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The NFL's $1-billion question

That's the latest estimate for building or renovating a stadium in Los Angeles, although a Coliseum commissioner says that figure is inflated.

October 25, 2006|Sam Farmer | Times Staff Writer

NEW ORLEANS — The NFL isn't moving quickly on the Los Angeles front, but the cost projections are.

The price tag for a new or renovated stadium in the L.A. area could top $1 billion -- more than double the estimates of a few years ago -- team owners were told at their annual fall meetings Tuesday by league staff. That does not include the cost of a team, which could be an additional $1 billion or more.

Because there is virtually no public money available for an L.A.-area stadium, the league is weighing the merits of paying for the construction and then passing that along to the new owner.

"I don't think at this meeting anybody was prepared to pay that for a Los Angeles stadium," said New Orleans Saints owner Tom Benson, chairman of the league's finance committee. "I don't know if somebody else is out there who's willing to come into the NFL and do that or not. At this moment, I think it's on the back burner."

Denver Broncos owner Pat Bowlen agreed, saying: "We've got a lot of other things going on. I think Los Angeles is on our radar screen, but we're not concentrating on it right now."

NFL Commissioner Roger Goodell said the league is "not giving up" on L.A. but said the challenge is becoming increasingly difficult with each month that passes. He said the latest construction estimates range from $820 million to $1 billion, and that's based on the stadium opening in 2010, which would mean work would have to begin immediately. There are no plans to do so.

"If you delay it, it would be a significant increase," he said. "When you're talking about billion-dollar projects, a 10% increase is pretty significant."

In its latest flirtation with the L.A. market, the league has worked on the stadium component without first identifying a team that could potentially move or an ownership group. Asked if that approach could change, Goodell indicated it might.

"We haven't been successful to date on the approach that we've taken," he said. "We do believe we've made some progress. But circumstances may change where we take a different approach to go forward."

By comparison, the most expensive development project underway in California this year is a $700-million, mixed-use complex in San Francisco, according to McGraw Hill Construction.

In L.A., on top of construction there would be a price for a team. According to Forbes, the average value of an NFL franchise this year is $898 million, more than triple than when the magazine began calculating team values eight years ago. The newest NFL franchise, the Houston Texans, cost $700 million in 1999. Or, if an existing owner were to move his team to the Southland, that owner probably would be required to pay a relocation fee in the hundreds of millions.

The league is considering proposals for a renovated Coliseum, and a new venue in the parking lot of Angel Stadium. At least one member of the Coliseum Commission believes the $1-billion estimate for a renovation to be substantially inflated.

"We believe the cost of remodeling the Coliseum with all the bells and whistles to be $700 million to $750 million," said David Israel, a state appointee to the commission.

Israel was among the commissioners who earlier this month said Coliseum officials might explore non-NFL alternatives in case the league did not choose that venue.

"We've been ready to make a deal for going on two years," he said Tuesday. "The only thing the delays have done is increase the costs. Waiting is not going to make it cheaper."

There are two pressing concerns for the commission: The rent the Coliseum pays to the state is due to increase in January from $80,000 to $2.5 million annually, and stadium officials need to renegotiate the USC lease, which expires after the 2007 football season.

Bill Chadwick, a commissioner, said the group should begin negotiations with USC and "aggressively" investigate a master-lease agreement that would allow the school to control the stadium; and look for proposals for developing the nine acres on which the Sports Arena sits.

"I think there's absolutely a sense of urgency," Chadwick said Tuesday. "It's not imagined. It's not a ploy. It's real."

L.A. City Councilman Bernard C. Parks, a fellow commissioner, made the trip to New Orleans to touch base with owners and league executives. He said that while he's not in favor of giving the NFL firm deadlines, "you can't ignore the realities coming upon us. We can't ignore SC and the state."

Anaheim spokesman John Nicoletti said Tuesday that the new cost estimate does not change the city's decision to review other options for the 53-acre site.

"We always knew that the NFL was thoughtfully considering the financial investment, and we knew that cost would be one of the deciding factors for the owners," Nicoletti said.

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