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September 06, 2011
California legislature mulls bill to fast-track AEG stadium
As expected, two California legislators on Friday introduced a bill to fast-track AEG's planned downtown Los Angeles NFL stadium, forcing any environmental challenges to be resolved within six months. The twist: With just four days left in the legislative session, some legislators said they'd barely have time to read the bill before having to vote on it.
Defense against what it considered frivolous lawsuits was one of AEG's main demands, especially after its stadium competitors in City of Industry got an even more sweeping get-out-of-lawsuit-free card two years ago. It looks like this one could see some opposition, though, particularly from legislators who don't see why their cities' stadium and arena plans shouldn't be similarly fast-tracked: San Diego assemblymember Nathan Fletcher declared, "I oppose this effort unless it's amended to apply to the entire state. Los Angeles isn't the only city to undertake this kind of effort, and if the process is broken, the fix should apply to the entire state." And Senate President Pro Tem Darrell Steinberg of Sacramento suggested that he'd prefer to see a statewide change to environmental laws as well, presumably so that the Kings could take advantage of it as well, if their arena plan ever gets off the ground.
All of which seems like a lot to untangle in the next four days, but if nothing else it could certainly lay the groundwork for a broader exemption next session.
In other Kings news, meanwhile, Mayor Kevin Johnson's arena task force is set to turn in its final financing plan this Thursday, which means it's time for the spin attempts to begin. First up: Developer David Taylor, who promised on Thursday that "if the arena is a go, there will be private investors, big-time investors" will build other projects — why, he might even build a hotel himself. Taylor, of course, is one of the developers hoping to build the arena itself — but a developer would never lie about the likely benefits of development just to win public subsidies, would he?
If a business creating jobs each paying ten to twenty times as much per year as a stadium or an arena were to demand those same breaks from CEQA, that business would be laughed out the Capitol building.
Our California state legislators are completely inconsistent on this issue. If they're still marveling at the level of job flight from our state, they may want to read Assy. Nathan Fletcher's rationalizations above. Carefully.
Bill Bailey, Treasurer,
(CEQA: California Environmental Quality Act)
The San Jose Mercury News (reporter Karen deSa) published an excellent series one year ago about how our laws are really made, documenting how legislation is written for the benefit of special interests, and often how legislation is written by lobbyists. Fully 50% of bills signed into law fall into the category of sponsored legislation (written by/for special interests). The Merc also documented the campaign contributions from lobbyists and amounts spent on lobbyists to get special interest legislation passed (which showed, for example, that special interest legislation written solely for the benefit of the 49ers was backed by $73,000 in funding for lobbyists to get SB43 passed).
The end runs around environmental laws, including the end run for the City of Industry, are part of this special interest/sponsored legislation problem:
There are many articles in this series on sponsored legislation all under the 'News', then 'Politics' headings on the mercurynews dot com website.
Here in Santa Clara, a review by a well-respected traffic engineering firm of the the traffic/parking study for the 49ers stadium environmental impact report showed that the traffic/parking study (paid for by the 49ers) apparently overestimated the number of people who will take mass transit and overestimated the number of people per car who will drive to games. The result is that far more cars are expected on game days (traffic is already predicted at gridlock at intersections leading to the stadium). Go to the online SF Chronicle, search on reporter Al Saracevic's name to find the article on this review of the traffic/parking plan. Be sure to read the comments.
In addition, at last week's city council meeting, the city manager was asked how many agreements have been signed with private businesses to allow fans to use their parking lots on NFL game days. The answer is 'none' at this time. Note that the Santa Clara stadium site has no dedicated parking lot (it's a 14 acre stadium on a 17 acre site), that the dirt lot across the street from the stadium is where Joe Montana's planned hotel will go (so no parking there) and that the adjacent lot is leased by Great America amusement park which has indicated that it will be open on game days (and people who want to park in that lot will have to pay for amusement park tickets). The private businesses are by and large hi-tech companies that need access to their facilities 24/7. They also have insurance companies who will be concerned about liability in their parking lots (open grills, drinking, and the fan violence we saw a few weeks ago at Candlestick). In addition, weeknight games would require businesses to send their employees home at 3 pm to free up the parking lots for fans. Not going to happen. Santa Clara's pro-stadium city council majority have been treating the parking situation in a 'faith-based' manner - build the stadium and the parking will magically appear. Hopefully investors will insist on seeing signed parking agreements before putting up $$ for a stadium.
