An L.A. City Council committee "voted unanimously Wednesday to endorse the financial framework of an agreement" between the city and AEG to build Farmers Field and a new wing of the L.A. Convention Center, according to Arash Markazi of ESPN L.A. Last night's vote means "yet another hurdle to the NFL's potential return to Los Angeles has been cleared." The full City Council "will vote on the proposal Tuesday morning." City Council member Jan Perry, Chair of the committee studying the proposed stadium and events center in downtown, said, "This is a giant leap forward." Markazi reported an actual deal between AEG and the city is "still about a year from becoming a reality, with the completion of an environmental impact report not expected until the spring." The proposed agreement "requires AEG to extend a series of financial guarantees over the course of the project as a safeguard against shortfalls." It also calls for the developer to "break $80 million of the $275 million into a special bond financed with tax on already-established AEG-owned properties Staples Center and LA Live instead of a stadium five years away from potentially opening." L.A. Chief Legislative Analyst Gerry Miller said, "To be very clear, there is no public money in the stadium, none" (ESPNLA.com, 8/3). In L.A., David Zahniser noted AEG's Farmers Field project "cleared a major hurdle" last night. City negotiators told committee member Bill Rosendahl, the project's "biggest skeptic," that AEG "has promised to reimburse the city for any convention business lost as a result of stadium construction." Rosendahl: "I’m delighted to see all these answers to my questions." As part of the vote, the committee "recommended that the city retain Nixon Peabody, a law firm hired to analyze the project’s bond financing" (LATIMES.com, 8/3).
THE COST OF DOING BUSINESS: Dallas-based consulting firm Conventions, Sports & Leisure indicated that AEG's plan to land an NFL team for Farmers Field "could cost the company between $2 billion and $3 billion." CSL Dir of Sports Services Bill Rhoda, whose firm was hired by the city of L.A. to examine the economic impact of the project, wrote, "We agree that it is likely that AEG will purchase a percentage of the team and possibly the entire team." In doing so, Rhoda wrote the developer "would be required to pay a major relocation fee, purchase the team and pay for the stadium. Those total costs could easily exceed $2.0 billion and could reach $3.0 billion.” CSL estimates that the stadium and expanded convention center "would result in $133.3 million in indirect tax revenue." The firm contends that the Farmers Field project "would recreate 6,320 permanent jobs, most of them in the service industry, well below estimates by AEG and several labor unions." Meanwhile, Majestic Realty officials confirmed that they "have met with NFL officials since the league reached a new labor agreement with its players" about their planned stadium in nearby City of Industry (ORANGE COUNTY REGISTER, 8/4).
WORTH THE EFFORT: NBC's Al Michaels said L.A. “will have two teams within a decade if a stadium gets built," but no teams will land in the city "if a stadium does not get built." He said, "It’s all about a stadium, that’s what it’s about these days. Cities have leveraged stadiums against other cities -- that’s how the Ravens ended up in Baltimore. … That’s how St. Louis got its team back after the Cardinals went to Arizona. ... We’re playing this game right now where Los Angeles will be used as leverage.” Michaels did note that he is "confident right now that something can finally get done here." Michaels: "My feeling would be if they build a stadium in Los Angeles, an existing team would come immediately. Down the line, they’ll expand because that means too much in revenue to the existing owners. … They’ll play the Super Bowl here every three years, because the National Football League loves glitz, loves glamour, loves Hollywood” ("The Jim Rome Show," 8/2). Pro Basketball HOFer Magic Johnson, who has expressed his interest in bringing an NFL franchise to L.A., anticipated the L.A. City Council would approve the $300M in bonds for a new stadium, saying the deal is "going to get done because it’s a win-win for the city, it’s also a win-win for the people who live in Los Angeles – the taxpayers – and then it’s also a win-win for the NFL” (“Outside The Lines,” ESPN, 8/3).