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July 28, 2011
L.A. council hears latest AEG stadium finance plans
Amidst all the excitement about the new NFL labor deal and what it means for stadiums, AEG and the city of Los Angeles on Monday announced a revised stadium financing plan, which was the subject of a city council hearing yesterday.
The new plan is being sold as shifting more of the cost to the developer, but it's not actually clear that it would do that. In the old deal, the city would have sold $350 million in bonds to demolish and rebuild part of its convention center to make way for the new stadium; in the new one, the city would only sell $195 million in bonds, while AEG would sell another $80 million. However, the revenue to repay the bonds would still come from the same place: lease and tax revenue generated by the stadium project, including property tax revenue that would normally go to the city. In other words, it's still a TIF.
The advantage of the new deal is that the $80 million wouldn't be on the city's books, so if the money didn't come in and the bonds went into default, it would be AEG on the hook, not taxpayers. Still, it's more a case of putting a cap on a subsidy than eliminating one entirely.
At yesterday's hearing, predictably, no one could agree on what the new plan meant: Councilmember Jan Perry said the plan would not "cost the taxpayers a dime," while her colleague Bill Rosendahl warned that it was "very risky." The Contra Costa Times reports that most of those who spoke were in support of the project, though it's not clear whether they mean members of the council as well.
Meanwhile, Sam Mellinger of the Kansas City Star is taking all this L.A. activity as a sign that AEG doesn't love Kansas City anymore and isn't going to work to bring them an NBA or NHL team. Which would be news, maybe, if not for the fact that AEG's lease means it already has no real incentive to bring a sports franchise to Kansas City to begin with.