Can AEG lead L.A. to the promised land?
Mike Terry | 2/23/2011, 5 p.m.
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.