Despite Concerns, Panel Sends Arena Proposal to Full Council

A key panel of city lawmakers on Thursday raised serious questions about the proposal to build a sports and entertainment complex at the Los Angeles Convention Center, but decided anyway to send the offer by professional sports team owners to the full City Council.

All five members of the city’s ad hoc arena proposal panel voiced concerns about details of a plan to spend up to $70.5 million in taxpayer money to help bring the Kings hockey team and Lakers basketball team to a new, privately owned and operated arena.

“When I heard about this, I first reacted with excitement,” Councilman Rudy Svorinich Jr. said, “but now some of my excitement has turned to concern.”

The concerns ranged from the size and location of the proposed complex--which, at 220 feet tall would tower over the 140-foot-high Convention Center--to how to cover the city’s costs of participating in the deal, up to $7 million a year for 25 years. Other issues included how to take care of the people whose homes or businesses would be razed to make way for the 20,000-seat arena and the adjacent shops, restaurants and hotel the builders would add later along Olympic Boulevard and Figueroa Street, and how to be sure even the poorest residents of the surrounding stagnant neighborhoods would benefit from the project.

Still another issue centered on what was meant by “entertainment” jobs, which account for 744 of the 843 positions the project is expected to add in the city. (Arena developers acknowledged at the meeting that it means everybody from National Basketball Assn. star Shaquille O’Neal, lured to the Lakers with a $120-million contract, to ticket-takers.)

Councilwoman Rita Walters, who heads the ad hoc panel and whose district includes the Convention Center, offered a series of amendments reflecting those concerns before the panel made its unanimous vote--the first official action since the proposal surfaced publicly last month after a year of quiet negotiations.

The proposal is expected to go to the full council Wednesday. If it is approved in concept there, city and arena negotiators will have until Oct. 15 to come to an agreement that would commit the city to the business deal, subject to required environmental and other reviews, Deputy City Atty. Patricia Tubert said.

It will be up to the council to answer the big question: Does the potential public benefit--new jobs and an opportunity to revitalize downtown and adjacent neighborhoods--warrant the substantial taxpayer investment?

The city would be obligated to spend $60.5 million to provide and clear land, to be raised by issuing bonds, plus a possible $10 million more on cost overruns. The developers would shoulder the cost of building and operating the $200-million arena complex and would reap all the profits from tickets, advertising, parking and food and merchandise sales.

Increased tax revenues would cover about $1.5 million of the city’s $7-million annual cost of paying off the bonds. The rest would have to come from increased taxes or from the funds used to provide parks, police and other city services.

Thursday’s question-riddled session was in contrast to the widespread enthusiasm that has heretofore surrounded the proposal, which was spearheaded by Mayor Richard Riordan’s office.

But attorney George Mihlsten, lead negotiator for the arena developers, said he was not concerned by the tone of the meeting. “They are asking the questions they ought to be asking,” Mihlsten said.

Arena developers also are considering a site in Inglewood, which is offering not only free land but also up to $30 million in cash.

Kings’ representative John Semcken, who attended Thursday’s session, said his big concern is having an arena that can open in fall 1999.

Noting that his bosses have two teams of consultants working simultaneously on the Inglewood and Los Angeles proposals, he added, “At some point soon we want to be able to switch from two paths to one.”