The Inglewood City Council on Tuesday unanimously approved a plan to build a $1.86-billion National Football League stadium in their municipality.
The vote proves nothing, except that money causes blindness.
In this case, the money includes the nearly $120,000 in campaign donations the stadium's developers have given to elected city officials since 2006. Mayor James T. Butts Jr., the project's chief municipal cheerleader, has received $90,000 from Hollywood Park Land Co., the project developer.
Then there's the siren call of the economic benefits the 80,000-seat stadium will supposedly bring to this city of 110,000 residents located at the edge of LAX. The council based its vote on assertions that the city would reap more than $25 million a year for its budget, and billions of dollars in economic growth, from the stadium.
These figures are pure conjecture at best, and deceptive at worst. It's proper to take a closer look at them, because Inglewood and its people seem to be blind -- perhaps willfully blind -- to how the numbers were conjured up. They also seem to be blind to what the developers will have gained from adding a stadium proposal to their project--even if the stadium is never built.
The likelihood of the stadium's being built remains highly questionable. Its main promoter, St. Louis Rams owner Stan Kroenke, has scarcely made it a secret that one rationale for the Inglewood proposal is to extract a new stadium from taxpayers in St. Louis. Using the empty NFL slot in Los Angeles as a threat to taxpayers around the country has become the NFL's favorite off-field game ever since the Rams and Raiders left L.A. two decades ago. What's new is that NFL owners like Kroenke don't even bother to pretend any more that Southern California is their No. 1 choice -- they virtually say outright that it's only a stalking horse.
Many other assumptions underlying the Inglewood stadium project are highly questionable. They just haven't been questioned by the City Council.
Let's start with the overall development plan, which is embodied in a project review slapped together for the council with suspect haste. Back in 2009, the report observes, the city approved a big development proposal by Hollywood Park Land Co. on the site of the old Hollywood Park racetrack and casino. The plan called for 2,995 residential units, a 300-room hotel, 620,000 square feet of retail space, 75,000 square feet of office space, and a refurbished casino.
In the course of adding the stadium to their proposal, the developers have managed to expand the original plan significantly. Now it includes not only the stadium, but also 890,000 square feet of retail and 780,000 square feet of office space -- a 44% increase in retail space and a tenfold expansion of the office complex. The residential portion will be pared back slightly, to only 2,500 units. It's possible that a change of this magnitude would require a whole new environmental impact study. Thanks to the council's vote, it won't get it.
That's because the council's action exempts the plan from the California Environmental Quality Act, or CEQA. Developers love getting that exemption, because it's worth millions in avoided regulation and litigation.
The CEQA exemption is also the first thing that makes a lie out of the city's claim that the stadium will be built at no cost to the public. There's a cost to the CEQA exemption, and it will be paid by local residents, who will have little chance to fight the traffic congestion, noise and air quality impacts a stadium would bring. (Not only that: Because the council adopted the plan on Tuesday, local residents won't get a separate vote on the project.) When the city studied an earlier stadium proposal in 1995, the new study admits, these impacts were judged to be "significant and unavoidable."
The new study poses the question, "Will any public money be used to build the stadium?" Its answer is "No."
This is highly misleading, as is shown only three sentences later. There the study admits that the developers will receive a "contingent reimbursement of public costs advanced...for public services and infrastructure." The deal calls for the reimbursement to come after the city earns $25 million a year from the stadium (if it ever does). But the study anticipates that all of those costs eventually will be reimbursed, with interest. That's public money, and it's being used to build the stadium, whether it's paid up front or later.
Among the "public costs" to be reimbursed are those of game day shuttles between public transit lines and the stadium, and police and fire protection for event-goers, "all implemented at no cost to taxpayers." Taxpayers may not notice that none of those services would be needed except for the stadium.
Other economic benefits cited by the city's report seem to be assembled largely out of wishful thinking. It says the proposal would create 22,600 full- and part-time jobs in the city and "economic output of $3.8 billion within the Inglewood economy" during construction. Some of that comes from the builders' purchases of goods and services and "household spending" by construction employees.
These figures seem based on the assumption that all those workers would live in the city and the spending would occur within the city limits. Is this plausible? Inglewood's population of 110,000 comprises perhaps 35,000 males of working age, the most likely candidates for construction jobs. Most already have jobs. The city hosts two Home Depots, it's true, but it's anybody's guess whether they'd be up to the task of providing all the girders, concrete, screws, and nails for a $1.86-billion stadium.
What if almost all the employees and construction purchases occur outside Inglewood's nine square miles? Then its share of the economic output wouldn't be $3.8 billion, but potentially zero. The same goes for the study's estimate of post-construction economic impacts from eight NFL games a year plus non-NFL events, which appear to assume that event-goers would wander around the city, spending money, instead of walking from their cars in the parking lot to their seats and back.
The important question is whether Kroenke is serious about building a stadium at all.
"The dirty little secret of stadium deals is that most of them don't pay their own way," observes Neil deMause, a writer who tracks such deals for his website Fieldofschemes.com. Kroenke's proposal to spend $1.86 billion for dubious revenue is a "huge, huge risk," deMause says.
Speculation that building a stadium in Inglewood makes financial sense is built on assumptions even wilder than the city's. The cost, deMause calculates, could be defrayed by $900 million in seat licenses, naming rights, and possibly a grant from the league, but that doesn't get Kroenke even to within $1 billion of his construction cost. There's an assumption that an L.A. team would be more valuable as a franchise than a St. Louis team, but why? In the NFL, team location has very little to do with its revenue, because most of its income derives from the league's national TV contract. Fans all over the country follow the Seattle Seahawks and Green Bay Packers because of their performance, not as home-town rooters.
Plainly, what's driving the Inglewood proposal -- and the second plan for an NFL stadium in Carson for the Oakland Raiders and San Diego Chargers -- isn't the lure of the fandom and glitz of the big Southern California market, but the need to scare taxpayers in St. Louis, Oakland and San Diego into ponying up for new stadiums. Almost everyone seems to know that, except the money-blinded Inglewood City Council.