Credit City Maven Alice Walton with an enterprising report questioning AEG Tim Leiweke’s hard-sell on tearing down and rebuilding the LA Convention Center to do double duty as an NFL stadium without public money — except for $350 million borrowing and the right to keep most of the tax revenue and profits.
After hearing Leiweke”s song and dance before a City Council committee, the City Maven called up one of the nation’s leading authorities on the business of sports and the law and sports, Lester Munson, long-time writer for Sports Illustrated and ESPN.com.
Saying $350 million in public money is “definitely on the high side,” Munson said: “They should be able to finance a stadium almost entirely with private
money. They don’t want to because they would make more money themselves
if public money were invested in the stadium … They are making a demand
that is beyond the usual ratio of public to private money in one of the
biggest American markets.”
That is the heart of the matter.
Leiweke can say over and over that no public money is involved but it just isn’t so.
City Hall is selling valuable assets for a song and borrowing heavily against the future to pay its bills without solving LA’s financial problems but the truth is a lot of public money is involved.
The $350 million in bonds, the $440 million in debt already on the Convention Center, tens of millions of dollars in lost revenue for four years while the stadium is built and the letting AEG keep parking and ticket tax revenue just as got to keep more than $300 million in taxes on a luxury hotel at LA Live, itself heavily subsidized just as Staples Center was.
It’s crazy when you think about it in a city with crumbling streets and broken sidewalks, with closed libraries and sharply cut parks programs, with soaring poverty and decaying infrastructure — to name just a few of the most obvious problems.
Munson points out that Glendale, Arizona put a referendum on the ballot, made clear exactly what it would cost taxpayers and let voters make the decision on building an NFL stadium for the Arizona Cardinals.
“Because they knew they had to have a yes vote, they had to make it
reasonable, they had to make sure they were protected, they had to make
sure the public money was invested in the right amount,” Munson told the City Maven.
“If local politicans ram it through without a referendum, it’s going to be a bad deal.”
What an idea — let the voters decide. Let the exact terms of the deal be perfectly clear and the public protected when whatever team AEG buys leaves town like the Rams and Raiders did because NFL interest in Los Angeles isn’t high enough to filly an 80,000-seat stadium unless it’s a championship level team.
Would anybody be calling Staples Center a success if we only had the Clippers with their long record of losing and not the world champion Lakers?