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AEG’s NFL Stadium: What’s In It For You and Me?

“Los Angeles has lost something. It no longer fields the kind of
seasoned political leadership that inspires confidence. That’s a loss
far greater than a football team.”

The ink was hardly dry on those words of LA Times columnist Jim Newton when the City Council’s self-styled skeptics on AEG’s NFL stadium plans — Westsiders Bill Rosendahl and Paul Koretz — were proving his point.

As Koretz put it after hearing yet another shift in the proposal espoused by Tim Leiweke at a Mar Vista town hall with Neighborhood Council acitivists Monday night, “By having a good degree of healthy skepticism, this plan already is
considerably better than the one that originally came to us. We have to make sure that, in the absolute worst-case scenario, no
matter what goes wrong — and unfortunately with the Dodgers, we’ve seen
what can happen — that the city is still in good financial shape.”

Koretz’s remark as quoted in Sam Farmer’s report on the town hall in the Times is worth parsing because it exposes exactly what’s wrong with the debate on Farmers Field to this point.

The issue isn’t whether the city gets stiffed by AEG on the loans to tear down and rebuild half the Convention Center — reduced from $350 million to the high 200s thanks to a discount announced by Leiweke Monday night — and it’s not about the worst-case scenario which is the NFL is a dud in L.A. for the third time and leaves the city in even worst financial shape than it is today.

The issue is what’s in this for the city when all the profits from the stadium, the massive array of digital billboards, parking lots and turning over the Convention Center  to AEG — an issue that has gotten zero attention — go to Denver billionaire Phil Anschutz.while all the tax revenues go to paying off the city’s debt of three-quarters of a billion dollars.

It’s not like there’s a groundswell of public demand for a football team at a time when the Lakers are in decline and everybody hates the Dodgers whose owner has stiffed everybody in town, including Vin Scully who the team owes $150,000 to.

The plain truth is Leiweke cut a deal two years ago with the mayor for this stadium and took what was a done deal public last fall with an ultimatum that he wanted a signed deal with the city within three months, no questions asked, no environmental study, no cost-benefit analysis.

He’s been stumbling ever since over the details and needed City Hall to prop him up at every turn with one effort after another to whitewash what’s wrong with a Council;and a citizens committees pre-disposed to believe whatever Leiweke tells them while keeping the debate focused in irrelevant directions.

Isn’t it fair to ask what is in it for you and me, the people who are taking on the debt, paying the bills for all the infrastructure costs and support services like police and will rarely even be able to afford a ticket to a game?

Isn’t it fair to ask, as former Councilman Nate Holden did Monday night, whether AEG fulfilled all its commitments when we gave the company all that land and cash for Staples Center?

Isn’t it fair to ask why we gave $300 million in tax revenue for the Ritz-Carlton and JW Marriott hotel/condominium project at L.A. Live and now find out it’s a financial disaster — one that is potentially so damaging to AEG’s credibility that Anschutz had to buy out the State Teachers Retirement Fund and other investors before their losses got any deeper?

At the town hall, AEG pulled out of its promise to guarantee the city’s debt in this deal, offering instead to build two parking garages — one of which it was supposed to build as part of the subsidies it got for Staples Center — and commit the revenue toward paying off the city’s borrowing.

What AEGt offers the public is the thrill of a downtown stadium as opposed to Ed Roski’s stadium in Ihe City of Industry, which comes without risk or cost to the public anywhere, and the illusory promise of a boom in convention business, luxury hotels and entertainment venues on every corner of downtown, tens of thousands of new jobs, millions of tourists throwing money at us.

Maybe, maybe not.

Guys like Phil Anschutz don’t get to be billionaires playing nice with suckers like city officials who wouldn’t have the price of a ticket to Lakers or NFL games if they weren’t on the public dole.

To this point, what he has put on the table provides him with a low-risk,high-profit deal for himself and a no-profit,high-risk deal for the city and its people.

If you think the people you elected are going to do anything to serve you and protect your interests between now and July 31 — AEG’s latest ultimatum deadline — you are living in a fantasyland. All your public servants see is the free tickets and the parties in the luxury boxes.

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18 Responses to AEG’s NFL Stadium: What’s In It For You and Me?

