The Associated Press is reporting that Hollywood Park Land Co., the group behind Inglewood's most ambitious civic project ever — a proposed $1 billion NFL stadium at the closed Hollywood Park race track, actually do want locals to pony up $100 million in the first five years after opening. That's quite the opposite of what the stadium folks were claiming last week.
The Kroenke Group and Stockbridge Capital Group stunned pretty much everyone in SoCal several days ago, with their 80,000-seat NFL stadium plan backed in part by Stan Kroenke, the owner of the St. Louis Rams (formerly the L.A. Rams). Christopher Meany, a honcho with the joint venture, uttered that old promise: “There will be no public dollars, no taxpayer dollars, used for this project.”
Um, except for the new Kroenke-Stockbridge loopholes emerging in a new report.
Sure, there's no upfront tax money being sought for the 298-acre redevelopment (that's about 300 football fields of land, everybody) which would be dense with offices, homes and entertainment venues in a locale easily reached by broad avenues that can handle the traffic — unlike the mess in Downtown L.A.
The developers' 187-page new report, however, talks about a $100 million public payback—at least. This cash would go to developers thanks to tax dollars generated by their own project.
It's not all that hard to follow: Normally these newly generated taxes would pour into local schools and other public needs that can get stressed to the max by dense development.
Gov. Jerry Brown got rid of the California's “community redevelopment agencies”—powerful municipal bodies who tapped into this particular art. Brown, as mayor of Oakland, watched for years as developers built gorgeous luxury complexes and then kept for themselves some of the new taxes that their ATM-like buildings generated. Meanwhile, parks, schools, streets and sewers from San Diego to Los Angeles to Oakland to Sacramento grew positively ancient in some parts of town.
The claim has always been that a gleaming private development “won't pencil out” without public payback.
Now the Kroenke-Stockbridge group is trying to craft, essentially, its own miniature Inglewood Community Redevelopment Agency so it can hang onto $100 million to pay for the very things its NFL stadium, condos and office towers require to thrive: new street lights, sewers, fire hydrants, shuttle buses, game-day police security and the like.
Not so fast. According to an expert reached by AP, the promise that the developers made to Southern Californians just last week—no public help—can now be chalked up to “hyper” spin and poor credibility:
Chicago-based sports finance consultant Marc Ganis said claiming no tax money would be used in the project is “hyper-spin” and could damage the project's credibility.
“It's not an outright lie … but there will be people who think it is,” Ganis said. “They might be prospective tax dollars, and it might make sense for Inglewood to contribute them to the project, but they are tax dollars.”
Inglewood Mayor James Butts has already said the deal seems favorable because the city won't invest hundreds of millions of dollars up front. “We get revenue that we didn't have to make a financial investment for. That is unheard of in a project of this magnitude,” Butts told other media.
Inglewood is a middle-class and working class mostly black city that has struggled with gangs and joblessness—yet it perseveres. It abuts Los Angeles, which is good, and its location is wildly enviable in numerous other ways: Yes, Hollywood Park is in a dodgy area, but it's also on the Greater Westside near LAX, the 405, a couple of decent malls and multi-lane boulevards built to handle mass traffic.
For years, people have eyed Inglewood as the next big thing in Southern California, but Inglewood has not really happened.
Then, Madison Square Gardens came in a few years ago and fixed up the nearby Forum, which is now a gorgeous, thriving entertainment and show venue. And the owners of Madison Square Gardens are no slouches— they did their homework first, deciding that the post-recession Inglewood area was ripe for a hipster/ticket-buyer explosion.
The stadium developers would apparently get back $50 million to $60 million of their own generated taxes early on, Meany said in a statement, as the project starts creating revenue and thus taxes.
But they also want the City of Inglewood to cover their real costs on “event days” for police, emergency medical crews and shuttle bus services from off-site parking. That chalks up to $8 million a year. But, as we all know, those kinds of human employment costs climb each year, and forever. Economists are expected to note that the $8 million is a startup price, not the mature true cost with all its moving parts.
If Kroenke and Stockbridge have the vast financial resources they've been crowing about, and clearly they do, why snag the struggling Inglewood area, which is finally turning a corner, for a municipal payback?
This fiscal plan is meant to address a ballot measure in 2015 in which Inglewood voters would decide if the stadium idea was a go. But clearly, language will now be added to the ballot that somehow puts residents on the hook for open-ended “event day” costs, plus that early ding of up to $60 million.
The Hollywood Park Land Co. is already developing the adjacent 238-acre tract of homes, parks and office space at the grand old race track, which closed to great fanfare in December of 2013. Kroenke owns an adjacent 60 acres, which would be added to those 238 acres.
And in urban Los Angeles, there's no big chunk of development-friendly flat land like that left.
Inglewood Mayor Butts keeps insisting the project is “100 percent capitalized” by the developer. What he means by that, as he told KNBC-4, is this:
“They're willing to pay up to $8 million per year to provide for increased public safety, park staff, maintenance of the parks, maintenance of the roads out of their pocket. The only thing that's required is that, at some point when we make in excess of $25 million in a given year, that we begin to pay back those costs that they have front-loaded for us that, ordinarily, a developer would not have to touch.”
Actually, a number of cities have made the developers “touch” those costs, and permanently. Much of it depends on how smart and business-savvy the elected officials are when facing the money crowd at the bargaining table. More to come on the Inglewood NFL stadium drama.