Birth Pains for an L.A. Arena : Despite concerns, the developing deal looks attractive

The Los Angeles City Council might vote this week on a detailed agreement for financing the sports arena proposed for a site adjacent to the Convention Center downtown. Ever since the council approved the project in concept last month, a city negotiating team has been closeted with arena developers in an effort to nail down the financial aspects of the intriguing project, which would include a 20,000-seat arena, adjacent offices, restaurants and retail space.

Meanwhile, two council members, Joel Wachs and Nate Holden, have gone out of their way to denounce the arena proposal as a loser. They commissioned opinion polls purporting to show public opposition to the project, which would provide a new home for the Laker basketball and the King hockey teams. The councilmen’s own back-of-the-envelope cost estimates have heightened the skepticism that greets any huge undertaking involving public funds. But this sideshow should not obscure the potential value of the project to the city at large and to downtown in particular.

The broad outlines of the deal have been known for some time: The city buys land and contributes land it already owns. The developers put up the money for everything else. The land is roughly 25% of the total project cost of about $310 million, and the city’s contribution would be capped at $70.5 million--taxpayers would not contribute more, regardless of cost overruns. Cities in which similar projects have been built in recent years have underwritten a far higher share of the cost.

Within that outline, however, is room for many arrangements to finance the city’s contribution, some better than others. Negotiations between the city and the developers now center on maximizing public political support for the project while maintaining the developers’ interests.

Certainly, commitment of scarce general fund revenue or the diversion of funds from vital municipal services like trash collection or the Police Department would be unwise. Far more acceptable to skittish City Council members and taxpayers would be the use of public funds generated by the arena, say tax money from ticket sales or on-site retail and restaurant operations.

However, resistance to this project is likely to persist even under a financial agreement highly advantageous to the public. Many residents are leery of any public subsidy, especially one for already profitable sports clubs like the Lakers and the Kings. Others fear that spending more public funds on projects downtown--the publicly funded Convention Center is running a big deficit, for instance--is throwing good money after bad.

Yet what is the alternative, do nothing and ensure that taxpayers will never get a good return on downtown land that should be more productive? There is no good alternative, and that’s why the project is attractive. The Lakers and Kings are proven draws, and the city’s financial commitment would be capped. At worst, the arena would be a new sports venue that is closer and more accessible for many fans than the outdated Forum in Inglewood. At best, the arena and its ancillary retail and restaurant development could enhance the outlook for the flagging Convention Center by staunching the taxpayer drain there and could energize redevelopment along Figueroa Street. No one else is standing in line to make that happen, and it should.