There's also the option of getting a group of pro-stadium citizen's together to put forth a 'citizen's initiative' as a ballot measure (financially backed and written by the team lawyers, of course) rather than an objectively written stadium ballot measure.
The advantages to a 'citizen's initiative' as we learned in Santa Clara, are huge. 'Citizen's initiatives' are not subject to lawsuits under CEQA, and the team can write the ballot measure to sound like an advertisement for the stadium/arena (jobs! money for schools! regional benefits! yeah stadium!). Then all that's needed is a city council willing to write a ballot question that sounds equally like an advocacy statement for the stadium/area.
In addition, for city-wide ballot measures there is no state law requirement for a fiscal analysis to be included in the ballot information (there is a requirement for state and county ballot propositions/measures to include a fiscal analysis as well as an impartial analysis). So the team can leave the 1 page table of costs, and discussion of the costs/debt/risks/losses, off of the ballot.
What's that you say? You say that the city attorney's impartial analysis should include cost disclosure? Guess again. The impartial analysis can be written to repeat the 'advertising' language of the ballot measure. Santa Clara's city attorney argued in court that financial disclosure of the stadium construction costs was not required in her impartial analysis because the state does not require a fiscal analysis for city-wide ballot measures.
The end result is what we ended up with in Santa Clara - a ballot measure/question/city attorney's summary that did not disclose costs, and a 'citizen's initiative' that can't be challenged under CEQA.
The deck is completely stacked against the taxpayers.
Here's the link to the online SF Chronicle article that points out flaws in the Santa Clara stadium parking/traffic plan:
Speaking of Sacramento, the Bee has this load of tripe, er, article to read today:
The article last week made me snicker for reasons not many will immediately understand. They held a press conference at the corner of Front and V, which is currently a pothole-filled parking lot with poor freeway access that is adjacent to the animal shelter and a really good car museum (in a very old warehouse no-one else wanted).
I thought the idea of holding a press conference like that would be to show the good pieces of property that would be for sale; maybe you hold it at the most prime piece, or at an above-average one, at worst. Because if that's the best piece of property they have to sell, they will NEVER raise $30M from the 20 pieces of land they say they'll sell.
Front and V has zero commercial value. None. They might get $50k for it in today's market.
Take a look at today's article, though. We get our first hints at how much the Maloofs will be paying in rent. It's starting to remind me of Indianapolis -- and I mean that in the nicest possible way.
Mayor Johnson threw the $7B economic impact to Sacramento on a "softball" interview on Kings Announcer Grant Napear's radio show. Hey Sacramento Bee and other local news, please ask some questions about this $7B figure.
Here in Indy, the local news is lamenting how much money will be lost if the NBA lockout remains, but the news neglects to mention that the citizens paid 180 million for Conseco and pay 33.5 million to the Pacers for maintenance for the next three years and that the Pacers get 100% of revenue that goes through the doors. While the Colts pay a paltry 25k per game to play in Lucas, get all football revenue, signage, parking , concessions and suites and 50% of all non football revenue.
Just about any deal Sacremento taxpayers get has to be better than how Indy taxpayers got reamed.
If the legislature makes an exception only for AEG, this would be corruption. Why should one company get its own legal system? The only thing that would make sense would be to change the system for ALL companies, but that would take longer than a few days. Bottom line, AEG should not get special treatment.
In Santa Clara the 'deal' our pro-stadium city council majority worked out has the 49ers getting all NFL revenue and 50% of the non-NFL revenue, and our General Fund gets a paltry $180,000 in rent the first year. The rent is stacked so that the high rents are paid near the end of the 40 years that the 49ers will supposedly play there.
In net present value, they'll pay $8 million to our city over 40 years.
The city's consultant estimated we'd get back 50cents on each dollar of the direct stadium subsidy (over 40 years). Our city's agency is on the hook for all of the high risk fundraising - selling personal seat licenses and naming rights.
