Anaheim to Enter Talks on Major Arena to Lure NBA

The Anaheim City Council voted Tuesday to begin exclusive negotiations on a proposed $50-million basketball arena in partnership with the Ogden Corp. and Nederlander organization.

The 90-day agreement, scheduled to go into effect within the month, is aimed at reaching final decisions on the proposed arena’s location, architecture and financing.

“We’re obviously very pleased,” said Neil Papiano, the Los Angeles attorney representing the partnership. Ogden manages five arenas where National Basketball Assn. teams play, including the Los Angeles Forum. Nederlander operates concert venues around the country, including the Pacific Amphitheatre in Costa Mesa, and books entertainment acts.

At the end of the 90 days, the city will decide whether to enter into a formal agreement with the developer to build and operate the 20,000-seat arena and two restaurants.

Tuesday’s vote did not commit the city to any binding action, Mayor Ben Bay said.

Papiano’s tentative proposal to the city was selected over three other investor groups, including Westdome Partnership of Santa Ana.

Westdome, whose plans for a sports arena in Santa Ana were killed by neighborhood opposition two years ago, had negotiated exclusively with Anaheim for an arena there. The city later invited other proposals.

“The Papiano group was selected based on their access to the concert market and . . . experience in arena operations,” City Manager Bob Simpson said in a prepared statement.

The two other investor groups were led by the owner of the Denver Nuggets and a former owner of the Phoenix Suns, according to a source close to the negotiations who is not affiliated with Anaheim.

City spokeswoman Sheri Erlewine refused to identify the other groups.

Papiano said that under his proposal, the city will own the land and arena facilities. All construction, land purchase and financing of the project would be paid by Papiano’s group, he added. The city will not have to provide any money but would receive half of the profits from the arena.

The city stands to gain “several million dollars” over the proposed 20-year agreement, Papiano said.

But nothing will be final for months, Erlewine cautioned, adding: “These are the kinds of details that have to be worked out.”

The arena could be used for hockey, soccer, indoor football, concerts, ice shows and other public events, Papiano and city officials said. But an NBA team is the main goal of the developers and city officials, and both said they hope the arena will lure one.

Papiano said he hopes to have an NBA team playing in Anaheim in the 1991 season.

He said he has talked with several existing NBA teams, as well as expansion teams, about relocating in Anaheim, but he would not elaborate.

“It’s a delicate situation,” he said.

The NBA will add expansion teams next year in Charlotte, N.C., and Miami, followed the year after by new teams in Orlando and Minneapolis.

Last year, the NBA rejected Anaheim’s bid for an expansion team.

Papiano and the city could find themselves in a Catch-22 situation in trying to attract a new team. The NBA says it wants a suitable arena built before considering locating a team here, and the city says it wants a team before it agrees to build the arena.

“That’s been our problem since day one,” Erlewine said. “We’ve been told the Orange County market is ripe for an NBA team.”

If no NBA team can be found for the arena, Papiano said, his group will still seek city approval for an arena.

“There’s a lot of uses for the arena,” he said. “Anaheim is a prime market area--if we can get enough (non-NBA) teams and others available, and we think they will be.”

But the city wants its basketball team.

“Anaheim’s bottom-line interest is getting an NBA franchise in this facility,” Erlewine said. They have to prove to us it can financially be feasible without the franchise.”

The major remaining hurdle to any project will be its location, Papiano and city officials agreed.

Four sites are being considered:

- The southwest corner of Tustin and La Palma avenues.

- A vacant lot in downtown Anaheim across from City Hall at Anaheim Boulevard and Broadway, former site of the Pickwick Hotel.

- Site of a proposed county jail, north of Katella Avenue and near the Orange Freeway.

- The northeast corner of State College Boulevard and Orangewood Avenue, near Anaheim Stadium.

The area near Anaheim Stadium would include use of the stadium’s parking lot, but any arena operator would have to schedule games and events around the California Angels and the Los Angeles Rams, city officials said.

The Rams and Angels organizations “would be kept up to date” on all discussions with any arena developer on a site location on stadium property, Erlewine said.