June 28, 2011
AEG reshuffles taxes for repaying L.A. stadium bonds
AEG's Tim Leiweke "tweaked" his company's Los Angeles NFL stadium proposal (in the universal assessment of headline writers) yesterday at a Los Angeles town hall meeting. The main new elements in the latest AEG pitch look to be:
- Instead of the city building parking garages, a private operator would, cutting the amount of city bonds needed from $350 million to $300 million.
- Instead of garage revenues going toward paying off the debt, the city would use AEG's ground lease payments on the stadium plus property tax kickbacks (the previously discussed TIF) and existing ad revenue from AEG's ad boards around the convention center. A ticket tax would still be used for the rest of the bond payments.
Leiweke said the new revenue streams would be less risky than parking revenues, and at least it would avoid something akin to the New York Yankees parking garage bond fiasco. It also seems to be mostly taxpayer money, though, albeit much of it money that taxpayers might not receive without the project. Still, the upshot is that AEG wouldn't be paying taxes that other developers normally would have to — or more to the point, would be getting to take their tax payments and use them to pay off their construction costs — which is very much like the Yankees deal.
The new bond payment plan is clearly designed to calm the jitters of L.A. city councilmembers who'll be voting on the deal; L.A. Observed's Bill Boyarsky, for his part, thinks it will do the trick. We should find out more on Thursday, when AEG formally submits the plan to the council, but it sure would be nice if somebody reported on this with more than an AP story so we could have half a clue now.
This is fantastic news, go AEG & Tim Leiweke!!! Continue to develop & enhance our downtown region!!!
Posted by bottomline on June 28, 2011 07:49 PM
I really hope this stadium gets built. That way, once the Santa Clara stadium fails, the 49ers will finally be able to move to LA.
Posted by John on June 28, 2011 08:41 PM
I really hope this stadium gets built. That way, once the Santa Clara stadium fails, the 49ers will finally be able to move to LA.
Posted by John on June 28, 2011 08:42 PM
Whoops. Double-post. Sorry about that.
Posted by John on June 28, 2011 08:42 PM
What Tim Leiweke still can't answer is what L.A. will use to pay off the bonds they still have to service for the remainder of the Convention Center.
Remember that L.A. eats the costs of the demolition and the construction of a much smaller CC wing as a result of a publicly-subsidized NFL stadium.
And the NFL team that's persuaded to relocate to Los Angeles? That millionaire's team will not only will keep virtually every penny in NFL revenues, sharing nothing with Los Angeles - they'll even get a big hunk of the $700 million Farmers Insurance naming rights pot.
Like Santa Clara, LA is now another loser in the rigged game of "stadium poker" that AEG's dealing.
Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org
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Bill,
I would rather the 49ers move to Los Angeles and make them into losers than stay here and make Santa Clara into losers.
Posted by John on June 29, 2011 02:56 AM
No argument there, John.
But that changes the fact of the ripoff of Los Angeles by AEG - and later the NFL - not one single bit.
Same crooked game.
Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org
-=0=-
The AEG stadium is a bad deal for the city. It would create a traffic nightmare plus cost the taxpayers more in the long run. PLUS it would be a small stadium, wouldn't even be among the good ones in the NFL.
Posted by Tiffybean on June 30, 2011 12:22 PM
The AEG stadium is a bad deal for the city. It would create a traffic nightmare plus cost the taxpayers more in the long run. PLUS it would be a small stadium, wouldn't even be among the good ones in the NFL.
Posted by Tiffybean on June 30, 2011 12:58 PM
The plan/proposal calls for bonds in "the high $200 millions"(no longer $350 million) to replace the West Hall of the L.A Covention Center and for AEG to lease the stadium land-and pay an amount that would cover any shortfall to service the debt on the bonds! AEG would also pay for 2 parking garages-on Cherry and Bond streets-that were originally on the city's side of the ledger as part of the $350 million in bonds. "Its the best deal anyone has ever offered to a municipality for an NFL stadium"!
Posted by bottomline on July 2, 2011 03:09 PM
Bottomline,
Please let the Santa Clara Council know about this "best deal!"
Because we were being told last year that we were getting the same.
Posted by santa clara jay on July 2, 2011 04:46 PM
I knew about that so-called reduction in the bond face amount, and commented it into another thread here, Bottomline.
Los Angeles shouldn't even be issuing that $200M - AEG and the NFL team that locates there should pay for it all.
An NFL team will suck over $100,000,000 out of any stadium you could get taxpayers to subsidize - every year. Los Angeles and it Agencies will get virtually not one penny of those revenues.
So the best you can do is to have Los Angeles break even? Still a rotten deal for L.A. and for Angelenos.
That's why your "bottom line" doesn't work, Bottomline.
Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org
-=0=-
Posted by Bill Bailey on July 3, 2011 01:06 PM
In fact, I managed to leave out the worst part of the short end of the stick that AEG is offering Los Angeles:
L.A.'s total loss of Convention Center business from the demolished East Wing - for which AEG still refuses to reimburse the city.
Note also that in the middle of all this "good news" that AEG is making up only a *shortfall* in bond repayment, *not* the entirety of their debt service. That will probably be far less than L.A. will lose in CC biz -- so any way you slice it, Los Angeles is left with a negative return for what isn't even any kind of an investment.
Someone on the Los Angeles City Council barked - and AEG threw 'em a dog biscuit. That's all that's happened here, Bottomline.
Bests,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org
-=0=-
That may very well be Mr Treasurer, but I sure as he** dont see anybody else coming up with a better proposal?! Do u?! Other than saying how terrible this development would be for the city, do u have anything constructive to say? Like, perhaps how the developers can put up some kind of collateral up(just a thought) in return for the bonds to make this deal more palatable?! Im just tired of hearing all this negative rhetoric being spewed about something that can potentially be good for the community!
Posted by bottomline on July 12, 2011 02:38 AM
One thing's for sure, Bottomline.
Not once have YOU ever been able to come up with a "better proposal."
Again: It's your inane idea - you prove that it pays.
It doesn't.
Bests,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org
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Perhaps u r right Mr Treasurer, this may very well be a financial armageddon for the city. But atleast some of us r willing to back this proposal with the hopes that something good will come out of it. There is no such thing as a perfect private/public investment proposal, there will always be a risk factor. The key would be to try & safeguard it(for the taxpayers) as best as possible.
Posted by bottomline on July 13, 2011 01:49 PM
Why would you back a proposal that is a clear loser for the City of Los Angeles?
You're not doing a thing to protect taxpayers with your stadium proposal, by the way.
Do the numbers. Prove your case.
What? You can't?
Bests,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org
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