Can AEG lead L.A. to the promised land?
Proposed football stadium could be a boon—or a bust
There has been a buzz going through the city of Los Angeles, a perception that the National Football League is closer to returning here after the Rams and Raiders both bolted for sweeter land and stadium deals.
In the various discussions about the proposed stadium/event center that AEG, a subsidy development entity under the Anschutz Co., wants to construct in downtown Los Angeles, it is not enough to declare, “If you build it, they will come.”
The more immediate and pressing questions—who will build it, who will build around it, and who will work there?
And we’re not talking about quarterbacks and linebackers.
AEG has stressed repeatedly this project will be more than a 64,000-seat football stadium. In a Feb. 16 letter to the city’s Chief Legislative Analyst Gerry Miller, and Chief Administrative Officer Miguel Santana, AEG President and CEO Tim Leiweke describes the proposal as a “multi-purpose Event Center,” to be used to attract convention and concert business as well as the NFL.
The proposal seeks to tear down a portion of the Los Angeles Convention Center, specifically the West Hall, and build the Event Center there in its spot. In selling the proposal to the city and the public, AEG estimated the project would create as many as 25,000 new jobs.
But make no mistake: an NFL-quality stadium, and the return of professional football to Los Angeles, is the main engine propelling this train—that and AEG’s assertion that it will privately fund the construction of the facility at an estimated cost of more than $1 billion.
The project has already received a boost from Farmers Insurance, which agreed to pay $700 million over 30 years for the naming rights to the stadium.
Of course, not everything is “free.” AEG wants to build the stadium on city-owned land, and is also pushing city officials to float $350 million in bonds to help pay for the cost of demolishing and then reconstructing the old West Hall and parking, and also pay off the property’s remaining debt.
Leiweke has claimed the new revenue the center brings into the city, mostly from ticket taxes, should be enough to pay off the bonds, although Leiweke has also conceded those funds could be between $6-8 million a year short of the amount needed to repay the bond.
AEG said it would cover any shortfalls.
Oh, and one more thing: AEG wants the Los Angeles City Council to approve the deal as quickly as possible, although it has not been totally forthcoming on what financial information it will provide.
The company is hoping to have the stadium in place by 2015, and perhaps acquire the 2016 Super Bowl, which would be the 50th anniversary of the first Super Bowl played here between the Green Bay Packers and Kansas City Chiefs.
Eighth District Council member Bernard Parks is one who is bullish on the project. He points to the success of the downtown Staples Center and L.A. Live as prime examples of AEG’s prowess at developing profitable projects.
“The Staples Center has grown from just having professional teams like the Lakers, Kings and Clippers to (helping create) L.A. Live, which houses entertainment centers and businesses. When you look at that transformation of revenue, from parking taxes to property taxes, it has evolved into a significant increase in value,” Parks said.
Parks went on to say the Event Center “will carry several dozen dates per year, including concerts, and help attract the largest conventions. It is a mistake if people believe it’s just for eight or nine football games.”
Los Angeles County Supervisor Mark Ridley-Thomas, however, is one who remains skeptical about the return of professional football.
“I’m still not convinced the NFL is serious about this,” Ridley-Thomas said. “The NFL is famous for acting as if they really want football to return to L.A., and it sends L.A. through a bunch of hoops only to walk away at the end.”
When Ridley-Thomas served on the City Council, he was part of an effort to return a NFL team to the city in the 1990s. The NFL eventually placed an expansion franchise in Houston.
“You’re talking about a mega-project,” he said. “And they don’t come together easily. And frankly, now they are more difficult to finance. Back then we were talking about a half-billion dollars. Now it’s three to four times that much, for a team and a stadium. So it hasn’t gotten any easier.”
Nevertheless, Ridley-Thomas said, the communities surrounding the project have to make sure they have a voice in the jobs that emerge from the center itself.
“[The community] has to have advocates at the table in significant ways,” he said. “And those advocates have to be very clear about how the community favorably impacted. It will not easily happen.”
That’s true in part because unemployment figures remain depressingly high in Los Angeles County. By the end of December 2010, unemployment stood at 12.4 percent. In other bad news, the state had lost a half-million jobs from the year before.
“And we have seen over time that the unemployment figures you have at the state or national level, you can double those unemployment figures for minorities,” Parks said.
According to the 2010 U.S. Census, the city’s population is now past 4 million, with the Black population representing 11.24 percent of that total—an estimated 415,195 persons.
But that figure is only fifth in the city’s demographics. Whites are still first, followed by Hispanics, non-white Hispanics and Asians.
Meaning the competition for, and the pursuit of, those available jobs will be fierce.
The city government, according to Parks, has adopted a general guideline that 30 percent of the jobs from new, large projects will go to the surrounding communities.
“That was agreed upon for the Expo Line, Phase One and Two, and should also be true for the Crenshaw Line,” Parks said. “I believe AEG understands the necessity of the local community being part of it. It made an effort to hire local people to be part of the Staples Center staff, and the local businesses (around Staples Center) did the same.”
The unemployed in the surrounding communities who have been struggling through the worst economic downturn in the U.S. since the 1930s certainly hope that will be true.
At West Angeles Church of God in Christ a passionate Tim Leiweke took off his coat, threw it aside and tore into his subject.
Bishop Charles E. Blake, the pastor, sat on the front row in the church’s Crystal Room, and it’s possible he thought Leiweke had missed his calling.
The fire and the fervor were there, and so was a packed house of believers.
What had gotten the man of AEG so fired up? Was it football? Was it Farmers Field?
No, said Leiweke, president and chief executive of the entertainment conglomerate.
LOS ANGELES, Calif.—A proposed NFL football stadium in downtown Los Angeles would be dubbed Farmers Field under a naming-rights agreement announced today by AEG, the Staples Center operators who hope to bring professional football to downtown Los Angeles.
Meanwhile, Mayor Antonio Villaraigosa announced the creation of a "blue-ribbon commission'' to analyze the downtown stadium proposal.
LOS ANGELES, Calif.—The planned sale of Anschutz Entertainment Group, which owns Staples Center, L.A. Live and the Los Angeles Kings and is the driving force behind plans to build an NFL stadium in downtown Los Angeles, was halted today.
AEG Chairman Philip Anschutz, said he plans to take a more active role in the company, while Tim Leiweke, AEG’s president/CEO who has often been the local face of the company, will be leaving “by mutual agreement.”
LOS ANGELES, Calif.—Angelenos will get their first chance Wednesday to weigh-in on the $1 billion football stadium a developer is willing to build in exchange for the city making about $350 million in changes to the Convention Center.
An informal Planning Department hearing, open to the public, is set from 4 p.m. to 8 p.m. in Room 501 in the Convention Center's West Hall, which would be torn down to accommodate construction.
The potential Anschutz Entertainment Group (AEG) football stadium for downtown Los Angeles would spur major economic development and finance for the local economy, and in particular, for minority and small businesses. I strongly applaud the efforts of AEG, as well as Farmers Insurance Exchange, in their commitment to this historical project. The proposed football stadium will be dubbed Farmers Field under a naming-rights agreement announced by AEG.