The Santa Ana City Council chose downtown as the primary site for the proposed Westdome arena Monday night, reversing its earlier decision to leave the choice open.
Only Councilman Dan Young opposed the action, saying he couldn’t vote to “lock” the city into that location.
The council on Dec. 16 voted to approve $40 million in bonds, which was supposed to pay for an arena anywhere in the city. But bonds attorney Charles Adams told city officials that the Internal Revenue Service, which governs bonds, doesn’t allow that money to be shifted from one project site to another.
If the council switched sites later, it would have to get an IRS approval, City Atty. Edward Cooper said, and run a “substantial risk” of losing the project.
Young, voting against the Flower Street and Civic Center Drive site, reiterated that he was “very uncomfortable voting for financing specific to the downtown site.” But he stressed that he still might vote for it at a final hearing expected in March if a plan to protect neighborhoods from traffic, litter and noise can be worked out.
“I’ll be watching very closely to see what solutions are proposed,” he said.
Members of Save Our Stadium, a group opposed to the downtown site because it would require the demolition of Santa Ana Stadium, said they would begin collecting signatures to try to put the question to voters.
Monday’s council vote meant that, “Without any question, it has to be downtown,” said SOS spokesman Ron Heicke. He said his group would need 6,371 signatures of registered voters to get the issue on the ballot. “We’ll certainly go after that,” he said.
Some council members Monday stressed that they wanted a new arena in Santa Ana and that there still was an avenue for an alternative site, no matter how remote.
“If we do not take advantage of an opportunity this year, we may never have an opportunity of this kind,” Mayor Daniel E. Griset said, referring to pending federal legislation that might kill such bonds by removing their tax-exempt status.
Councilman Wilson Hart said his vote was “not intended to signify a readiness to vote final approval for a Westdome project in the downtown area. We’ve got a long way to go.”
But, he said: “If we don’t vote for this, it seems to me that the Westdome dies tonight, and I’m not prepared to do that.”
City Manager Robert C. Bobb said he will recommend studies of two other sites, at MacArthur Boulevard and Main Street and at MacArthur and Harbor boulevards, at a cost of about $71,000.
“We’re not locked into any site,” he said.
Change in Bonds
In another change approved Monday, the bonds will not be sold to private investors, as originally planned, until final approval. Instead, E.F. Hutton and Co. will buy the bonds and Dai-Ichi Kangyo Bank will act as a trustee, holding the money in an interest-bearing account pending a final vote.
If the council ultimately rejects the project, the $40 million would return to Hutton. The developers, the four-man Westdome Partnership, would lose an estimated $50,000 in administrative payments to Hutton and to a San Francisco legal firm handling the matter.
That’s a welcome change to the developers, who stood to lose about $1.2 million if the bonds were sold to investors and then the project was rejected, said partner Allan Durkovic. “It’s reduced our costs considerably,” he said.
The developers are proposing to begin construction of the 20,500-seat arena in April. The cornerstone of the project would be a professional basketball team, but no firm commitments for either an expansion team or relocation of an existing team have been reached. Durkovic said the arena could be built without such a commitment and would contain such activities as indoor soccer, ice shows, the circus and concerts.
Redevelopment project manager Robyn Simpson said the fancy financing footwork is necessary only because financing for the arena is being arranged before approval of the project itself, a reversal of the normal process. The bonds had to be approved and sold by today in order to avoid changes in federal laws that would remove their tax-exempt status.
“If we could have done it after project approval, there would have been no problems,” she said.