SBD/March 8, 2011/Facilities

Blue-Ribbon Panel Holds First Meeting On Proposed Downtown L.A. Stadium

AEG again pledges to make up any shortfall on financing of Farmers Fields
L.A. Mayor Antonio Villaraigosa's blue-ribbon panel on the proposed Farmers Field NFL stadium Friday "opened public meetings on the $1 billion project," and AEG officials "received a mostly congenial reception from ... business and community leaders who came to hear details of the plan," according to Vincent Bonsignore of the L.A. DAILY NEWS. AEG officials during a 90-minute presentation "repeated earlier promises that the stadium would be built and the Convention Center renovated at no cost" to L.A. taxpayers. They vowed $350M worth of bonds they want the city to issue to raise money to renovate the Convention Center "would be repaid through taxes on ticket sales and parking for stadium events." AEG also "again pledged to personally make up the difference on any bond shortfall, essentially guaranteeing the city will never reach into its own pocket to fund the project" (L.A. DAILY NEWS, 3/5). In L.A., Patrick McDonnell reported AEG said that it "would pay the city a 'fair market rent,' though the fee has yet to be determined." AEG Chief Legal & Development Officer Ted Fikre estimated that the stadium "would generate millions of dollars in sales taxes and other revenue from the city's beleaguered general fund." AEG "has pledged to make up the $6 million to $8 million annual projected shortfall -- the developer's estimate of the difference between the city's new receipts from the stadium project and L.A.'s annual debt service bills on the bonds" (LATIMES.com, 3/4).

STEP FORWARD: In L.A., Sam Farmer reports AEG is "beginning its environmental impact report" for the stadium. Yesterday the company "submitted a notice of preparation to the city, which will in turn make a formal public announcement that the process is underway." L.A. "will hold a so-called EIR scoping meeting on March 30 from 4 p.m. to 8 p.m. at the L.A. Convention Center, giving the public the chance to give input on what issues should be analyzed in the document" (L.A. TIMES, 3/8). BLOOMBERG NEWS' Andy Fixmer noted AEG in the notice set a goal of "having a full environmental report ready by year-end" (BLOOMBERG NEWS, 3/7).

MAKING A NAME FOR THEMSELVES
: In a cover story for the L.A. BUSINESS JOURNAL, David Nusbaum writes while Farmers Insurance "surprised the sports world recently by agreeing to pay" $700M for naming rights to the proposed stadium, that the Farmers name "might one day grace a 65,000-seat football stadium in the heart of Los Angeles ... is not really surprising for those who have followed the company." Faced by competitors such as Geico that are "shelling out hundreds of millions of dollars in an unprecedented advertising spree, the L.A.-based property and casualty insurer needed to score some marketing points." Farmers CEO Bob Woudstra said of the stadium deal, "I never would have believed that an insurer would spend more annually than Budweiser, but it's come to a reality." Nusbaum notes Farmers "first got into sports marketing in 2007, starting on the local level when it decided to sponsor high school teams," which "fit in with a company that primarily sells through a network of 15,000 exclusive independent agents in 30 states." The company then "got into professional sports sponsorships to broaden its marketing." Farmers has its logo on the WNBA Sparks' jersey, a deal that was renewed last month. The company also sponsors the ATP World Tour Farmers Classic "after the insurer upgraded a three-year deal to title sponsor in 2010," and it "decided last year to sponsor the PGA's annual golf tournament at Torrey Pines" (L.A. BUSINESS JOURNAL, 3/7 issue).

PASSION PLAY: WMG Chair & CEO Casey Wasserman, who is working on the stadium with AEG, discussed it in a Q&A with the HOLLYWOOD REPORTER's Daniel Miller. The following are excerpts from that interview:

Q: Why does Los Angeles need the NFL?
Wasserman: My first answer would be that L.A. does not need the NFL, and the NFL does not need L.A. That's one of those fundamental things that has made it challenging to bring it back because no one is operating from a position of need.

Q: So why take on that challenge?
Wasserman: This is one of the last unique things to do in the business of sports, to return the National Football League to the city of Los Angeles. I happen to love the city of Los Angeles; I happen to love the NFL -- and to somehow be a part of that, a helper in that process, is something I've always been interested in.

Q: Staples Center and L.A. Live were quickly embraced by Hollywood. Is the downtown NFL effort getting similar support from the industry?
Wasserman: No question. People don't question going to downtown L.A. to experience the biggest and best events in the world. So that changes the paradigm. To me, the NFL stadium there is the last piece to the puzzle (HOLLYWOODREPORTER.com, 3/7).
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Football, AEG, Facilities

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