This is an archived version of a Field of Schemes article. Comments on this page are closed. To find the current version of the article with updated comments, click here.
February 27, 2009
City of Industry approves NFL stadium, needs only NFL team
As expected, the City of Industry council unanimously approved plans for an $800 million football stadium yesterday, paving the way for the NFL's return to the Los Angeles area. John Semcken, managing partner of Majestic Real Estate, which is headquartered in Industry and would build the project, says the company would begin looking for a team on April 1, specifically mentioning the Oakland Raiders, Buffalo Bills and Minnesota Vikings as among his eight targets. (You have to guess that the San Diego Chargers and New Orleans Saints would be in the mix as well.) If nothing else, this is going to kick-start a lot of move-threat-based stadium talks in eight cities across America.
How the project is being funded, meanwhile, remains a bit of a mystery. Majestic says it will pay for construction itself with private money, though land and infrastructure is being covered by city property taxes. With no team in place yet, though, Majestic would no doubt have to pay off what could be $60-80 million a year in stadium debt through venue revenues, which is going to make the place much less attractive as a relocation target. (In the NFL, where all games are on national TV, market size is relatively unimportant; what counts is how much crap you can sell in your stadium.)
This could end up being another Kansas City arena scenario, where the requirement for a lease where the team actually pays some rent makes your building mostly useful as a stalking horse for team's demands for new buildings back at home. Though at least, unlike K.C., Majestic was smart enough not to build the building first; construction won't begin until a team has agreed to move there.
I have to wonder: Any time a governmental body enters into discussions about a new stadium or arena, does a league like the NFL or NBA contact a pro-arena decision-maker in the group and offer some cash? Nothing illegal, but maybe some form of campaign contribution or promise of arena financing is offered? This way existing league owners can use this new city as a potential destination whenever it comes time to re-negotiate its own lease or new arena proposal. We know it's in the best interests of existing leagues to have empty venues available.
I just have a hard time believing a 'city' with 700 residents can afford to finance its own NFL stadium, no matter how many commercial residents that city may have.
Posted by Chris A. on February 27, 2009 11:48 AM
I have to wonder: Any time a governmental body enters into discussions about a new stadium or arena, does a league like the NFL or NBA contact a pro-arena decision-maker in the group and offer some cash? Nothing illegal, but maybe some form of campaign contribution or promise of arena financing is offered? This way existing league owners can use this new city as a potential destination whenever it comes time to re-negotiate its own lease or new arena proposal. We know it's in the best interests of existing leagues to have empty venues available.
I just have a hard time believing a 'city' with 700 residents can afford to finance its own NFL stadium, no matter how many commercial residents that city may have.
Posted by Chris A. on February 27, 2009 11:49 AM
My guess is the Raiders are on their list. Possibly the 49ers too. The 8th team? Jacksonville?
Posted by C Dykstra on February 27, 2009 12:23 PM
Raiders were listed already. 49ers, maybe. Possibly the Rams, if they don't get their "state-of-the-art" upgrades?
Posted by Neil on February 27, 2009 12:29 PM
I think the Raiders moving will be dependent on how senile Al Davis is on any given day, but with their lease expiring it's a very real possibility. The 49ers are also a possible, but IMO less likely tenant. In fact there was an article this morning about a new stadium site possibly being offered up in Santa Clara County at the largely abandoned SCC fairgrounds for the Niners giving them 3 options in the region now.
http://www.mercurynews.com/news/ci_11786274
Posted by Dan on February 27, 2009 07:07 PM
Stay away from the Bills if you know what's good for you.
Posted by Bob on March 5, 2009 04:15 AM
what the Heck we can shaft the tax Payers as arnold has done(Dumbocrat)
looks like we have a Temple City city council here just wonder how much they got for this $$$$$
this will be like the Dodgers (which stadium was to be in el monte) you didn't know that? (we could not have that) so who are they pushing out this time.
The City of Industry deal pencils...barely. The Jaguars are valued at $866 million. If the stadium is built for $834 million the total cost would be $1.7 billion. That money financed at 6.5% over 25 years would cost $137,748,000 per year. With average NFL player payrolls at $135 million and that amount added to costs, as well as $27,252,000 for various operating costs and unforeseeables, the team would cost $300 million per year. In 2008 two teams, the Redskins at $345 million and the Patriots at $302 million, made that much. The Cowboys made $280 million in 2008 but that was before their new stadium. I can't understand why this deal isn't done. Must be some secret socio-eugenetical reason why L.A. is devoid of a team.
Posted by Ben Brown on March 30, 2010 01:33 AM
Honestly, I can only see City of Industry Stadium happening is if Ed Roski can get an ownership group together and buy an NFL team. Bills, Jaguars & Raiders come to mind right away. Maybe the Vikings if the talks go no-where with Minneapolis in the next 2 years.
Posted by NFL in LA on April 19, 2010 05:33 AM