City Puts Proposed Downtown Arena on Fast Track

A proposal for a cutting edge professional sports and entertainment complex at the Los Angeles Convention Center hurtled onto the fast track Tuesday when two key City Council members embraced the $200-million-plus project and promised to help sell it at City Hall.

“We are pleased to report that we are very enthusiastic about the concept,” Council President John Ferraro and Councilwoman Rita Walters, whose district includes the proposed site south of downtown, said in a letter to their 13 colleagues. They added that they “believe that it will provide significant benefits to the city.”

The letter, released Tuesday with a 13-page written proposal from a venture headed by the owners of the Los Angeles Kings hockey team, places on the public table the deal that has been quietly negotiated for months.

The next step will be a detailed analysis of the Kings’ proposal by city administrators, who will present their findings to the City Council, which will be asked to approve the nonbinding plan in concept. The staff analysis will reach the council late next week, with council action anticipated within days afterward.

If conceptual approval is given, negotiations for a binding memorandum of understanding would begin, which both sides hope could be concluded within a month. The project would still be subject to environmental planning, zoning and other regulations that the city has promised to help the Kings’ owners expedite.

The action Tuesday signals an emerging political consensus that the team owners have said they need to proceed.

It also marks the gearing up of an effort by city officials to sell the plan to the public.

“I’m pleased to announce that we are moving forward with a concept that could turn the lights back on in downtown Los Angeles,” Walters said at a news conference with Ferraro at the Convention Center.

“We’re on our way,” Ferraro said, “but we have a long ways to go yet. There are a lot of details to be worked out.”

Chief Legislative Analyst Ronald Deaton, charged with steering the council through the detail work ahead, also attended the news conference.

One of those details is a proposal to increase the citywide hotel tax, now 14% of the cost of a room, to help pay off the city bonds that would help fund the project. Officials estimate that it would take about $6 million a year to repay the bonds, and they want to do so with taxes arising from food and souvenir sales, increased property values and other development-generated activities.

The proposal calls for the city to provide up to $70.5 million in bond proceeds to buy and clear the site, including the aging North Hall of the Convention Center near the intersection of the Harbor and Santa Monica freeways . Kings owners Edward P. Roski Jr. and Philip Anschutz have agreed to build a sports and entertainment complex that would be home to the Los Angeles Lakers basketball team as well as the Kings for at least 25 years.

The owners, who are calling their venture the L.A. Arena Co., want to begin construction on a new site--they now play at the Forum in Inglewood--by September 1997 and begin playing at the new arena in September 1999.

The owners had expressed concern that Los Angeles’ notoriously complicated bureaucracy and its often fractious political leadership could not deliver the land and the necessary approvals in time. They are continuing talks with Inglewood, which badly wants the new arena.

The proposal provides for future development by the arena company, including a hotel, restaurants, shops and other ventures on city-provided land next to the North Hall, which would be torn down for the arena. City leaders hope that the project will breathe life into a long-stagnant area. If the company does not build the other projects within seven years, the land will revert to the city.

“This is an investment, not a subsidy,” said Steven Soboroff, an unpaid senior advisor to Mayor Richard Riordan. Soboroff, a businessman who specializes in assembling sites for large retail chains, spearheaded talks with the team owners for nearly a year before word of the budding proposal began to surface in published reports earlier this summer.

Riordan, who views the project as the catalyst to revitalize a sagging downtown from Exposition Park to the south through Bunker Hill to the north, hailed the announcement.

On Friday, citing his part ownership in the Original Pantry restaurant next to the project site at 11th and Figueroa streets, as well as his interest in the Fine Arts Building a couple of blocks away, Riordan said he would take no part in official deliberations or actions regarding the project. State conflict-of-interest law requires that a public official with an economic interest in a matter over which he or she has some jurisdiction must refrain from participating in decisions about it and must notify other officials of the conflict.

Riordan said the law does not preclude him from advocating the project as a private citizen, and he intends to do so.

On Tuesday, Riordan joined 10 other civic leaders in signing a statement released by the Community Redevelopment Agency. In the statement, they praised the arena project as a sign that “a political will and unity now exist in the city,” which boosts prospects of bringing a professional football team to Los Angeles.

A spokesman for the state Fair Political Practices Commission said its legal staff is reviewing “the unusual situation” involving the Convention Center proposal, including whether Riordan can play any role at all. The spokesman would not elaborate. Earlier this month, the mayor signed a letter inviting the team owners to submit a proposal, but said it did not constitute any official action.

John Semcken, representing the arena company venture, said: “We are excited about the prospect of working with the city,” but added that the owners will continue working with Inglewood as the arena venture tries to consummate a deal with Los Angeles.

“We just want to make sure we negotiate the best deal we can,” Semcken said. “That does not necessarily mean picking the city that has the highest subsidy. It means picking the location that provides the most exciting opportunity for our complex and that will enable us to meet our time constraints.”

He added that the venture expects to submit a proposal to Inglewood within a few weeks.