  1. AEG Business Plan: look for patsies says:

    Nicely done Ron. Keep at this. You have some great lines in this column that could easily be turned into TV ads. Roski could easily help marshall the forces of opposition by helping them get the word out about how much this deal stinks. LA doesn’t need AEG or Roski’s stadium, but one is infinitely better than the other.
    I cannot wait to participate in the City Council recall campaigns this winter.

  2. Anonymous says:

    Great job Ron. Why isn’t the media reporting this stuff. Nate Holden had a lot to say last night and it should be reported what he said. He was a council member when the Staples deal went down. The media should report there are 9 city council members who have received CAMPAIGN DONATIONS FROM AEG. I would bet Jan Perry is receiving campaign money for her Mayoral candidacy from AEG. How in the hell can they vote on this project and isn’t this a conflict of interest?

  3. Anonymous says:

    Ron, you are the best. Thank you.

  4. In Eagle Rock says:

    The history of these sorts of deals always seems to leave the elected officials blame-free when, often years later, the shortcomings materialize, or more accurately, the proceeds for the city fail to materialize.
    It seems to me that if these plans are so much of a great opportunity, then there should be a bigger participation in risk by the private sectory and minimal or no exposure by the city to any loss.
    Too often the benefits touted don’t result in much net gain for the city, with any profits going first to the developer or it’s successor.
    Overall, the CMs are just too comfortable with spending the public’s money as they have no personal stake in ensuring success, as would be the case if they were spending their own money.
    I think a big part of these things, unspoken of course, except for cases like Eli Broad, is that the officials want to leave aa their mark on society.
    Instead of working for the public, it’s always something that gets most of the discussions done on the backrooms and not open. Notice that there’s no limit to access granted to lobbyists, and generously so, especially done for large campaign contributors, I would surmise. With that kind of access to decision-makers compared to the limited time provided by public comment at or past the “done deal” stage, the public comes out short here, to my way of thinking.
    We see that very obviously with L.A. County Spvr. Gloria Molina’s self-centered use of accumulated millions of dollars in discretionary funds applied to a Latino cultural museum. The merit of a museum is not the issue, it’s the use of the public’s money for what should be financed by donations and other NON-public money. How many county services could have been improved or sustained with these same dollars? Silence on those expenditures is the norm.
    Until there’s something that will hit more people’s sensiblities or pocketbooks more seriously, the Council and their cronies will continue to slip these deals by and the city will continue to finance the deals, subject to what benefits city negotiators have included in th contracts. Past city-involved negotiations have never shown any keeness of skills, be it on the employee union contracts or development deals.
    A picture comes to mind on these deals where the city has bargained for the exclusive access to the sites for collecting empty cans and bottles for recycling redemption value. And our city benefits are of that proportion to the overall profits generated with each development.
    A better deal for the city might just be no deal in many cases. At this time, the bleak fiscal forecast does not justify any figurative betting on the roulette wheel for the big payday that council often finds an attraction, as prodded by developers.

  5. Anonymous says:

    This is a good test to see how the Mayoral candidates would govern.
    What do Garcetti, Perry, Greuel, Buetner, and caruso have to say about this deal?

  6. Sandy Sand says:

    The answer to why the local media — mostly TV where most people get their news spoon fed to them because it’s all bland pap — doesn’t cover these things is because it’s complicated; it’s hard work; it takes research; it’s boring; it’s not sexy.
    Crime, crime, crime and a few health and food stories are all you’ll get.
    Occasionally KNBC and KTTV will do a hard-hitting investigative report when they should be doing them every day.
    Local radio does do a pretty good job of covering these things.

  7. Anonymous says:

    The football stadium would not be a problem if city finances were not involved. If it is such a fantastic deal, let AEG reap the benefits and leave the taxpayers alone. Let them also suffer the losses if it does not pencil out. We can’t have projects where the private sector gets all the money and the taxpayer the losses. As for local media and other football cheerleaders, let them put down their own money. I’d rather have potholes filled and the police actually prevent crime rather than fulfulling their typical undertaker’s role.

