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Stadium Schemes 

The secretive and expensive road to L.A. football

Wednesday, May 22 2002
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It had all the celebratory air of a ribbon cutting last week when honchos from Staples Center shared the stage with the mayor of Los Angeles and a key councilwoman to announce plans to invest $300 million in a new football stadium on the south end of downtown.

Tim Leiweke, president of the entertainment empire owned by Denver billionaire Philip Anschutz, deemed the occasion “a bright moment in time,” and the public officials followed suit. Mayor James Hahn pronounced himself “really excited about bringing the NFL back to Los Angeles,” while Councilwoman Jan Perry, whose district encompasses the destitute South Park neighborhood, proclaimed that “Downtown is back” and predicted that “The entire city will benefit from this investment.”

It was left to Casey Wasserman, grandson of MCA mogul Lew Wasserman and owner of the L.A. Avengers, Staples‘ bargain-basement arena-football tenant, to explain just how far the deal was from done. The league officials have expressed genuine interest, he said, but there’s still no football team signed up -- the Minnesota Vikings and San Diego Chargers are the most likely candidates. No site has been named, and the NFL has yet to commit the $150 million in financing that the stadium developers say they need to close the deal.

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Moreover, Wasserman said, the clutch of millionaires backing the stadium plan are depending on the NFL to designate Los Angeles as the site of at least two and possibly three Super Bowls within the next 12 years. In addition, Wasserman said, they hope to draft “one or both” of the city‘s major college teams to fill out a schedule that will require 32 dates a year to break even.

But this was not an occasion for doubts and caveats. The Memorial Coliseum, a facility renovated just six years ago with more than $100 million in public funds, was not a consideration, Leiweke said, as the NFL is simply not interested in the site. And disputes over public financing had already been resolved by the developers’ commitment to finance the project from their own pockets. “The controversy has been completely neutralized,” Leiweke said.

That was a remarkable statement from a man whose crowning achievement was the construction of Staples Center, which was nearly scuttled by public aversion to spending tax dollars on a private sports facility. In fact, as Leiweke described it, the new project depends on $100 million in public bonds to buy the land, a debt to be repaid out of sales and property taxes generated at the stadium over the next 20 years.

It was just such a financing structure that former Councilman Joel Wachs targeted when he vowed to stop Staples Center itself with a public initiative in 1997. Wachs only backed down when the developers -- principally Anschutz, through Leiweke, and Ed Roski, another partner in the proposed stadium -- agreed they would repay $58 million in land loans from their own revenues, not from tax proceeds.

But if the backslapping congratulations seemed a bit premature at the Staples Center news conference Thursday, that was only in keeping with the rapid-fire pace of disclosures last week. Developers and public officials were first stunned to learn that the deal was in the works, and then jockeyed for position to cash in on the half-billion-dollar project.

The weeklong disclosures about the stadium plans showed once again that when it comes to redevelopment in downtown L.A., city officials are prone to secrecy, as if they understand their schemes won‘t withstand public scrutiny.

The only public official with advance knowledge of the stadium plan, it turns out, was Mayor Hahn, who said he first learned that Wasserman and Leiweke were assembling downtown property as early as last December.

Hahn said at the news conference that he attended the Super Bowl in New Orleans in February in part to speak with league officials about the deal. He said NFL commissioner Paul Tagliabue was encouraging, and said local officials there estimated that hosting the annual championship game brought the city more than $250 million.

But if Hahn was privy to plans for a major new project in the heart of the city, he decided not to share the news with other stakeholders downtown, allowing Leiweke and company leeway to make their initial moves in stealth.

Landowners in the South Park neighborhood learned of the project only when brokers for Anschutz moved to buy large chunks of property. “It came out of the blue,” one prospective housing developer in South Park said of an Anschutz bid on his property. “I went to the Mayor’s Office, the CRA, the Planning Department, the Department of Building and Safety -- none of them had heard anything about this.”

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