L.A. City Leaders Show Early Support For AEG's Stadium Project

The L.A. City Council met yesterday to "consider AEG's proposal for a new downtown NFL stadium," and city leaders "embraced the idea and moved to fast-track the project," according to Lance Pugmire of the L.A. TIMES. Council member Janice Hahn, Chair of the Trade, Commerce & Tourism Committee, "recommended a working group headed by the city's chief legislative analyst Gerry Miller to immediately begin studying financing, transportation and environmental issues connected to the project, while also pushing for an independent financial analysis." AEG President & CEO Tim Leiweke, meeting with the council for the first time about the project, "declined to say which NFL owners he regularly converses with and opted to avoid criticizing" Majestic Realty's rival stadium project in nearby City of Industry. Leiweke during the meeting said, "We'll be bringing a team to L.A." He said the NFL has "encouraged us to jump in, they believe this is the best location." A city official said that "local and state environmental impact reports could take up to a year to be completed." If AEG were to "get an environmental exemption, it still would have to complete an environmental impact report." The exemption would "protect AEG from subsequent lawsuits challenging the EIR." The stadium project requires city approval of $350M in bonds to demolish the L.A. Convention Center's West Hall. Leiweke reiterated that the bond "would be paid back with stadium ticket taxes," and that AEG "promised to make up any shortfall." He added, "There's zero risk to the general fund, no public dollars involved." But Majestic Realty VP John Semcken disputed Leiweke's assertion and said, "Saddling the city and the taxpayers ... should be a non-starter for the City Council." During yesterday's meeting, Leiweke also "downplayed L.A. traffic concerns" and noted that AEG "would fund rail upgrades to assist with stadium/convention center access" (L.A. TIMES, 1/20).

STILL WORK TO DO: The AP's Jacob Adelman noted one "potential sticking point could arise from the fact that the city hasn't finished paying back the loan it took out to build the existing West Hall, the convention facility that would be demolished and relocated under AEG's plan." L.A. administrative analyst Jason Killeen said that L.A. city accountants are "working to calculate the debt, which must be paid off before the hall can be torn down, and to determine if that debt can be retired as part of a new bond issue" (AP, 1/19). Killeen indicated that the city "still owes $440 million on the Convention Center and he would not be able to recommend the football stadium deal until specific financial details are provided" (SAN GABRIEL VALLEY TRIBUNE, 1/20). Hahn said, "I think the stars have to be aligned for AEG to make this happen. And I think the stars are the NFL, the stars are certainly the city, and the stars are whether or not we can get a team" (ORANGE COUNTY REGISTER, 1/20).

WAITING IN THE WINGS? In California, Scott Bair writes yesterday's city council meeting offered an indication that L.A. officials "might support the project," and the Chargers have "long been considered leading contenders" to move from San Diego into the new stadium. Chargers Special Counsel Mark Fabiani said, "We have already made a very public commitment that we will not be exercising the exit clause in our lease during 2011. We are going to honor that." The Chargers "can exercise that clause each year between Feb. 1 and May 1." Fabiani said, "We speak with AEG regularly -- on account of our other business relationships with AEG, which we have been very public about -- and we are well aware of their plans, but we have also made clear to the people of San Diego that we will not trigger our lease's exit clause in 2011." Meanwhile, Fabiani noted that the Chargers "have been unsuccessful in efforts to sell a portion of the 35 percent stake in the team held by Alex Spanos, the aging patriarch of the Spanos family." He said, "Some of the time pressure to do so has been relieved by the unexpected extension of the Bush tax cuts ... which means that the capital gains rate" remains at 15% (NORTH COUNTY TIMES, 1/20).