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January 10, 2011
AEG promises "completely private stadium" on public land
Still no financing plan for AEG's proposed downtown Los Angeles football stadium, but lots of headlines:
- AEG is "close to" a naming-rights deal with Farmers Insurance, according to "sources familiar with the negotiations."
- AEG exec Tim Leiweke promised L.A. Times columnist Steve Lopez that it would be "a completely private stadium" and AEG wouldn't consider taking "a penny from taxpayers." To which Lopez points out that AEG is asking for a $1 lease on city land, plus $350 million in city-floated bonds (which AEG would pay off, but presumably at a cheaper interest rate than they could get themselves).
- There was a big piece in the New York Times on Saturday recapping everything everybody already knows about L.A.'s twin NFL stadium battle.
Note that none of the stories were prompted by actual investigative reporting, but rather by leaks and press statements by people involved in the deal. All in the service of building "momentum," no doubt...
Not "a penny from taxpayers?" Does that include the tens, if not hundreds, of millions of dollars in road upgrades to deal with the tsunami of cars on game days? Do we really want all those cars downtown?
Posted by DowntownFan on January 10, 2011 01:25 PM
Good points from Lopez. It is nice to see stadium/club owners not getting a free pass from reporters.
Yes, transferring the municipal goverment borrowing rate (effectively) to private businessmen can be called a form of subsidy (without the preferential interest rate, the project's economics become considerably complicated, if not unacceptable). However, IF the business involved is fully bound to pay the interest no matter what (including, for example, a personal guarantee in the event of project failure etc), then the 'cost' to taxpayers is limited to the loss of borrowing opportunity (op cost) the stadium requires (IE: every municipality has a limit to what it can borrow, and any debt not associated with actual public projects limits their ability to borrow for same).
This type of thing (governments taking on debt but requiring the beneficiary business to pay the carrying cost) is becoming more common for all kinds of projects - housing, public buildings, even toll roads/bridges, I'm told. Perhaps this is happening because the "It won't cost us anything!!!" lie - at least as regards sports facilities - has now been fully and completely exposed in many locales.
I'm not suggesting AEG are saints... but perhaps a lesser antichrist than some of their counterparts.
They're calling for an environmental impact report for the Los Angeles Events Center and won't budge on that. AEG is putting all this out so they can get the city to hand control of the Convention Center over to them. AEG getting this stadium built is pie-in-the-sky dreaming. I think AEG wants to get in on the Industry Stadium and get control of the Convention Center. Our Mayor and AEG want the San Diego International Comic-Con in 2015 and they're doing whatever they can to make that happen. They get that convention and it becomes the BIGGEST pop-culture convention ever and perhaps more of a TV/Film industry then about actual comics.
Posted by kombayn on January 10, 2011 07:31 PM
The West hall of the convention center is outdated and does not make the City any money. A state of the art convention center/football stadium would boost the local economy and make the City much more in taxes. We are extremely lucky to have AEG in Los Angeles.
Posted by David on January 11, 2011 01:26 AM
The West hall of the convention center is outdated and does not make the City any money. A state of the art convention center/football stadium would boost the local economy and make the City much more in taxes. We are extremely lucky to have AEG in Los Angeles.
Posted by David on January 11, 2011 01:26 AM
David, you have to be kidding me. The West Hall the last time I checked is a part of the entire Convention Center, so when they hold a convention in Downtown Los Angeles they use the West Hall as well. It's been said that AEG would have to replace that part of the Convention Center if they build the football stadium because they need the space. I still think AEG is just having a pie-in-the-sky dream. I don't think they'll actually be able to build a Downtown Stadium, I think they just want the City to hand over the convention center booking over to them. I'm not sure how I feel about that unless the City gets the proper revenues back.
Posted by kombayn on January 11, 2011 01:42 AM
beware of developers promises...
Posted by paul w. on January 11, 2011 02:32 PM
Los Angeles 49ers, here we come!
Posted by Bob on January 15, 2011 07:43 PM