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Arena Analysis Urges Council to Act Quickly

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TIMES STAFF WRITER

A city report on a proposal for a professional sports arena complex at the Los Angeles Convention Center says the city’s stake is comparable to the amounts put up by other municipalities and, citing tight deadlines and competition from Inglewood, urges the City Council to decide quickly.

The report, released Wednesday and written by two top city officials, acknowledges that some “financial details are still developing” and that some unresolved issues remain in other proposal provisions. But City Administrative Officer Keith Comrie and Chief Legislative Analyst Ron Deaton said they believe that “the most appropriate course of action for the council is to adopt the proposal in concept” and work out remaining issues in the several weeks before the proposal becomes a binding agreement.

The report provides the first detailed analysis of the proposal delivered last month--after a year of quiet negotiations--by Kings hockey team co-owner Edward P. Roski Jr. Using land provided and cleared by the city, the team owners would build a 20,000-seat arena that would be home to the Kings and the Lakers basketball team for at least 25 years.

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The cost to city taxpayers would be at least $60.5 million--about 25% of the total project cost--and up to another $10 million in case of escalating costs to buy the land and demolish structures, including the aging North Hall exhibition building at the city-owned Convention Center. In addition, the city would turn over some city-owned parcels, mainly remnants from previous street-widening work, whose value has yet to be determined. At the end of a $1-a-year, 55-year lease period, the North Hall land would revert to taxpayers, but the rest could be purchased by team owners for $1.

The developers would build a privately financed, privately operated $200-million complex that would include offices and restaurants. They hope to build an adjacent hotel and other restaurant and retail concerns within a few more years.

Taxpayers would not get a share of the profits, but supporters see the deal as an opportunity to add tax revenues to city coffers while giving an important boost to the city’s long-stagnant downtown.

There would be some other costs as well. The City Council on Wednesday voted 13 to 1 (with Councilman Nate Holden dissenting) to spend up to $75,000 on a private attorney to help sort out complex financing issues. The city would sell bonds to come up with its share of the project costs, and must be sure it sorts out the potential impact on outstanding bonds issued a few years ago to pay for the Convention Center expansion.

The report recommends spending $150,000 for private negotiations experts to help the city with the development of a memorandum of understanding, the binding agreement that arena developers want by Oct. 15. Until then, arena developers say, they will continue talks with neighboring Inglewood. That city, eager to keep the two teams that now play at the Forum, is offering not only free land at nearby Hollywood Park but up to $30 million in cash.

A special Los Angeles City Council panel will take up the arena proposal for the first time today in hopes of making a recommendation to present to the full council next week. Team owners say the land must be ready for groundbreaking by next September so they can open the arena in time for the 1999-2000 season.

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