Keeping Arena Plan on Course

There is no doubt that the months of closed-door negotiations over the proposed sports arena have produced a much better deal for Los Angeles taxpayers than its backers initially outlined. The challenge now, as the City Council begins its review of the nearly completed financing agreement, will be to keep all the parties to this complex project on track through the spring, when the ink should be dry on the final contracts.

The planned new home for the Lakers and the Kings, the professional basketball and hockey teams, would replace Inglewood’s aging Forum. Backers expect the facility to also increase bookings at the city’s underused Convention Center, adjacent to the arena site. And because of the retail and commercial space planned as part of the project, many consider the arena a good bet to infuse new economic life into Los Angeles’ downtown.

These have been the hopes for the project from the beginning. Opponents’ warnings, expressed in a steady drumbeat of press conferences and statements since last summer, have centered on the risk that construction and operation of this $200-million complex might pose to the city’s general fund. City Council members Joel Wachs and Nate Holden in particular have vigorously pressed for assurances that general fund services such as police and fire protection will not be jeopardized to fund a sports palace.

Their concerns have helped shape what appears to be a good deal for the city. Basically, developers would finance the entire cost of construction. The city’s costs would be limited to about $70 million to acquire and prepare the arena site. The city would raise this sum from existing bond revenue funds and by selling new municipal securities. It would repay that debt from tax revenues generated by commercial activity at the arena and from a fee that developers recently agreed to levy on arena tickets and then turn over to the city. As presented, this plan would be revenue-neutral for the city; it would draw nothing from the general fund, which pays for essential city services. Indeed, should the arena and subsequent development succeed in helping to revive downtown, the city’s coffers will be fatter and local residents will reap the benefits of new jobs.

The council is expected to begin today to review the agreement as presently written. Public hearings and a council vote will follow in coming weeks. Meanwhile, a few last issues remain unsettled: The city should continue to press hard for guarantees that the sports teams would indeed play in the facility and that the developers have the resources to complete this ambitious and costly deal.

The existing agreement does not legally bind any party, and council approval would only move the project toward another set of hurdles. The project would require a formal environmental impact review and a conditional use permit, and construction wouldn’t begin until binding contractual documents were approved by the team owners, the city and the developer.

In short, there are still many chances for this project to fall apart. As it shapes up now, that would be a missed opportunity of monumental proportions. Those who still oppose the arena deal note that much uncertainty remains: Will people go downtown for a game or a concert in the facility? Will arena visitors shop or eat out nearby before or after events? Will an arena generate business for the Convention Center?

Certainly those questions are real. But the largest uncertainty by far is whether the council has the political will to grab hold of a project that offers far more than sports to the city.