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A day after L.A. Mayor Antonio Villaraigosa and others "warmly embraced plans for a $1-billion football stadium downtown, the idea received a far more sober reception Wednesday at a City Council hearing," according to McDonnell & Zahniser of the L.A. TIMES. Though some council members "waxed enthusiastic, others voiced concern that that city might end up giving too much away to the developer, Anschutz Entertainment Group, or cut a deal that aggravates the city's ongoing fiscal crisis." Council member Paul Koretz: "We're already on a tightrope. One wrong step and we could push the city into bankruptcy." During the council's initial floor debate on the proposal, it "voted to recruit a financial analyst to study the costs and benefits of a new stadium." Council President Eric Garcetti and others "argued the panel should expeditiously gather information on the proposal." But Council member Paul Krekorian was "leading the doubters," saying that the city "should avoid going to 'extraordinary lengths' to speed approval of the project." Krekorian: "What's the rush?" McDonnell & Zahniser note the city of L.A. "has yet to negotiate a deal with the developer" (L.A. TIMES, 2/3). In L.A., Rick Orlov reports the council "created a working group of city staff and a separate ad hoc council committee to negotiate with AEG." They also "plan to hire outside analysts to help review the planned $1 billion development." Krekorian: "All we have is a concept before us. We're talking about how best to negotiate something that has not been put before us" (L.A. DAILY NEWS, 2/3). Also in L.A., Patrick McGreevy reported "two legislative leaders said they are enthusiastic" about the stadium proposal, but they "were chilly toward the idea of approving legislation that would grant the project the same environmental-rule waiver approved two years ago" for Majestic Realty Chair & CEO Ed Roski's rival stadium project proposed in the City of Industry. California Assembly Speaker John Pérez: "I think that the notion of bringing a football stadium to downtown Los Angeles would be wonderful. At the same time we need to be thoughtful about what role we play." State Senate President Pro Tem Darrell Steinberg said an exemption from the California Environmental Quality Act approved by the Legislature in '09 for Roski involved "extraordinary circumstances." Steinberg: "I'm not interested in CEQA exemptions" (LATIMES.com, 2/2).
HOLD YOUR HORSES: An L.A. DAILY NEWS editorial states yesterday's discussion by the City Council "solidified the fact that this project is moving like an unstoppable steamroller," as there were "a few softball questions, but they seemed perfunctory." The editorial: "There's no real proposal on the table, nor an environmental impact report analyzing impacts, and still there's a sense of inevitability." The project "tears down part of the city-owned downtown Convention Center and rebuilds it." The editorial: "How much will the city have to pay for that? Who knows? How much revenue will the center lose during construction? Who knows? ... Who's asking these probing questions? Nobody yet. Indeed, city officials are too busy tripping over each other to stand on the stadium bandwagon" (L.A. DAILY NEWS, 2/3). In L.A., Kerry Cavanaugh writes, "What L.A. needs is a skeptical politician. Some elected leader who is willing to be the skunk at the garden party." Krekorian was the "lone councilman to question why the city was scrambling to review and negotiate a project when AEG hasn't finished an environmental impact report or even offered a formal proposal yet." His fellow council members "jumped all over him for simply questioning the rush," but L.A. "needs Krekorian and others to keep questioning" (L.A. DAILY NEWS, 2/3).
CHECK THE PRICE TAG: In California, Thomas Himes offers the first in a series of stories examining the efforts of AEG President & CEO Tim Leiweke and Roski to bring an NFL team to L.A. Despite Leiweke's "bravado, building a 64,000- to 72,000-seat stadium won't come cheap," and "that may explain why the stadium's reported price has more than doubled since November." Leiweke said that the stadium's price tag "now stands at" $1.35B, which is "nearly double the $725 million it was widely reported that AEG said the stadium would cost when the company issued a request for proposals in November." But Leiweke said that the $725M figure "strictly referred to 'building' the stadium." He added that "for $725 million in 'hard costs' ... he can build an NFL stadium downtown with a retractable roof." By his estimate, it "will cost 'a billion and a half dollars' before a single game can be played when you add all cost involved in constructing the stadium at its proposed site -- $1.35 billion -- and another $150 million to buy into a team." The additional $625M "includes the $350 million needed to rebuild the West Hall of the Convention Center, plus so-called 'soft costs.'" AEG reps "cite the $810 million construction cost" of Cowboys Stadium "as proof a similar venue could be built in L.A. for" $725M. Roski said that his proposed stadium, which he "dubbed the Los Angeles Stadium," would cost only $800M, "in large part because he could offset steel costs by building the stadium into the side of a hill" (SAN GABRIEL VALLEY TRIBUNE, 2/3).
OPPORTUNITY KNOCKS: NFL Exec VP/Business Operations Eric Grubman said that AEG's 30-year, $700M deal with Farmers Insurance for naming rights to the proposed stadium is an "example of the type of opportunity that could be available under a new CBA." Grubman: "It is on the table in that it's been noticed by players. I firmly believe that they are well aware that there's two great developers and great sites, either one of which could be actionable in the very near future in the Los Angeles market. That's very tantalizing" (L.A. TIMES, 2/3). Steelers President Art Rooney II said that he "thought a team would return" to L.A. "by 2016." Rooney: "I think Los Angeles is in the picture by then. It's a great football town. They've supported a few franchises over the years, and hopefully, we'll get another one back there by at least 2016" (NYTIMES.com, 2/2).
