Football in Los Angeles Enters Red Zone

The L.A. City Council votes 12-0 in favor of a downtown location near Staples Center, paving the way for a new stadium to open in 2016.

Are you ready for some football? If the Anschutz Entertainment Group, more simply known as AEG, has its way, the NFL will be playing in a dazzling new stadium in Los Angeles in 2016. That's because the group entered into a nonbinding agreement to build a $1.2-billion football stadium, a new city convention hall and two parking structures on municipal land following a 12-0 vote Tuesday by the L.A. City Council.

The decision paves the way to pursue the project in earnest, and also allows AEG to begin pursuing potential teams—either those looking for new stadiums and willing to relocate, or those doing poorly financially and willing to relocate. Another option, although considered remote, could be an expansion team.

The vote clears the way for AEG to begin arranging financing to pay for the stadium and to conclude an ongoing environmental impact report, which the developer hopes to have approved by May 2012. An
announcement is unlikely until after the next Super Bowl.

Farmers Field, as the 72,000-person stadium is expected to be called with naming rights sold to Farmers Insurance, would probably lean toward palatial. AEG already owns the luxurious Staples Center and L.A. Live entertainment complex.

The stadiumproject includes the demolition and replacement of the Convention Center's West Hall, built 40 years ago.

"I feel like we've been handed a vote of confidence," AEG President and CEO Tim Leiweke said. "Today was the best step we've taken to date to bring the NFL back to L.A., and I think it sends a very strong message to the NFL owners.

"In 16 years we've never made it this far down the field."

It's not a done deal that the downtown stadium will get built, but the decision by the City Council is a game-changer throughout the league. For the past two years, Anschutz and AEG have been talking to other NFL owners and, according to Leiweke, are prepared to buy a team if necessary.

But instead of AEG pursuing teams as leverage to make the stadium deal happen, "we're going to see a change now," Leiweke said. "If a team is prepared to move here as early as next year, we'll be ready."

AEG also owns Home Depot Center, which could be used as a training facility, and a relocated team could play at another local venue—Memorial Coliseum or the Rose Bowl—until the downtown stadium is done.

The Los Angeles Rams, after transferring from Cleveland, played in L.A. from 1946-79, then in Anaheim from 1980-94 before leaving for St. Louis.

The Oakland Raiders moved to Los Angeles and played in the Coliseum from 1982 to 1994 before returning to Oakland. The region has been without professional football since, although USC was named college football's "Program of the Decade" by Sports Illustrated's SI.com in 2009.

The stadium project would create about 6,321 permanent jobs and 14,000 temporary construction jobs over three years, according to Jan Perry, who chaired a council committee charged with vetting the stadium proposal.

Under the memorandum of understanding (MOU), AEG would pay for the football stadium and two new parking structures. The city would issue $275 million in tax-exempt bonds to pay for the convention center, which would be built by AEG and designed by Populous, an international design firm.

The bonds would be split. About 30 percent, or $80 million, would be paid directly by AEG and backed by L.A. Live and Staples Center, which AEG owns. The city could foreclose on the properties if AEG was unable to pay the bonds.

The remaining $195 million in bonds would be paid from the city's general fund. The MOU is structured to use about half of the new revenues generated by the project to repay the bond. Those revenues include rent to use the city's land under the stadium, property taxes paid by AEG, parking taxes and a one-time construction tax.

One of the income sources for AEG would be 50,000 square feet of new billboard space. How that is divvied up—whether the city gets any of it—are some of the finer details that have yet to be worked out.

City Administrative Officer Miguel Santana, who helped negotiate the agreement, has called the revenue sources consistent and reliable.  Any additional revenue would go back into the city's general fund, which pays for basic city services like police, libraries and pothole repairs.

A consultant chosen by the city and paid for by AEG, Conventions Sports & Leisure, predicted the project would generate about $210 million in new revenue for the city's general fund over 30 years.

The MOU also requires AEG to build the new convention hall and parking structures before it begins construction of the football stadium. The developer would also have to pay for any revenue lost by a decline or interruption of convention business because of the project.

Leiweke said Philip Anschutz, who owns a majority stake in AEG's parent company, would have to own a part of the football team for the project to be financially viable. He cited Staples Center as a model that works financially because Anschutz owns about 30 percent of the Lakers. The NBA Clippers and NHL Kings also play its games at Staples Center.

The new project would give the L.A. area three major football stadiums, including the Memorial Coliseum (home to USC) and the Rose Bowl (home to UCLA and L.A.-area Super Bowls).

A local team would also likely result in fans no longer being able to view the best game of the day on television, but instead be subject to watching the local team play its road games, or having home games blacked out if not a sellout.


1. Which team would you like to have playing in L.A.: San Diego, Minnesota, Buffalo, Jacksonville, St. Louis or Oakland?

2. Do you want an NFL team back in Los Angeles? Do you even miss it?

3. Are you likely to buy tickets to watch the NFL in L.A., or do you figure the costs would be out of your price range?

—City News Service contributed to this report.

Greg August 10, 2011 at 04:40 AM
L.A. needs an NFL team and either an expansion team or Oakland would fit the bill. L.A. is such a vast market I think a good team would sell out every Sunday. Ticket prices, as long as comparable to other NFL ticket prices, would not be an issue.


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