Downtown Arena Plan Gets Council’s Preliminary OK

Citing a chance to breathe new life into Los Angeles’ long-languishing downtown, the City Council on Wednesday gave preliminary approval to a proposal that would provide the owners of the Kings and Lakers with land for a sports arena complex near the Convention Center.

The council’s 11-1 vote--with Councilman Joel Wachs dissenting because of the cost to taxpayers for the privately owned and operated arena--came less than 24 hours after the Inglewood City Council voted to raise taxes as part of its own drive to keep the two teams in that city.

Backers of the Los Angeles arena, including the mayor’s office and downtown business and community leaders, exulted after Wednesday’s vote. They see the project as a rare opportunity to revitalize downtown, add jobs and tax revenues, improve the bottom line for the underbooked and heavily subsidized Convention Center and boost prospects for luring a National Football League team to Los Angeles.

“Inglewood will be waiting for us to stumble, but with this show of unity today, the council has sent a signal that this city will not stumble,” mayoral advisor Steven Soboroff said after the vote.

Several council members made it clear that their support for the project, as reflected in Wednesday’s vote for the nonbinding proposal submitted by the Kings’ owners, could vanish by the time a document committing the city to the deal comes before the council in mid-October. Several key details, including some that would more precisely pinpoint the risks and costs to city taxpayers, remain unresolved.

“If we can bring this off, there is no question it will be good for the city . . . but it depends on what you have to pay for it and what you’re going to get, and we don’t know that yet,” Councilman Marvin Braude said.

Emphasizing that the council can still call off the deal next month, Braude added, “The only question before us today is shall we continue talking [with the arena developers] or not?”

Under the proposal delivered by Kings co-owner Edward P. Roski last month after a year of quiet negotiations with the mayor’s office, the city would spend at least $60.5 million in bond revenues to provide and prepare the land, including tearing down the aging North Hall of the Convention Center. The arena developers would cover the cost of building the $200-million professional sports and entertainment complex and plan to add shops, restaurants and a hotel within a few years. They would keep the revenues, and the city would have to find ways to cover up to $7 million a year to repay the bonds. One possibility would be an increase in the city’s hotel tax.

The lopsided vote reflected little of the emerging undercurrent of controversy around the project, but some of the dissent was in evidence Wednesday.

At a City Hall press conference before the vote, state Sen. Tom Hayden (D-Santa Monica) called for the state’s anti-corruption panel to investigate Mayor Richard Riordan’s advocacy of the project, situated a mere block from Riordan’s downtown restaurant.

Hayden, a possible challenger to Riordan next year, urged the state Fair Political Practices Commission to investigate Riordan’s role in pushing privately and publicly for the arena before finally recusing himself last month from “official” action. The mayor cited state conflict-of-interest law, which prohibits a public policymaker from participating in decisions that are likely to have an impact on his or her property.

Riordan, a multimillionaire businessman with a thick investment portfolio, is part owner of the Original Pantry restaurant at 11th and Figueroa streets and the Fine Arts office building a few blocks away.

Riordan has continued to push for the arena project, citing his right to speak as a private citizen. Hayden accused the mayor Wednesday of taking advantage of “loopholes” and circumventing the intent of the law.

“What did the mayor do in his office since January of this year to promote a project that any reasonable person should have known he’d make a handsome profit from?” Hayden asked.

The mayor’s press office issued a statement that Riordan “has consistently and forthrightly disclosed his ownership” of the restaurant and “just as openly removed himself from official city decision-making regarding the arena prior to the developers coming forward with a specific proposal.

“The mayor,” the statement continued, “appropriately expressed his support for a job-creating, city-making project in the heart of Los Angeles.”

Hayden also cited environmental concerns--especially traffic jams and smog--and joined Wachs and others in questioning whether the project was worth the taxpayers’ investment.

Wachs acknowledged that some of the numbers he turned up in his own financial analysis of the deal were not completely accurate, but he stuck to his guns on his main point--that the cost to taxpayers would reach at least $200 million over the 25-year period needed to pay off the bonds.

City fiscal officials acknowledged that Wachs was right if he insisted in looking at the total cost to taxpayers instead of just the present value of the city’s share of the project costs, about $60 million to $70 million.

Councilman Nate Holden, who was out of town Wednesday, sent a letter outlining his opposition to the arena. Councilwoman Laura Chick was not in the council chambers when the vote was taken but had earlier voiced her support.

Tuesday night, the Inglewood City Council voted to raise three separate taxes aimed at visitors and sports fans to bring in $1.5 million a year to help fund a new arena there.

The measures would increase the hotel occupancy tax to 15% from 12%, double the parking lot tax to 10% and raise the sports ticket tax from its current 60 cents to 5% of the ticket price.

The taxes would take effect July 1 if the Kings owners choose to remain in Inglewood.

The Lakers have signed an agreement with the Kings to play their home games in the Kings’ new arena--wherever that may be--for at least 25 years.

Kings representative John Semcken said he was pleased with the council action but acknowledged that the owners also will continue discussions with Inglewood. He expects to deliver a written proposal to that city in another week or two.

Inglewood has offered to lease vacant land at Hollywood Park for $2 million a year and turn it over to arena builders for $1 a year to replace the Forum, where the two teams play now. The city also is offering developers up to $30 million in cash.

Assistant City Manager Norman Cravens said Inglewood this week further sweetened its offer, but he would not say how because the package has not yet been accepted. However, he reiterated his city’s contention that what it has to offer is at least as good as what Los Angeles can do.

“It is a typical David and Goliath” contest, Cravens said of his city’s competition with its massive neighbor. “But we believe we have by far the best site [with good] access from the freeway, transportation and fewer traffic problems.

“We have the ability to move faster to put a project together with less surprises. . . . I don’t think [Los Angeles officials] could have this arena done in three years if they started tomorrow.”

Times correspondent Deborah Belgum contributed to this story from Inglewood.

* THE SPIN: An independent audit of arena proposal is a good idea. B1

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Next steps:

* L.A. has 30 days to negotiate a final proposal.

* Final OK by mid-October makes deal binding, pending environmental reviews.

* Inglewood has a competing plan within two weeks.