L.A. OKs First Steps Toward NFL Stadium That Could Be Used To Lure Raiders
LOS ANGELES (CBS / AP) ― Los Angeles City Council members cast their first ballots on a proposal to build a downtown pro football stadium Wednesday when they voted to form a working group to engage the developer backing the plan and to accept $250,000 from the company for an independent financial account of the potential deal.
The NFL hasn't had a team in Los Angeles since the Raiders and Rams left in 1995. The Oakland Raiders have long been rumored, along with the San Diego Chargers, as possible teams to move to a new L.A. area stadium.
Most L.A. council members voiced support for entertainment company AEG's stadium plan and its potential to deliver needed jobs to the community while returning an NFL team to the city for the first time in some 15 years.
But they said the proposal requires close scrutiny because the 64,000-seat venue will be nestled in the publicly owned convention center campus and would require the city to take on $350 million in debt, which AEG has vowed to service.
"We are not approving a deal here today," Council President Eric Garcetti said of the actions taken a day after AEG staged a lavish promotional event aimed at selling the $1 billion stadium proposal to city residents and leaders. "We are being aggressive about making sure we get people back to work and we are being aggressive about protecting the taxpayer today."
Councilman Paul Krekorian, the only member to oppose the two motions, said AEG has not provided sufficient details about its proposal to justify moving so quickly and that the city risked devoting time and resources that would be better put to other uses.
"We're sitting here having a dialogue about how best to negotiate with this developer, when we don't even have a proposal before us," Krekorian said.
The councilman joined other members voting unanimously on a third stadium related-motion, which instructed city staff to look into what effect the AEG proposal would have on existing plans to privatize the contention center's operations.
The stadium proposal also came up Wednesday at a Sacramento statehouse news conference following a meeting of Democratic lawmakers about green jobs.
Senate President Pro Tem Darrell Steinberg and Assembly Speaker John Perez said in response to a reporter's question that they were against legislation that would give the stadium protection from lawsuits filed over its environmental impacts.
AEG President and CEO Tim Leiweke has said he would seek an exemption from state environmental quality regulations in order to protect the company from legal challenges aimed at stopping the stadium project.
State legislators granted an exemption in October 2009 to backers of a rival stadium proposal east of Los Angeles that nullified a lawsuit.
Steinberg and Perez said that they supported making the state's environmental review process less cumbersome but were opposed to legislation that granted exemptions to specific projects.
"It can't be a one-off solution. It has to be focused on making reforms that don't undermine any of the standards in place," said Perez, who stressed that he did like the idea of having an NFL stadium downtown, which is part of his district.
AEG spokesman Michael Roth said that the company has not asked for the exemption and that it would complete its environmental review, as mandated by California law.
"We would hope that the process can proceed as it should and those that have agendas that are contrary to the people of Los Angeles will not be given a platform," said Roth in a statement that also praised the Los Angeles City Council for supporting the stadium-related motions.
Among the council members whose support for the proposal was tinged with skepticism was Paul Koretz, who voiced concerns about the $350 million in bonds AEG needs the city to issue to relocate a huge convention center structure where the stadium would be built.
Leiweke has vowed that new revenue from the site would service debt from those bonds and that the company would pay any possible shortfalls, but Koretz said the city's perilous budget situation made it a dangerous time to take on new financial risks.
"We're at a point where some people are talking about bankruptcy," he said. "If we did this deal and we did it wrong, I think that could actually be what pushes us over and sends us in that direction."
Natalie Brill, the city's debt management chief, said in an interview that AEG had not revealed enough details about its plan for the city to be able to calculate whether the additional indebtedness would increase its overall borrowing costs or constrain the amount of debt it can take on for other projects.
Cities traditionally use bond financing to pay for public facilities such as police stations, libraries and schools.
Renata Simril, who was deputy mayor for economic development under previous Los Angeles Mayor James Hahn and now gives public agencies investment advice for real estate firm Jones Lang LaSalle, said the city would have to consider such needs when it decides whether to go forward with the AEG deal.
"The city has to weigh its debt capacity against other potential bond financings they need to issue to deal with normal businesses and services," she said. "The balance is going to be against the economic potential that this project provides."
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