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Time for a football stadium deal

With jobs, tax revenue and the revitalization of a public asset on the line, the Los Angeles City Council should quit dawdling and allow the project to move forward.

June 19, 2011

Ever since the Los Angeles Raiders took their ball and went home to Oakland in the mid-1990s, Los Angeles has waged an intermittent and sometimes half-hearted campaign to lure the National Football League back to the city, by far the nation's largest without a football team. That effort has been marked by exuberance and disappointment, misdirection and considerable public indifference. As the City Council takes the measure of a new proposal to construct a football stadium downtown, it should recall that history in full — realizing that the city's future does not depend on whether the NFL plays here, but also appreciating that it should not let the most promising football deal it has ever received slip through its fingers because it was too slow or too political to reason effectively.

While safeguarding the city's interests, the council should, over the next few weeks, do what it often finds difficult: act decisively, in this case to approve a memorandum of understanding with AEG, the Denver-based sports and entertainment group, and allow the stadium to move forward.

What's in it for L.A.?

Although some residents have long been eager for football to return, the quest for a local team has failed to engage many others who care little about the sport and have plenty of options to entertain themselves. The conventional draw for a team — the desire for the prestige it would confer — has been notably absent here. But if Los Angeles doesn't need the prestige of a team, it does have other reasons to want this deal. AEG and its chief executive, Tim Leiweke, have revitalized the south end of downtown with their phenomenally successful Staples Center and adjoining LA Live. Once a collection of dilapidated buildings and parking lots, the area now is a hub of sports, entertainment, restaurants and hotels, as vibrant late at night as it is during the day. The stadium would build on that with an arena large enough to hold events as diverse as Pac 12 football, the Final Four, soccer and major concerts.

That means jobs — not just temporary construction jobs but also permanent positions at the stadium as well as at the stores, restaurants and hotels that this project is expected to attract. And with those jobs would come tax revenue for the city, county and schools, benefits that even the least passionate sports fan can appreciate.

There is an additional aspect of this project that makes it more attractive than other recent football proposals. It promises not only a team and the development that accompanies it, but the rescue of a stranded civic facility, the beleaguered Los Angeles Convention Center. As envisioned by AEG and Leiweke, the new stadium would sit on the land now occupied by the center's West Hall. That hall is aging and unworkable, disconnected from the newer, larger South Hall. For it to be functional and appealing, the city estimates that it needs $80 million worth of improvements. Instead, AEG proposes that the new stadium replace the West Hall and link up to the South Hall, creating a vast, contiguous convention space — enough to attract the very large conventions that are today out of Los Angeles' reach.

Then there is the tax revenue the project is expected to generate. Today, the city barely breaks even on the operations of the convention center and is saddled with more than $45 million of annual debt service on the South Hall. If the stadium is built, one consulting firm hired by AEG predicts that it would spur development of 3,064 new hotel rooms, which would nearly double the tax revenue currently generated by existing hotel rooms downtown. That analysis suggests an additional $26 million to $33 million in bed taxes for the city; it also estimates that the increase in convention business from major conventions alone would produce an additional $228 million in annual spending — with the state and local governments getting their share of that in taxes. If those estimates hold, then, the city would not only get a new convention center but would be able to pay off its existing one.

That by itself is reason to support this proposal.

What should the council look out for?

The proposed stadium turns on a paradox: If AEG manages only to run it as a football stadium — with 10 to 12 games a year, mostly on Sundays — the effect on traffic and parking downtown would barely be felt. But if AEG maximizes its potential by holding more events, and thus delivering more in jobs and taxes, then its negative effects would escalate as well. In other words, the more successful the facility is, the more it may inconvenience residents. The council should recognize that conundrum and insist on the rigorous analysis that will flesh out the implications of the project.

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