That's just a portion of what the city hopes the project will generate, but it does show that a large piece of what the city expects to gain in additional revenues will just be cranked back into debt service. No one would expect to build a new convention center for free, but these revenues are, in a real sense, the taxpayers' "dimes."
As for the financial guarantee, the city's consultants are unhappy that the guarantor is AEG. If the project turns out to be a bust, AEG's bottom line could be the first casualty — possibly hindering its ability to cover losses. CSL says it's "imperative" that the guarantor be an entity with bigger pockets — Anschutz personally, perhaps?
All the financial projections, moreover, implicitly assume that when the bonds are paid off in 34 years, the city will have a lovely stadium and convention complex free and clear.
To the NFL, however, a 30-year-old stadium is a slum, no matter how fancy it was at birth. Convention centers have a shelf life almost as short — the downtown facility opened in 1971, was rehabbed twice in the 1990s and today, less than 20 years later, is a superannuated white elephant compared with its competitors. This raises the issue of who is to pay for the upgrades sure to be demanded by the NFL, AEG or other interested parties long before the new bonds are paid off. From what I could glean, the MOU's 111 pages, incorporating CSL's findings, are silent on the point.
CSL also expressed some misgivings about the value of an expanded convention facility. The firm found that even with additional state-of-the-art space, the number of major conventions — the mega-events that bring in out-of-towners to fill hotel rooms — might increase from an average 24 a year now all the way to 29. That's a lot fewer than the 38 projected by consultants hired by AEG.
As CSL observes, L.A.'s chief regional competitors (Anaheim, San Diego and San Francisco) are upgrading their own convention centers, so they're likely to maintain their competitive lead over L.A. Also, downtown Los Angeles offers only 1,685 hotel rooms within half a mile of the convention center. In Anaheim and San Diego, the figure is closer to 8,000. In San Francisco, it's 19,000. The marketing challenge for even a spiffy new L.A. convention center "should not be underestimated," the consultants wrote, understatedly.
If the city can really get a football stadium built entirely with private funds and upgrade the convention center with a reasonably modest investment, this deal could indeed be a win-win. But there are still plenty of points on which the city could be bamboozled or steamrollered. Would another month's delay to provide for careful scrutiny really be fatal? So far, the council has shown admirable spine in dealing with AEG. This would be the wrong time to convince itself that the road to a stadium has no more hidden potholes.
Michael Hiltzik's column appears Sundays and Wednesdays. Reach him at mhiltzik@latimes.com, read past columns at latimes.com/hiltzik, check out facebook.com/hiltzik and follow @latimeshiltzik on Twitter.