A document put forth by the city in June now says the 49ers will pay 15%-25% of stadium construction costs (down from the 53% listed in the non-binding Term Sheet, and the 88% the Yes on the stadium campaign claimed in the months leading up to the election). Our former mayor actually said on TV during the campaign that the 49ers were going to pay 92% of the stadium construction costs. That document also now says that the 49ers don't want fans to pay a ticket tax towards stadium construction - removing the one sure source of income our Stadium Authority would have to pay off bonds.
And it's now unclear whether or not the city will get any of the non-NFL revenue, because the latest paperwork from the city proposes that the Stadium Authority take on far more debt/fundraising, and take on loans (advances) from the 49ers. The Stadium Authority will also have operational expenses, which will be huge.
Bottom line is we don't know where the money is going to come from to pay for this.
Re: Santa Clara,
It would appear that the folks in Santa Clara have read the Colt's agreement. The Colts stated a ticket tax was a deal breaker. Furthermore the Colts got the city to pay them to break the lease on the Hoosier Dome and then got a loan from the NFL for their "share" of the construction costs. So at best the Colts have 100 million of their money for a 750 million dollar stadium. Never mind that the Hoosier Dome was perfectly adequate to play football and Indy just put another 15 million in updates to the Dome. The debt on the Dome was rolled into the cost for Lucas, Irsay wasn't making enough money on suites. The city also added an increase of one percent on sales tax of food, increased hotel taxes and car rentals as part of the revenue package. Part of the Hoosier Dome financing was the original one percent added on food in Marion County, and that was supposed to sunset when the dome was paid off, but like most taxes once the guys got used to the money they kept the tax. So now we have two percent tax on food sales in Marion County and in eight of the nine surrounding counties we get a portion of their increased sales tax on food. The carrot for the surrounding counties implementing a one percent increase in their sales tax on food was they received a cap on that tax back to Indy; Indy gets the first 500k in tax and they get the overage.
We made Irsay a billionaire while we indebted the taxpayers to the tune of one billion dollars in bonds plus interest over the next thirty years. Guess who got the better deal?
The interesting thing to me is that the Colts have been in the top tier of the league for the past 10 years and the deal is still not working out for Indy.
The 49ers have conversely wallowed in mediocrity at best during the same period.
I can see PSL sales being better for a successful team, but apparently that doesn't make enough of a difference...
IndyRes - Thanks for the info.
Now consider that Santa Clara (the city) has 117,000 people total (including kids). It's our city council majority that has gotten us into this mess, and they vote 'yes' on everything the 49ers want. It's not Santa Clara (the county) that's paying for the stadium (although plenty of officials throughout the county were happy to endorse the stadium ballot measure, they just don't want their cities to have to pay anything towards it.)
We don't have the tax base to handle a stadium. They keep saying there's a firewall between the city and the Stadium Authority, but won't acknowledge the risk that the Stadium Authority could become insolvent. We were told during the stadium campaign 'no new taxes, no cost to our general fund' for the stadium.
They are moving full speed ahead without a contract in place (DDA) between the city and the 49ers, and no financing agreement. The document from the city in June showed that the financial risks for the city are mounting.
I second SCJ's comments.
The San Francisco 49ers are basically a 5-11 team that came before our City Council, demanded about $500,000,000 in subsidies - and got it.
They're even making the Santa Clara Stadium Authority sell their PSLs for them - and the same time they're taking control of the naming rights negotiations in order to favor their own interests.
And now the Califoria Legislature is continuing to give NFL teams even more special treatment. It was SB 43 in 2009 - looks like it's SB 292 this year.
Bill Bailey, Treasurer,
They are now talking about making this law more general:
Sacbee has this gem, too (both Steinberg and Gaines are on Think Big):
What I will call a "preview" of the Sacramento arena plan -- the "Nexus" -- is now out. Looks like they're proposing this be about 1/3 private, 2/3 public. I do not distinguish this the way Marcos Breton does.
Aren't they forgetting the interest payments?
Anyway, here it is, for what it's worth:
And, at last, the official report:
The SJ Merc just posted an article on why living rooms are the new NFL luxury suites:
This doesn't bode well for cities like mine that expect to make lots of money off of personal seat licenses to help pay for stadium construction.