Santa Ana’s Westdome Bond Sale Is Approved

Santa Ana’s proposed Westdome sports arena cleared its first financial hurdle Tuesday after the California Debt Limit Allocation Committee approved $37.9 million in bond financing for the proposed 18,500-seat indoor stadium.

Sale of the industrial development bonds by the city, which is trying to snare a professional basketball team to play in the new arena, was approved unanimously, although state Treasurer Jesse Unruh joked that the authorization was being sought by “the people trying to take the Los Angeles Lakers out of Inglewood.”

The bond financing was approved on condition that the city sell them before Dec. 20. City Manager Robert C. Bobb said the City Council is expected to give final approval to the bond sale at its Dec. 16 meeting.

Council Approval Needed

According to Bobb, the developers can start marketing the tax-exempt bonds immediately, but the actual sale of bonds hinges on council approval. Bobb said he sees “no problem” with quick sale of the bonds.

“This is perhaps the most significant step in the entire process,” Bobb said, “because now the financing is in place, pending the approval of the City Council.”

Real estate broker Allan Durkovic, one of four partners in the private Westdome project, said after the vote that the group is confident it will get an NBA team before construction of the arena is completed.

Durkovic said his group, which recently paid the $100,000 application fee for an NBA franchise, is not trying to move the Lakers to Santa Ana. But he said the group is open to either an expansion team or a move by an existing franchise. Durkovic said he has spoken to management of the Los Angeles Clippers regarding possible relocation from the Los Angeles Sports Arena. “We’re keeping all our options open.”.

Deputy City Manager Rex Swanson said the city would have no liability for the bonds and the partners would have to repay the debts out of revenues from the stadium. “The city has no involvement in repaying that debt. It’s an entirely private issue,” he said, adding that he also expects there to be “no problems” in selling the bonds.

A feasibility study commissioned by the city estimated that the stadium, once fully operational, will generate annual retail sales in the area of about $28 million. While the acquisition of a professional basketball team is considered crucial to the project’s success, Durkovic pointed out that the partners will also have to seek other uses for the facility, which could include indoor soccer, concerts, hockey and circus shows.

Swanson said that state approval was by no means a foregone conclusion and that the city staff worked hard with the developers to put together a report showing that “it’s a real project and there is a commitment to make it work.” He echoed Bobb in stating that council approval of the bonds would be “fairly pro forma. “

The Westdome Partnership signed a preliminary agreement with the city in July and a final hearing on the project is expected in February or March, Bobb said. An environmental report is in progress and a first draft is due to be released next week.

The proposal calls for the arena to be built at the southwest corner of Flower Street and Civic Center Drive, where Santa Ana Stadium is now located. The city would raze the stadium, which is now used by high school and college football teams, at a cost of about $3 million and build a replacement stadium on a site not yet selected. The replacement stadium, in the $7-million range, would also be financed by industrial development bonds.

Save Our Stadium, a group supporting the plans for an arena but opposed to relocation of the stadium, has collected more than 5,000 signatures on petitions urging the city to consider other sites for Westdome. In addition, a developer proposing an office-hotel-retail project at MacArthur Boulevard and Main Street in Santa Ana has approached the city regarding the development of a stadium at that site. However, Bobb said the city is committed to the Westdome proposal and would stay on that course barring any problems with the environmental report or the financing.

Santa Ana is also proposing the construction of a 3,300-space parking structure next to the stadium, which would be financed by about $20 million in Civic Center Authority bonds. Bobb stressed that Westdome patrons would be able to use existing Civic Center parking that goes largely unused at night.

The city manager added that the parking structure is needed because of growth of the Civic Center area. “Even without the Westdome, we would have to build a parking structure to meet the demand,” he said.