It must be hard for the mayor’s “Blue Ribbon Commission” on the downtown NFL stadium to keep such straight faces as they sit through a series of public meetings inquiring into what was a done deal months ago.
In the name of due diligence, they are staging a double-header today, climaxing the dog-and-pony road show performances that started Friday in the San Fernando Valley with an overview of all aspects of the project.
At the end of that session, the soon-to-depart Deputy Mayor Austin Beutner, the investment banker and equity fund manager who serves as chairman, conceded in response to my comments that “it’s still early.”
By that he meant there are no studies of the economic or environmental impacts of the project, the infrastructure improvement costs, comparative analysis of the regional impact of the downtown vs. Industry stadium proposals or many other critical details.
What was totally clear was that the city gets no direct revenue from any aspect of AEG’s stadium, parking lot or the presumed AEG takeover of the reconstructed Convention Center as part of its Staples Center, LA Live hotel and entertainment operations.
All the direct revenue — leasing the city land, sales tax, ticket tax, parking tax — will go to pay off the $350 million in new city borrowing needed for AEG to tear down the Convention Center’s old wing. Even that won’t be enough so AEG’s owner Denver billionaire Phil Anschutz will need to pay up to $10 million to cover the city bonds cost.
The property tax increases generated directly from the stadium and indirectly by all the new luxury hotels, restaurants and bars that will flourish when construction is complete in 2016 will go to the Community Redevelopment Agency or its successor if the Legislature abolishes it on Thursday.
The City Council will see to that with its outrageous approval today of a subterfuge that undermines Gov. Jerry Brown’s efforts to restore California to financial solvency by protecting the property tax increment increases in all CRA project areas like downtown from going to schools or the city general fund.
This is one of the sweetest deals in the history of City Hall’s sweetheart deals — a deal so artful that the “Blue Ribbon Commission” made up of businessmen and dealmakers could not help but admire, showing their respect with softball questions.
The city’s business leaders, led by Carol Schatz of the Central City Association, didn’t even need to ask questions about the vagueness of AEG’s proposal. They simply stood up and saluted.
No one can deny the beauty of the deal from AEG’s perspective.
It’s an absolutely sure thing without risk to the company: Free land, free road improvements, probably reduced DWP rates and free sewer hookups, maybe even a three-year business tax holiday like other new businesses are getting.
It’s perfectly clear that AEG’s actual investment is small. The NFL will put up as much asa $250 million as it has for new stadiums in New York and Dallas suburbs; the city $350 million plus the freebies, and bankers will provide a lof of the upfront investment.
The only commitment AEG is making is the company they are forming to own the stadium and pieces of the San Diego Chargers and a second team to be named later will not put the city’s deficit-laden general fund at risk to paying any of the bills– a fine line distinction that excludes the DWP and all other city special funds.
In other words, taxpayers face a no-risk, no-gain proposition. Any revenue to the city will come years down the road, if at all, in the form of increased sales and hotel taxes generated indirectly from the promise of a boom that will come to downtown from all those football fans and all those major conventions that will die to party at LA Live.
But that’s OK with the mayor and everyone else at City Hall.
There will be construction jobs that will put ex-gangbangers and trades people to work and lots of opportunity for “living wage” jobs serving beer and hot dogs on Sundays in the autumn.
Jobs are all that matter in the calculus of measuring the value of this deal — that is the official policy of City Hall which has destroyed more jobs — 100,000 more — than it has created with its policies over the last three decades.
You can trust these people and even re-elect them today if you want. But I’d rather invest my money in a piece of AEG if I could than in City Hall. AEG is a winner, City Hall is a loser.