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A Better Deal Needed in the Public Arena

If a new sports facility, funded in part by taxes, is successful, give the voters a tax cut.

September 29, 1996|JOEL FOX | Joel Fox is president of the Howard Jarvis Taxpayers Assn

Officials in the cities of Los Angeles and Inglewood are playing a high stakes game with someone else's money--the taxpayers, naturally--to close a deal for a new sports arena for their respective cities.

Inglewood officials have already sprinkled sugar, in the form of already approved city tax revenue, for a new arena near Hollywood Park to replace the Forum, the longtime home of the Kings and Lakers. Los Angeles city officials are sweetening their offer with a guarantee to pay off a $60-million bond and throw in property valued at $24 million to acquire a new arena next to the downtown convention center.

All this deal sweetening is giving taxpayers a toothache.

Los Angeles City Councilmen Joel Wachs and Nate Holden think the council should spend $30,000 for a poll to determine how residents feel about what they consider a tax giveaway plan. But, why not go for the ultimate in polls: an election?

Polls don't always test what voters will actually do, especially when it comes to the voters spending their own money. It is easy to support a project in theory. Saying "yes" to a pollster commits the respondent to nothing. In the voting booth, marking an X next to a tax increase measure is like signing a contract.

Timing is the problem for an election. The owners of the Kings, who are spearheading this development plan, say they want to begin construction in 1997 so play can begin in the new arena in the fall of 1999. To do that, they say the deal must be closed by mid-October. It is too late to get any measure on November's ballot, and the next city elections are not scheduled until April.

For the most part, those public officials trying to secure the deal for the arena have good intentions. Los Angeles and Inglewood claim that tax revenues will be boosted from new business activity. This argument particularly applies to Los Angeles. The city hopes to revitalize downtown, and re-energize the convention center, which is still a multimillion-dollar tax loser in L.A.'s budget and has attempted more comebacks than Magic Johnson. Inglewood doesn't want to lose the business that the Forum now brings in.

Still, there's something galling about these multimillion-dollar sports franchises needing taxpayers' assistance to build their project.

To be fair, it's not only the sports franchises that seek taxpayer help to develop moneymaking projects. Just a few months ago, the city of Los Angeles announced tax breaks to capture the DreamWorks studio for the city's marina area.

If developers get guarantees from the cities to bring home projects, why not give some guarantees to the taxpayers if their investment works out. Instead of sweetening the deal for just the developers, let's sweeten the deal for the taxpayers, too.

If the new arena comes to downtown Los Angeles with the help of taxpayer funds, and more revenue results both for the city coffers and the convention center, why not a tax cut for the taxpayers who took the risk? Cut the sales tax or city utility tax. Write a contract with the people. If the arena spurs the economy downtown to reach certain, attainable goals--in other words, achieves what city officials say will be achieved by approving the arena--then taxpayers will be rewarded with a specified tax cut.

While we're waiting for the payoff of a tax cut, there's something else we can do for the taxpayers. Name the arena after them. In other cities, when corporations come in with big bucks to help maintain an arena or stadium, they get to affix their name to the place. In San Francisco, the charming name Candlestick Park was changed to the harsh 3Com Park after corporate dollars came in. The United Center in Chicago, where Michael Jordan's Bulls play, is the beneficiary of United Airlines dollars. The Forum in Inglewood is now known as the Great Western Forum.

More than $84 million from Los Angeles taxpayers is a big chunk of change. Los Angeles Taxpayers Arena may not have a neat ring to it, but the name would venerate folks who deserve the honor if the project becomes reality.

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