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CALIFORNIA : THE WEEK

L.a. Just Wants To Play Ball

Despite potential drawbacks, the city's power elite is cheering for an NFL stadium.

February 06, 2011|Cathleen Decker

The big party in downtown Los Angeles Tuesday was meant to unveil the proposed Farmers Field football stadium, which its developer hopes will link Staples Center and a refurbished convention facility into an entertainment destination spectacular enough to draw tourists from everywhere.

An airship idled overhead, expensive champagne flowed, politicians and titans posed with footballs -- their presence aiding developer AEG's efforts to frame the proposal as a foregone conclusion, a train easing out of the station. All aboard!

As yet, there is no formal plan to finance the field, and no NFL team to put on it, making it difficult to assess how realistic the partygoers' aspirations will prove to be. Still, the gathering underscored two truths about Los Angeles. One is where its political power is amassed. The other is the enduring allure of the Next Big Thing.

Present, in one form or another, were representatives of all of the city's power centers. Philanthropist Eli Broad, the city's premier giver, appeared via video. Maria Elena Durazo, leader of the local labor movement -- the city's most potent political force -- spoke. Sports legend and politically attuned businessman Magic Johnson rallied the crowd. And the organizer, AEG President and Chief Executive Tim Leiweke, confirmed his own political heft by drawing all of the above, plus Mayor Antonio Villaraigosa and council members Janice Hahn and Jan Perry.

The city officials insisted that their approval would hinge on the final proposal by AEG, which is weeks from completion. But they certainly appeared to be blessing an enterprise by a firm that has rained political donations on them as well as myriad other city officials. (Most notable recently: $100,000 for Villaraigosa's effort to elect political allies to the school board).

"This event center ... is a win-win for the residents of Los Angeles," Villaraigosa was quoted as saying in an AEG press release. "And it will not cost taxpayers a dime."

And that, in a nutshell, is the cachet of the Next Big Thing. Sometimes, for some cities, it is a premier event -- the national political convention in Los Angeles in 2000, for example. Sometimes, it is the birth of a new stadium and the arrival of a sports team, like the one that the Farmers Field folks hope to lure to town.

There are various iterations of the municipal argument for soliciting the Thing.

The first, used in times more flush than these, is that whatever the city has to pony up -- either direct payments or write-offs or cheap leases -- will be offset by the great strides the economy will make because of it. The second, more popular in this era of constant deficits, is the vow that taxpayers will not have to pay a dime and that the development will spur massive numbers of jobs and an economic rebound.

Trouble is, according to those who have studied such things, neither is generally true.

First, jobs. Villaraigosa said the stadium complex would create more than 22,000 jobs, an assertion that drew a laugh from Brad Humphreys, an economics professor at the University of Alberta, Canada, who has studied such facilities for years.

"That's way outside the usual garbage that I read," he said. "The best estimate ... would be zero jobs created." Construction jobs, he explained, would be the most visible, but they would be short-term.

Humphreys and colleagues studied every city in North America that had built sports facilities in the last 40 years, "and we were unable to find any evidence that the local economy ever did any better," he said. What such developments tend to do is move existing money, and presumably jobs, around -- as, say, entertainment dollars that would have been spent in Westwood are spent instead downtown.

Second, it is rare for a city to not pay a dime, even when it says it won't. In the case of Farmers Field, the development probably would require infrastructure work, including roads, utilities and sewers. City officials say that until the AEG offer is tendered, it is unknown who would foot those bills.

The details released so far indicate that the city would be asked to float $350 million in bonds to pay for upgrades to the Convention Center, part of which would have to be torn down to make way for the field, and to retire existing Convention Center bonds. AEG chief Leiweke said revenues from the project would be used to pay off the bonds, but it was not clear how that debt would be covered in the years before the facility opened. And it is not clear whether Leiweke's promise that no city money is to be used would be written into the contracts.

Further, cities have inevitable limits on the amount of bond debt they can accrue, meaning that issuing bonds for the football field would give the city fewer options to finance other priorities.

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