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Los Angeles OKs outlines of downtown football stadium deal

The unanimous City Council vote, after earlier skepticism by some members, gives city leaders a rare chance to seize on a major economic development after years of cutbacks.

August 10, 2011|By David Zahniser and Sam Farmer, Los Angeles Times
  • Maria Elena Durazo of the Los Angeles County Federation of Labor shows her support for the stadium proposal at the City Council meeting.
Maria Elena Durazo of the Los Angeles County Federation of Labor shows her… (Francine Orr / Los Angeles…)

In the most significant step toward bringing NFL football back to Los Angeles since the city lost out on an expansion team more than a decade ago, the City Council on Tuesday approved the outlines of a $1.5-billion deal to develop a new downtown stadium and major wing of the Convention Center.

The unanimous vote gave city leaders a rare chance to seize on a major economic development after years of slashing payrolls, scaling back services and watching helplessly as the real estate market dried up. And it came at a time when business leaders and trade unions are desperately seeking ways to jump-start a local economy plagued by double-digit unemployment.

"It is a very important project at a very tenuous economic time," said Carol Schatz, executive director of the Central City Assn., a downtown business group and a leading backer of the project.

"We're bringing the NFL back.... We're going to get millions more in additional development, and that means millions more in tax revenue. On this one I have to ask: What's not to like?"

The vote is a victory for politically influential developer Anschutz Entertainment Group, which overcame concerns from some council members and activists that the city was rushing into a risky deal that could compound its budget woes. In the end, city negotiators shifted more financial risk to AEG and promised a full examination of the project's environmental impacts.

Approval of the deal framework puts AEG in a better position to deliver on its plan to open the 72,000-seat stadium in five years and show the NFL that the company has overcome political obstacles, said AEG Chief Executive Tim Leiweke. "It sends a very strong message to the NFL owners. We did it. We were unanimous," he said.

More detailed negotiations will continue for months, but AEG can now step up efforts to pursue a team from another city — a linchpin of the development agreement. "It's big for the leaders there to make the commitment they have," said Dallas Cowboys owner Jerry Jones, who serves on the NFL's stadium review committee.

City Administrative Officer Miguel Santana, a key city negotiator, said, "We're serious about this."

AEG is already working on state legislation to limit the type of legal challenges —- including one it fears from backers of a competing stadium in the City of Industry — that could be filed against the project on environmental grounds. Such lawsuit restrictions can provide builders and lenders greater certainty about large projects but are also highly controversial.

"What we are asking for is protection from frivolous lawsuits from those who are trying to get a competitive advantage or those who are just trying to destroy the process," Leiweke said.

The Raiders pulled up stakes in 1995. Four years later, L.A. almost secured an expansion team for the Los Angeles Memorial Coliseum, only to see the ownership group outbid by a Houston billionaire. Later efforts also fizzled when proposals involving downtown, Carson and the Coliseum failed to gain traction.

Stadium boosters contend that this proposal is different, delivering more than 20,000 new jobs — 6,320 of them permanent — while freeing up the money the city needs to replace the oldest section of its Convention Center. That facility lags behind those in San Francisco, San Diego and Anaheim in event bookings.

"I really believe that it's going to happen," said Councilman Bernard C. Parks of securing an NFL team.

Of the challenges still ahead, the most difficult for Phil Anschutz, the billionaire owner of AEG, could be securing an NFL franchise. The league has no intention of expanding beyond the current 32 teams, so Anschutz must reach a deal with an existing owner to relocate to L.A.

The relocation would have to be approved by a three-fourths vote of the 32 owners. The league is unlikely to give away access to L.A., the nation's second-largest media market, so any deal would almost certainly include a transfer fee, possibly in the hundreds of millions of dollars.

But sports agent Casey Wasserman, who brought the downtown stadium idea to AEG, said Tuesday's action shows the NFL that city officials can find common ground with the private sector. "This is a solution that really does work for everybody. It puts the pieces together to bring the NFL back," he said.

Developers of the competing City of Industry stadium, which also has preliminary local approvals, gave no indication that they were backing off, saying Tuesday that their project would generate "more money, jobs and long-term success for the region and the NFL" than the AEG proposal.

"We are more active than ever and are currently working with the league, owners and teams to bring a franchise back to Los Angeles," said John Semcken, vice president of Majestic Realty.

The L.A. stadium would be AEG's third major project on the southern edge of downtown. The council approved the L.A. Live entertainment complex in 2005 and Staples Center more than a decade ago.

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