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August 10, 2011
L.A. council okays AEG stadium — what now?
And it's on: The Los Angeles city council last night unanimously approved AEG's preliminary deal for a $1.5 billion downtown NFL stadium, including $275 million in public tax and lease kickbacks. If the plan gets final approval, construction could begin next June, though the stadium wouldn't be complete until 2016.
There are still a few hurdles to be crossed, though, before "Los Angeles" starts showing up in the NFL standings again. Among them:
- The council still needs to vote on several environmental and other approvals, which is expected to take place over the next few months. Given last night's unanimous vote, though, it's pretty unlikely that these will present much of a roadblock.
- Lawsuits and the threat of lawsuits. AEG president Tim Leiweke made a preemptive move to head off any legal challenges yesterday, saying he'd ask for legislation exempting the project from environmental lawsuits; or as Leiweke put it, "We're going to need some protection from the crazies."
- Some NFL owner needs to decide he wants to play there — or to sell the team to someone who does. (Leading candidates are the San Diego Chargers, the Minnesota Vikings — oh, just go look at Leiweke's target list.) This could be the trickiest part, given that AEG is going to have a $1-billion-plus mortgage to pay off, and so is presumably going to need to get either a mammoth yearly rent or a hefty share of stadium revenues, either one of which would cut into an NFL team's profits. Two possible mitigating factors: If the NFL throws a bunch of money towards an L.A. stadium (or a team that moves there — same difference), that would reduce the amount of debt that would have to be paid down; and if Ed Roski keeps pushing his City of Industry stadium, there's the slim chance of a bidding war for a team.
That said, it's still an awful lot of money to raise while still providing an NFL owner with the kind of profits he'd be looking for, meaning you shouldn't be surprised if the search for a team goes on even longer than the search for a stadium.
The real story is the 12-0 vote. I think that this is unheard of in the city of Los Angeles. We have such a disfunctional and boneheaded city council I was surprised this is even getting started. Now its time for the LA County braintrust (Zev yari-Slob-Ski), Gloria Molina, Mark Ridley Thomas, to go in and screw it all up, OR take their share of the loot.
Posted by Mark R on August 10, 2011 12:26 PM
Tim Leiweke must be one of those "crazies" who believes global warming is a myth. His careless comment about environmental lawsuit protection goes against what is in the public's best interest - this whole LA NFL Stadium process "reeks" (pun intended).
Posted by Dean Myers on August 10, 2011 12:46 PM
Tim Leiweke must be one of those "crazies" who believes global warming is a myth. His careless comment about environmental lawsuit protection goes against what is in the public's best interest - this whole LA NFL Stadium process "reeks" (pun intended).
Posted by Dean Myers on August 10, 2011 12:46 PM
Any other state or federal laws AEG should be exempted from?
Maybe citizens should just hand this corporation the direct power of taxation, since that seems to be the overall effect.
The part I like best is that the $275M in bonds isn't even directed at stadium construction... it's to rebuild a convention centre that the city owns after the developer knocks part of it down to build the stadium.
The mind boggles...
Posted by John Bladen on August 10, 2011 02:23 PM
AEG is not asking to be kept exempt from state or federal laws. They are conducting a full EIR as required by the state. The very real problem is that anyone with a grudge against AEG, the NFL, or any building project in the city, can and will attempt to derail the stadium project through the courts. Such "crazies" do exist, and AEG is within its rights to seek protection against them in its attempt to get a deal done, a deal which will pump a significant amount of stimulus money into the local economy.
Posted by Bill Clemens on August 10, 2011 04:57 PM
Anyone want to post a betting line on when that convention hall gets rebuilt? My over/under is, "never".
Posted by Ben Miller on August 10, 2011 05:18 PM
I'm with Bill on this. The EP laws in California are ridiculous (to the point where they're stifling business which isn't in the public's best interest), but the protection isn't from the laws. It's from the frivolous lawsuits that get filed against projects like this. I was listening to the radio down here in San Diego today and they threw out a 0-22 record of lawsuits failures against PETCO Park when it was being built until the city finally passed a law that severely penalized a losing party in such a lawsuit at which point they dried up. It appears AEG wants similar protection from people just seeking to make a name suing the stadium project.
Posted by Dan on August 10, 2011 06:01 PM
RE the 12-0 vote, I'd guess it's actually not surprising. Who funds these council people? Follow the money.
I can accept that there are Quixotic lawsuits against just about any sort of development, but I will need a lot of convincing that this deal is in the "public's best interest."
Posted by santa clara jay on August 10, 2011 06:25 PM
I'll tell u "what now", we're that much closer to building a state-of-art" stadium & enhancing our convention center in downtown L.A! Is it a perfect deal? Of course not, however, it's a better deal than the one initially proposed & light years better than anybody elses'(city-wise) nationwide!!
Posted by bottomline on August 10, 2011 09:04 PM
There is nothing wrong with the court system penalizing those who file frivolous lawsuits. There is everything wrong with enacting legislation to prevent such actions from being filed.
If an action is truly baseless, it needn't proceed past an initial hearing before a judge (who can end the action with prejudice if s/he so finds).
Posted by John Bladen on August 11, 2011 01:08 AM
I hate people that file frivolous lawsuits!! They're scum!!
Posted by bottomline on August 11, 2011 01:42 AM
Let's hear it for the L.A City Council & their united effort in backing this potentially great proposal!! Hip hip hooray!!!!
Posted by bottomline on August 11, 2011 01:46 AM
In regards ti the eir. Have you ever been to the area where they want to build? It should be considered environmentally impacted already. It looks like something out of escape from new York. The area is a health hazard already. Anybody who wants to hold this up is obviously not in the trade industry and is employed. Try being an electrician who has been unemployed for over a year
Posted by Mark r on August 11, 2011 01:26 PM
Where there's a will, there's a way! Im sure if it weren't possible, they wouldn't be proposing it. I refuse to think negatively, im not a doom & gloom type person even though it feels like im surrounded by them constantly! What misery, I dont know how people can live like that!
Posted by bottomline on August 11, 2011 03:19 PM
Yeah, I'm Mr. Negative. Why I remember in 2005 being incensed seeing Bank of America newspaper ads encouraging people to use home equity loans to pay for weddings. I guess sometimes I just get gut feelings that things aren't going to turn out well...
Posted by SANTA CLARA JAY on August 11, 2011 06:22 PM
Knock yurself out buddy! If we would listen to people like u we'd be living in a ghost town!
Posted by bottomline on August 11, 2011 08:04 PM
Wow. It's actually happening.
I'm confident that, within a few years, Angelenos will be rooting for their 5-time champion Los Angeles 49ers.
Posted by John on August 11, 2011 08:32 PM
John,
I can only hope the 49ers are on the LA short list, but remember that the 49ers pay twenty four thousand dollars ($24,000) annual rent for 11 acres of city land for their HQ lease. Is LA going match that?
Jed was so mad once that he said if we didn't approve a stadium for him that he would move the HQ! LOL!
Mark my words, this project will come to fruition(theres too much $$ for it not to) & the NFL is coming back(thank God)!!
Posted by bottomline on August 12, 2011 12:09 AM
I really love your blog, it is very informative. Keep up the good work!!
Posted by Golma Garcia on November 21, 2011 02:53 PM