L.A. Stadium Talks Begin

Negotiations by definition include some give and take, and AEG’s pitch to build a football stadium in downtown Los Angeles is no different.

A city council committee took up the company’s proposal for the first time April 18, with AEG asking for valuable development rights to city property and city negotiators wanting a 20- to 30-year commitment from any NFL team that may take up residence there.

A provision in the draft proposal presented by AEG would transfer development rights to a 2.4-acre parcel the city intended to use to expand its aging convention center. AEG agreed in 2001, when it made its deal with the city to build L.A. Live, to leave the parcel alone until 2021.

AEG now says the city no longer needs access to the parcel, which experts said could be developed into retail and office space worth millions of dollars to the company each year in leasing revenue, because a new convention center building would be built along with the 72,000-seat stadium it has proposed.

“If the city is not going to use it, then there’s no need to hold it for them,” AEG spokesman Michael Roth said of the parcel, stressing that the company would need to go through a formal entitlement process with the city to have anything built there.

The AEG-owned parcel’s only allowable use under the 2001 deal would be for a convention center expansion, something the city has not made any serious move toward constructing.

The potential giveaway of development rights to what’s become very valuable real estate to AEG has raised eyebrows, but would also speed up the process of improving convention facilities, which annually lose hundreds of events because of their age and size.

But another hitch could come from the NFL, still in the middle of labor negotiations and off-season lockout, and unable to take up the issue of team relocation or new franchises until that’s settled.

City officials and council members let it be known that it wants “hard and fast agreements” from any pro football franchise that it would not abandon a $1 billion stadium until any city debt related to the project is repaid, according to the Los Angeles Times. That would mean an NFL commitment for 20 to 30 years for the city to approve the project.

Convention Center work would be financed by $350 million in bonds. AEG has promised to make up any shortfall in new tax revenue needed to pay off the debt, but after the former L.A. Raiders and Rams left the city within months of each other in 1994, officials and fans are skittish.

L.A. legislative analyst Gerry Miller told the council committee that officials want to see contracts ensuring that and NFL team “will be staying as long as those bonds are outstanding,” according to the Times and calling it “one of the major issues” the project faces.
Preliminary negotiations on a stadium agreement are expected to take about three months.