The Houston City Council yesterday gave two unanimous votes for the MLS Dynamo that “cleared the last public hurdles needed to build their new stadium on the East End,” according to Jose De Jesus Ortiz of the HOUSTON CHRONICLE. The Dynamo are “free to proceed” with construction, and today the team “will present the latest renderings of the stadium in anticipation of holding a groundbreaking ceremony” on Saturday. The Dynamo are investing $60M of the cost to build the $95M stadium. The Council yesterday approved “what is estimated to be a $3 million rebate for the Dynamo over 30 years on projected sales tax.” The Council also approved the Tax Increment Reinvestment Zone that is “part of the inter-local agreement between the county and city.” The Dynamo will build the stadium and “share it with Texas Southern University’s football team.” Council member James Rodriguez said, “It’s been a long time coming. I think this is a great day for the city” (HOUSTON CHRONICLE, 2/3).
Lightning officials yesterday "detailed $35 million in renovations to the St. Pete Times Forum," saying that the upgrades "will improve the fan experience and continue to attract other events to the arena," according to Lee Logan of the ST. PETERSBURG TIMES. The renovations include an "11,000-square-foot outdoor party deck with a view of downtown" that "will feature 10 areas where fans can buy food and drink and a small stage for postgame events." Also included are an "indoor stage and bar with an old-time pipe organ carved into the arena's upper section." To "make room, the team will remove 574 seats currently located behind the stage during concerts at the Forum." Another feature is a "large lightning bolt that will light up during player introductions and when the team scores." Most of the features "will be in place by next season, though an upgraded west entrance could take a bit longer." Logan notes the renovation also includes "less flashy elements such as replacing the arena's heating and cooling system, upgrading lighting and installing all new seats." Concourses, suites and the locker room "also will get a facelift," and eight suites "will be removed to give better views of the game for fans walking the concourse." Lightning CEO & Minority Owner Tod Leiweke said that the team "will pay for the work upfront and seek partial reimbursement from Hillsborough County tourist taxes," and that the renovations "come without condition and will continue even if the county doesn't come up with the cash" (ST. PETERSBURG TIMES, 2/3). Leiweke added that the renovations "will not spark ticket increases." Leiweke: "This is not a ploy to achieve a double-digit price increase." He also said the arena is "going to have a great sense of space" (TAMPABAY.com, 2/2).
CHARITABLE GIVING: Lightning Owner Jeff Vinik and his wife, Penny, are donating more than $10M through the Lightning Foundation over the next five years. More than $2M will be granted by the foundation each season, utilizing two different programs established by the organization. The first program, "Lightning Community Partners: Giving Back Through the Power of Partnerships," will present four $200,000 grants to major charities in the Tampa area for five years beginning with the '11-12 season. The second program, "Lightning Community Heroes: Honoring Tampa Bay's Community Heroes," will present 25 $50,000 awards to individuals and their representative 501 (c) 3 organizations for the next five years beginning with next season. The Lightning additionally are pledging 4,000 hours of volunteerism from full-time staff each calendar year under the team's "All in For Our Community" program (Lightning).
AEG announced today that it is forming a joint ticketing venture with Outbox Technology and Cirque de Soleil. The new company, Outbox Enterprises, will be run by Outbox Technology CEO Jean-Francoys Brousseau and former Ticketmaster CEO Fred Rosen. The move comes one year after AEG was given the green light to develop a separate ticketing company after the Ticketmaster-Live Nation merger was approved by the Department of Justice. AEG sold about 10 million tickets last year, producing $400M in revenue. Montreal’s Bell Centre is an Outbox account (Don Muret, SportsBusiness Journal). The WALL STREET JOURNAL's Ethan Smith reports the new venture will "sell tickets to events at 105 arenas and theaters, in what could become a broader battle" with Ticketmaster. AEG “expects to start selling its tickets through Outbox in the next six to 12 months, and to have nearly all its venues throughout the world on the new system within two years.” The only exceptions are its sites in Germany, which are “under contract to a local ticketing company.” The venture also plans to “compete for the business of current Ticketmaster clients, as their agreements with Ticketmaster expire.” Instead of selling tickets on a centralized website, Outbox “offers venue operators what is called a ‘white label’ system, in which consumers buy tickets through the venue's website.” Outbox “operates as a mostly invisible, behind-the-scenes player.” AEG President & CEO Tim Leiweke said, "This isn't about trying to go out there and build a whole new brand around the name Outbox. This is about service." Outbox's partners “hope it will be the most significant challenge Ticketmaster has faced since 1991, when it bought Ticketron, its only major competitor.” Smith notes AEG was among Ticketmaster's “biggest clients by ticket volume” (WALL STREET JOURNAL, 2/3).