L.A. Stadium Debate Heats Up
As it waits for completion of negotiations to move forward on a downtown Los Angeles football stadium/convention center plan, AEG released findings of two studies showing the city could reap between $22 million and $41 million in tax revenue during the project’s first full year of operation in 2016.
Summaries of the studies, both paid for by AEG, were released July 20. The company and city officials were negotiating terms of a proposal to build the $1.3 billion event center adjacent to
The difference between the two revenue estimates hinges on increased bookings at an expanded Los Angeles Convention Center, with one study contending major convention bookings would jump from 24 in 2012 to 38 in 2016.
Consultant Bruce Baltin concluded hotel bookings from increased convention business would more than double by 2016 to 551,000 room nights. With the projected addition of 2,400 new hotel rooms and a convention center expansion to 500,000 square feet of contiguous exhibit space, an additional $175 million could be pumped into the local economy.
“The studies from these independent and well-respected economists confirm our belief that the Convention Center modernization and Farmers Field development will create tens of millions in tax revenues and a tremendous economic boost to the region,” AEG spokesman Michael Roth told the Los Angeles Times.
Not everyone is taking the findings at face value, however. City councilman Paul Krekorian told the Times he’d looked over the summary but intends to request the full reports, which have not been released, from AEG. Administrative officer Miguel Santana said the city would conduct its own economic analysis.
Councilman Bill Rosendahl, who co-chairs a committee tasked with evaluating the stadium deal, continues to play hardball over issues of transparency. And citizens group L.A. United took out a full-page ad in the Times July 19 saying the project is “not a good deal” and demanded city leaders seek a minimum annual revenue guarantee from AEG.
Rosendahl also pointed out that one beneficiary of a completed Farmers Field and convention center expansion would be the Ritz-Carlton hotel/condominium tower, adjacent to the J.W. Marriott at L.A. Live, which AEG recently bought out.
The residential project has been a tough sell in a soft market, and reportedly has been hit with millions of dollars in mechanics’ liens in recent months. As of July 19, only 32 of the building’s 224 condo units were sold – several to AEG executives.
“It’s in [AEG’s] best interest to make a deal with the city to get their initial investment in a stronger position,” Rosendahl said.
AEG’s proposal calls for Los Angeles to issue up to $300 million in bonds to finance the demolition and relocation of the convention center hall. AEG would ask the city to let it use stadium ground lease payments, new property tax revenue and money from its convention center signage rights to repay those bonds.