ANAHEIM : City Mulls Financing Arena Project Itself

Faced with increasing cost estimates for an indoor sports arena, officials are considering whether to finance the entire project with city funds instead of relying on the project’s private developer for financing, a councilman said Thursday.

In closed-door meetings Thursday, council members were briefed on the status of negotiations with the developer, Ogden Corp. of New York. The developer has informed the city that it will cost $94 million to build the 20,000-seat arena instead of the previously quoted $85 million.

Consequently, the city is weighing several options, including paying part of the $9-million increase or bringing in a new developer, Councilman William D. Ehrle said.

But if the city must pay a portion of construction costs, Ehrle said, “why not do the whole thing?”

“We could do that (finance arena construction) ourselves,” Ehrle said. “We have the bond-raising (capability). It’s something I’m going to consider.”

“It’s not like we haven’t done it before,” he said, referring to the city-built Anaheim Stadium and Convention Center.

Ogden officials could not be reached for comment Thursday. Los Angeles attorney Neil Papiano, who has represented Ogden, also did not return telephone calls.

How this development affects Anaheim’s race to build an arena before a nearly identical one goes up in Santa Ana was unclear Thursday. Both cities hope to attract professional hockey or basketball franchises.

A change in financing may force Anaheim to begin anew the environmental review of the arena, further delaying the project, according to attorney William D. Ross.

Ross represents Anaheim Stadium Associates, which along with the Los Angeles Rams and a mobile home park, have challenged the arena environmental review and have temporarily blocked construction.

Under a tentative agreement, Ogden is to arrange financing for arena construction, then operate the facility for the city. The plan also calls for the city to provide the land, which so far has cost Anaheim $20 million.

Asked if the revised estimate may be a sign that Ogden wants out of the project, Ehrle said, “Not necessarily.”

“I think they wish the project could have moved along faster,” he said. “But to say they want to pull tent, I don’t think that’s true.”

If Ogden were to drop out, Anaheim could proceed on its own or with another developer, Ehrle said.