L.A. Arena: Easy Part Is Over

The Los Angeles City Council did the easy part Wednesday by agreeing to continue its discussions on the proposed $200-million-plus, 20,000-seat sports arena adjacent to the Convention Center. Given the persistent tension between some council members and the mayor, who has enthusiastically supported the project from its earliest stages, approval of even Wednesday’s nonbinding agreement to negotiate was not a sure thing.

There is no question that the proposed development, which in addition to an arena for the Lakers and Kings sports teams would include a hotel, restaurants and retail space, would help revive the city’s degraded urban center. The project promises also to help the Convention Center, significantly enlarged and upgraded in recent years but still operating in the red and too often empty.

Now the city’s team of negotiators will have to work quickly and carefully to nail down the financial details of this ambitious plan by Oct. 15, a deadline agreed to last month by the city and the developers. Since those details probably will involve general-fund outlays as well as the granting of tax incentives, the plan will be a very tough sell among some city officials.

Many City Council members who voted Wednesday to move forward expressed legitimate concerns about the fiscal trade-offs posed by this project. Under the existing proposal, city officials estimate that Los Angeles would gain at least $1.5 million a year in tax revenues from the arena. At the same time, the project would cost taxpayers about $7 million a year for 25 years to pay off the bonds to finance the city’s share of the project. Where would the remaining $5.5 million a year come from? That’s a question that deserves a concrete answer, and continued council support may well hinge on it.