Angeles, where the City Council is expected to vote Tuesday on starting the process of approving construction of a privately financed $1.2 billion stadium with a retractable roof.

Financed by Anschutz Entertainment Group, the sports and entertainment conglomerate owned by Philip Anschutz, the proposed stadium is the latest attempt to lure a N.F.L. franchise back to Los Angeles since the Rams and the Raiders left in 1995.

Also under consideration is a rival proposal, 20 miles southeast of downtown in the City of Industry, also privately financed, by the construction mogul Ed Roski, who worked with Anschutz in developing the downtown Staples Center.

Farther south, negotiations between San Diego and the Spanos family, which owns the Chargers, over a new stadium date to 2002, when the family appointed the lawyer Mark Fabiani as its go-between with the city.

Fabiani, who is also serving as spokesman for Lance Armstrong during a federal grand jury’s doping investigation, said a new downtown stadium for the Chargers would cost $750 million to $800 million. Citing previous stadium projects, Fabiani said the public share of those costs would be about 65 percent.

The calculation for teams, politicians and voters alike will be the price that can be placed on the fanaticism of fans like Spangler, 26, who watched a night scrimmage last week in an Antonio Gates jersey.

Spangler’s love affair with the Chargers — he drove 110 miles from the Los Angeles exurb of Ontario to Qualcomm, as he does three or four times a season for games — began with the end of another relationship when he was 9.

That was in 1995, when the Los Angeles Rams fled Southern California for a warmer welcome and newer stadium in St Louis. With that experience, he can see the future for Chargers fans in his own past.

“A lot of San Diego fans might have the same resentment that I had when the Rams left,” Spangler said.

As with many of the fans at the practice, he says the Chargers’ departure is inevitable.

“The way everything is shaping, it looks like L.A.,” Spangler said. “You hear a lot more about the stadium being built in L.A. than you do here.”

The Chargers’ departure would not be in response to their performance on the field. With five playoff appearances in the seven years, the talent-laden Chargers have been one of the N.F.L.’s better teams in the regular season.

DeeDee Hess sat nearby with her daughter, son-in-law and granddaughter. Newly returned home after 15 years in “the People’s Republic of Santa Monica,” she was renewing acquaintances with a place and team that had been part of her family’s life from its inception.

As a security guard for the team, her father would walk the field before games during the 1970s and early 1980s. Hess trod the same turf as a volunteer usher for Radio City Music Hall performers when the stadium hosted the Super Bowl in January 2003.

Hess says “absolutely” that the Chargers are headed for Los Angeles, a state of affairs that will be painful for her and the team.

“This is nostalgic for me,” she said. “It makes me mad. Honestly, they’re not going to get the support there. The Lakers are about it in L.A.”

The fans, perhaps 2,000 in all, were scattered through the lower reaches of Qualcomm’s 71,500 seats. From the seats beyond the western end zone, quarterback Philip Rivers’s voice could be heard as he called plays from the far 20-yard line.

The stadium was opened in August 1967, a monolith of concrete, its playing field and parking lots subject to occasional inundation from a tributary of the nearby San Diego River.

Bert and Lucy Hernandez were among those who voted on the original ballot measure for the stadium’s construction, in the mid-1960s. They have been season-ticket holders for 20 years.

He was in the military, and then a salesman, now retired, with no illusions about the state of the place: he waits unto eternity to use the restrooms, the structure itself showing its age.

“They’re not doing anything to renovate it,” Bert Hernandez said of the Spanos family, “because they don’t want to invest in it.

“Right now, I think the Chargers are in limbo because I don’t know if they’re going to leave or stay. I guess they don’t see any hope of San Diego coming through and saving them.”

Players like long snapper David Binn and center Nick Hardwick have more than the usual amount of emotional investment in the team’s future whereabouts.

Both are year-round residents of the city, Hardwick for eight years, Binn since 1994.

“San Diego isn’t known as a huge football town, but the fans are very passionate,” Binn said.

Hardwick, who is also the team’s players union representative, disagreed. “A football town?” he responded. “Oh yeah. When we’re rolling, in our stadium on a Sunday, it’s one of the louder places you’ll play.”

Neither player professes to know the team’s likely destination, but both offer civic pride as a reason for it to stay.

“I guess I would go where I’m told to go,” Hardwick said with a notable lack of enthusiasm about the prospect of playing in Los Angeles. “But I like where I’m at, and I would like to stay here.

“I know a lot of the guys in the locker room would rather stay in San Diego. It’s a great city to live in and play for. We’re proud to be here.”

Timing appears to be critical in persuading local voters to support tax increases. A ballot initiative to allow partial public financing of a $453 million downtown baseball stadium passed easily in November 1998, less than two weeks after the Padres lost to the Yankees in the World Series.

Since then, though, the economy and government’s finances have deteriorated in California. In 2008, voters rejected a proposal to pay for improvements in firefighting services and equipment through a parcel tax increase. This came 12 months after wildfires killed 15 people and destroyed 3,400 houses near San Diego in October 2007.

“The Chargers are very popular in San Diego,” Darren Pudgil, a spokesman for Mayor Jerry Sanders, said. “For the people of San Diego, it’s going to be a decision to decide if they want to keep the team in San Diego.”

Whatever the resolution, it will not be in the near term. Pudgil said the city hoped to put a stadium financing proposition to a vote on the November 2012 ballot, a football lifetime away.

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