  8. Anonymous says:

    There was a NC rep who said there was a guy named Brad Harris who had done research and studies on these stadium and concluded they do not help generate revenue. Lieweke played it off and make a joke about anyone who does research. Lieweke sounded as if this is already a done deal.IF council member give him his MOU by July 31st then it was a done deal. I agree any of the Mayoral Candidates who vote for this all need to be OUted and posted on every single blog. It will be the best reason why they should be elected.

  9. Jim says:

    I can’t take credit for this, I am re-posting a reader comment from Curbed:
    The real problem is what happens to the existing debt on the convention center.
    See this link:
    AEG has yet to put forward a plan that would shield the city from its existing liability under the old convention center deal.
    Ideally, AEG should be willing to just take the entire convention center off the hands of the City and County. Just repay the outstanding bonds and then go back to the capital markets for new debt.
    This would be guaranteed by AEG’s parent company (the corporate entity where the billionaire keeps all his money, not the bankruptcy-remote shell companies beneath it).
    Let the bankers, AEG and the NFL team owner take the risk of failure.
    If the deal falls apart in the future, the City can decide then if it wants to invest in picking up the pieces.
    At that point, it will be like a vulture-fund investor and get everything for a steep discount (because the City can get cheap financing which it should keep for itself rather than let AEG piggy-back of it for private profit).

  10. Anonymous says:

    Jim, you have the correct solution, now to
    get the city council to make that the way out of this hideous mess of managing our city. Thank

  11. Anonymous says:

    Dumb Ass Lieweke kept telling the crowd “can you imagine the revenue from a “Super Bowl?” What an idiot, the Lakers didn’t win a championship which goes to show you can’t count on that money. He also kept telling the crowd about the revenue from more hotels being built. A great question an NC rep asked was about the digital billboards. How is AEG getting away with having them on the Marriott which are HUGE? Lieweke is nothing more then a common thug threatening the City. Everyone I speak with say have the stadium built in City of Industry and leave LA alone.

  12. Anonymous says:

    FBI should examine the ties between the Mayor & AEG.

  13. Anonymous says:

    FBI, please start a dossier on Cardenas’ entanglements with AEG

  14. Anonymous says:

    Call Lieweke’s bluff and let him go somewhere else for a stadium – Guess what? He wants this stadium as part of the development AEG already owns such as Staples Center and LA Live.
    So LA could be in the driver’s seat. Believe it or not, there are actually a lot of intelligent people who work for the Controller and they could determine what is good for LA. That is of course without the political interference of the Mayor and Wendy Greuel.
    And if Lieweke can’t make a deal, let me try to build it elsewhere or get private financing and pay market value for land without any tax breaks.
    By having other Cities giving AEG the tax breaks, they can take the risk which historically favors the Stadium owner/operator/NFL team over the City.

  15. Anonymous says:

    Who in City’s administrative-brain-trust completed a basic cost-benefit-risk analysis? Hhhmmmmm?
    No one?
    What are the odds this “deal” is approved?
    Any bookies taking bets?

  16. Anonymous says:

    4:24 p.m., it is obvious that you don’t work for the city. It is not lack of intelligence that allow the Lieweckes of the world to consistently rip-off LA citizens. It is your corrupt politicians who place corrupt people like Michael Logrande, Bud Ovram etc, in- charge of crucial departments that will come up with justifications to allow corrupt developments to go-ahead.

  17. Anonymous says:

    Let’s not forget AEG Lieweke has donated $1,000′s of dollars to the Failure of a Mayor’s school plan. Any of the morons on council who vote YES on this risky deal which the CIty will end up holding the BAG should be tar and feathered. When they are out campaigning as they are now, ask them point blank why they would put LA in another bad situation. GARCETTI, PERRY, LABONGLE, HAHN. To the gangsters like Alarcon, Reyes, Cardenas, Huizar who have done nothing to help their own communities and are as dumb as they look have all been helped by AEG. There should be an investigation as to how many FREE tickets each council office has received. I heard Public Works has received 1,000′s of free tickets more recently for the NBA All Star game.

  18. Anonymous says:

    LA already has the Sports Arena or the Pasadena Rose Bowl. We do not need another stadium. The area is already overly conjested in the middle of the Pico-Union district.

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