L.A. City Council Approves Financing For AEG's Farmers Field Plan
The L.A. City Council yesterday "approved the outlines of a $1.5-billion deal to develop" Farmers Field and a new wing of the convention center, according to Zahniser & Farmer of the L.A. TIMES. The unanimous vote is the "most significant step toward bringing NFL football" back to L.A. It also is a "victory for politically influential developer" AEG, which "overcame concerns from some council members and activists that the city was rushing into a risky deal that could compound its budget woes." In the end, city negotiators "shifted more financial risk to AEG and promised a full examination of the project's environmental impacts." AEG President & CEO Tim Leiweke said, "It sends a very strong message to the NFL owners. We did it. We were unanimous." More detailed negotiations "will continue for months, but AEG can now step up efforts to pursue a team from another city -- a linchpin of the development agreement." Cowboys Owner Jerry Jones: "It's big for the leaders there to make the commitment they have." AEG already is "working on state legislation to limit the type of legal challenges -- including one it fears from backers of a competing stadium in the City of Industry -- that could be filed against the project on environmental grounds" (L.A. TIMES, 8/10). In Orange County, Scott Reid writes the city council vote "not only sent a clear signal to the NFL’s league office and owners’ suites, but also shifted the dynamic in AEG’s bid to bring the NFL back to the Los Angeles-Orange County market." L.A. City Council President Eric Garcetti: "They need this market. We want them to be here with one team, maybe two teams. But today I think the NFL knows Los Angeles is open for business for football" (ORANGE COUNTY REGISTER, 8/10).
READY FOR THE NEXT STEP: ESPN L.A.'s Arash Markazi wrote yesterday's vote was "perhaps the biggest step Los Angeles has taken in 16 years of trying to bring the NFL back." An actual deal between AEG and the city is "still about 10 months from becoming a reality, with the completion of an environmental impact report not expected until the spring." AEG is "hoping to begin construction on the project in June 2012, with Farmers Field opening in September 2016" (ESPNLA.com, 8/9). In L.A., Jon Regardie wrote the vote "marked a significant, if not defining point, in AEG's effort." Leiweke indicated that an "announcement about a franchise in Los Angeles would not occur until, at the soonest, the end of the upcoming NFL season," adding that "no construction will occur until there is an agreement with a franchise." He reiterated that in any deal, AEG Chair Phil Anschutz "would have partial ownership of the franchise." Leiweke said that the deal "does not work financially without that" (LADOWNTOWNNEWS.com, 8/9). He said, "It does not make sense for us to be only the landlord. We are looking at a model like Staples, where Mr. Anschutz has an interest in the teams. ... He has agreed to allow us to go to design drawings. But we will not invest the $1 billion-plus for a stadium without a team" (L.A. DAILY NEWS, 8/10). Several franchises have been mentioned as possible tenants for Farmers Field, and Leiweke said, "I think up until now we’ve been pursing them. My guess is that game will change a bit" (ORANGE COUNTY REGISTER, 8/10).
COMING TO L.A.? The L.A. TIMES' Sam Farmer notes the "prospect of the nation's No. 1 sport returning to the No. 2 market is more real than it has been in a decade." Jones said, "I'm very encouraged." If AEG "has its way, a franchise will relocate to L.A. this spring, use the company's Home Depot Center as a training facility, and play in the Coliseum or Rose Bowl until Farmers Field is ready for the 2016 season." The Chargers are "the clubhouse leader." Farmer predicts the Vikings "will get a deal done in Minnesota, and it will be more difficult than people think to extract the Jaguars from Jacksonville or the Bills from Buffalo." Sources said that Chargers Owner the Spanos family and Anschutz are "far apart on how much of the team he should own, and how much he should pay." Anschutz is "looking for a deep discount, and Chargers President Dean Spanos isn't likely to go for that, no matter how dazzling the L.A. stadium might be" (L.A. TIMES, 8/10). In L.A., T.J. Simers reports some say the Chargers "already have an understanding with Leiweke & Co" (L.A. TIMES, 8/10). ESPN Radio 710 L.A. host John Ireland said, "I think the Chargers are coming, and I think they are going to announce that they’re coming at the end of this season. ... If AEG has their way, the Chargers announce that they are coming February, move temporarily to the L.A. Coliseum, play there for three or four years and either 2015 or 2016 move into Farmers Field." ESPN Radio's Mike Golic: "This is a complete situation where teams have the leverage. ... They can hold cities hostage as much as they want because of the popularity of the sport” ("Mike & Mike in the Morning," ESPN Radio, 8/10). An NFL exec said yesterday, "What that vote did, is make it less about Los Angeles trying to secure a team to now a race among teams competing to be in that market. ... It will happen pretty quickly." The exec added, "When you think about how much more money you can generate for your sponsorships and your suites and club seats and sponsorship packages, they are quadruple in that market compared to smaller markets" (L.A. DAILY NEWS, 8/10).
STILL NEED RIGHT SITUATION: SportsCorp President Marc Ganis cautioned if the situation "is not managed well, there is going to be a real problem." Ganis: "You have to get the right team, the right economics, the right marketing plan and, if not, history has shown that even the great initial elevation will not be enough to save the situation." In L.A., Bill Plaschke reports the NFL is "quietly worried that the eternal opportunists known as the Raiders are circling and swooping and waiting for a chance to dive in and make a mess of everything." But Plaschke writes, "Hey, Oakland Raiders. ... Don't come back. Don't even think about coming back" (L.A. TIMES, 8/10).
FACING THE COMPETITION: Majestic Realty VP John Semcken yesterday released a statement touting his firm's competing project at Grand Crossing, 20 miles east of downtown L.A.: “Our stadium proposal will generate more money, jobs and long-term success for the region and the NFL. We are more active than ever and are currently working with the league, owners and teams to bring a franchise back to Los Angeles” (THE DAILY). Leiweke said that AEG "would drop its plans for a stadium if Majestic is able to land an NFL team first." But he added that he hoped Majestic Chair & CEO Ed Roski, a partner with AEG on Staples Center, "would join forces downtown." Leiweke: “I would hope if Ed wants to bring the NFL back to LA he’d get behind our project" (ORANGE COUNTY REGISTER, 8/10). In California, Jim Alexander writes, "AEG's parade of announcements over the past few months hasn't actually brought the NFL any closer to LA, but it has achieved one thing. It has sucked all of the oxygen out of the competing City of Industry stadium project. Anyone heard from Ed Roski lately?" (Riverside PRESS-ENTERPRISE, 8/10).