Pact Starts Steps Toward Domed Arena

The four partners who hope to build a $35-million domed arena in Santa Ana have signed a preliminary agreement on the project with the city, but are still at least six months away from beginning construction, Santa Ana officials said Tuesday.

Under the agreement, Santa Ana will borrow about $3 million to raze Santa Ana Stadium to make way for the arena, to be known as the Westdome--but first the city will give residents a chance to air their concerns on such issues as traffic and noise.

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-------------------------------------------------------------------------- The partners--Allan Durkovic, a real estate broker; Donald Oliphant, general partner of Knott’s Berry Farm; Ronald McMahon, owner of an architectural firm, and Robert Osbrink, also a real estate broker--will next undertake a six-month environmental impact study, after which construction can theoretically begin.

Although the partners’ goal is to lure a National Basketball Assn. team to the arena, their prospects for doing so are regarded as uncertain.

McMahon said the agreement with the city is necessary to proceed with financial arrangements, plans and negotiations with the NBA. However, the agreement is only binding in that the four will lose a $10,000 security deposit if they back out, according to City Manager Robert Bobb, who added that the men have already spent about $300,000 on the project.

According to a feasibility study commissioned by the developers, failure of the new facility could result in a $3 million loss for the city within five years. Bobb said the city’s best method of ensuring success is in its right of “final approval over management.”

“Our biggest expense will be in costs to replace (the stadium),” he said. The city will obtain a loan to finance the improvements which would be repaid through profits from the project, he said, adding that the city is hoping to get about $600,000 beginning in the sixth year of operation. If the stadium failed and there were no profits, the repayment would have to come out of the general fund, he said.

The next step, said McMahon, is to consult with residents in the area. “We’ve got a lot of community relations work ahead of us,” he said.

Bobb said neighborhood meetings are planned for Tuesday, Wednesday and Thursday of next week to hear residents’ opinions. He said he did not think any road-widening or other construction would be necessary because the city’s traffic signal control system could handle any jams.

The developers said they feel Anaheim, which has gone as far as drawing up plans and renderings for an arena on the Anaheim Stadium parking lot, is now out of the running for an NBA team due to a lawsuit filed by the California Angels that has effectively tied up any construction there. “The first person who gets (an arena) up and operating will definitely have the upper hand,” said Durkovic.

Some Disagreement

Anaheim Councilwoman Miriam Kaywood disagreed, however. “I don’t see Anaheim out of the running at all,” she said. “Anaheim has the reputation and track record to be the No. 1 choice.” However, Deputy City Manager Ron Bates admitted that, since the lawsuit, the city has “not been aggressively pursuing it.”

Anaheim City Councilman Lew Overholt said a Santa Ana pro team would compete with Anaheim’s Convention Center and other entertainment offerings but would also generate business for its hotels.

“I don’t think it comes as any great surprise,” Overholt said of the Santa Ana plan, “because they’ve been talking about that for some time and it looks like it’s taking shape.”

Developer McMahon said attracting an NBA team--either an existing or an expansion franchise --is important, because it will draw other tenants and give the city some national exposure. However, he argued, the arena could still turn a profit by booking such events as concerts, conventions and boxing. He said the partnership is also hoping to attract an indoor soccer team.

According to the feasibility study, the proposed 18,500-seat facility, which would be southwest of Flower Street and Civic Center Drive, could generate about $55 million a year in retail sales activity and provide about 740 temporary and 100 permanent jobs.

Under the agreement, the city will construct a 3,300-space parking structure, which would be financed by $20 million in Civic Center Authority bonds. A replacement facility for the demolished football stadium would be financed by about $7 million in industrial development bonds.

Mayor Dan Griset said Santa Ana’s ownership of the property will make its development a smoother process. “Our principle advantage is control of the land,” he said. “Land economics can be so treacherous in Orange County.”