Optimism Voiced on Arena Deal

Emerging from a 2 1/2-hour closed-door Los Angeles City Council session on a proposed downtown sports arena, council President John Ferraro said Wednesday he was optimistic about the deal’s prospects but that it was unlikely it would be concluded and voted on before the first of the year.

“It’s been up and down today, but I’ve come to the conclusion that it can be done,” Ferraro said.

“It was a very healthy discussion. There were a lot of questions in the minds of members,” and a small number of sticking points remain, he said.

The wide-ranging discussion marked the first full council briefing on the deal since it was approved in concept in September and negotiations on a binding business deal began in earnest. The plan calls for spending taxpayer funds for land for a privately owned and operated arena that would house the Kings and Lakers.

Councilman Joel Wachs, one of two vocal council critics of the proposal, said he felt better about how things were going.

“There is no question that the deal is substantially better than it was,” he said, because the developers--Kings owners Edward P. Roski and Philip Anschutz--have made concessions aimed at covering taxpayers’ costs. But Wachs said he wants to be sure taxpayers are fully protected before he is willing to sign off on the deal.

Sources said arena developers have agreed to add a fee to tickets or other goods or services that would go to the city to reimburse taxpayers’ costs. Under the written offer submitted in August, the city would issue about $70 million in bonds to acquire and prepare land for the arena complex at the Los Angeles Convention Center. The developers would build the $200-million-plus facility and keep all the profits. The facilities fees mechanism is designed to bridge the gap between tax revenues from the arena and the annual bond repayment costs.

Other issues still on the table include who would pay for cleanup of any toxics found on the site, and when the developers could take title to parcels the city is buying next to the site of the arena.

Councilman Nate Holden said he remains adamantly opposed to the project.

“This is not something they could sell to me or to the public,” Holden said after the meeting. “There are too many loopholes, too many questions.”

Several other council members said they felt that city negotiators were on the right track and were confident that the deal will get a full public airing once negotiations are concluded.

“This is not a deal being cut in a smoke-filled back room,” Councilwoman Laura Chick said.

John Semcken, a key representative for arena developers, said he was surprised to learn Wednesday that most council members had not been kept apprised of negotiations. He said developers are eager to conclude the talks and have the details released.

“We are confident that after [council members] read it and understand it they will embrace it as a model for public-private partnerships,” Semcken said. “We gave them what they wanted. . . . This is a great deal for the city,” Semcken said.

The council will meet again on the arena proposal in one week. It was unclear when the negotiations would be concluded and a final document released publicly, but Ferraro said there will be sufficient time for public scrutiny and comment. The council voted Wednesday to authorize another $150,000 for private attorneys assisting with negotiations.

The council took some heat from constituents for getting their update in private, but officials defended their process as necessary to protect the city’s bargaining position.

The closed session followed a public hearing dominated by enthusiastic supporters of the project. About 50 people answered the Central City Assn.’s turnout call, among them labor leaders, community groups and business organizations.

Speaker after speaker urged the council to consummate the deal as soon as possible, saying the project would bring jobs to the area, spur a much-needed neighborhood turnaround, help put the underbooked Convention Center into the black and contribute to the city’s image and overall well-being.

“The return [on the taxpayers’ investment] far outweighs any cost that is involved,” said Carol E. Schatz, president of the association of downtown interests that has rallied support for the arena.

Gregory Vilkin, president of the Cleveland-based Forest City Properties, which built most of the residential high-rises in downtown Los Angeles, said that having 20,000 people coming downtown 200 nights a year would bring substantial new business to a neighborhood now largely shuttered after dark.

“We encourage you to make the best deal,” Vilkin told council members, “but, by all means, make the deal.”