Council Endorses Deal to Build Sports Arena

The Los Angeles City Council, betting that a new sports arena will bring jobs and a long-sought resurgence to the ailing heart of the city, voted resoundingly Wednesday to pledge taxpayer funds and city property to help bring the privately owned and operated project to fruition.

The 13-2 vote, while not the last hurdle that the controversial project must clear before its private developers can break ground at the Convention Center site, in essence committed the city to the deal that had been negotiated for months with the arena developers--Kings hockey team owners Edward P. Roski and Philip Anschutz.

The lopsided vote also gave the developers, who are considering a competing proposal to build an arena in Inglewood, the assurances they wanted of broad political support in Los Angeles.

“They sent a clear message that they want to join with us to do something good for the city. . . . The strength of that [yes] vote was very important to us,” said developer representative John Semcken.

Under the proposal embraced by the council after a two-hour debate, the city would spend $70.5 million--and kick in another $20 million in city property--to provide the site for a 20,000-seat sports and entertainment complex to house the Kings and the basketball Lakers, ostensibly for at least 25 years. Developers are planning to build a $200-million, privately financed facility with 150 luxury boxes and 2,500 club seats that they expect to attract other sporting events and concerts throughout the year.

To help recover the taxpayers’ cost--averaging $6.8 million a year for 25 years to repay securities the city would issue for its part of the project--developers agreed to levy a ticket fee, a step they refused to take when serious negotiations first began last fall. City officials said they expect--but could not guarantee--that, with tax and parking revenues, the project would produce enough to at least cover the city’s costs.

Further, proponents--including the mayor’s office and a broad segment of the city’s business leaders--envision the arena, a stone’s throw from the junction of two of the nation’s busiest freeways, as an important first phase in a development that ultimately would include a large hotel, to be linked to the underbooked and heavily subsidized Convention Center, and a hive of sports- and entertainment-themed shops and restaurants. Supporters see the project as a chance to revive an impoverished, stagnant neighborhood, reinvigorate the entire downtown area and generate additional tax revenues to pay for more police, parks and other city services.

“We’re ecstatic,” said Carol Schatz of the Central City Assn., one of the downtown business leaders who pushed hard for the project. “This is an extraordinary opportunity for the city.”

But the debate that preceded the vote--and strenuous opposition of Councilmen Joel Wachs and Nate Holden--underscored some of the controversy involving the project.

“Each of you is slapping the taxpayers in the face, and they can see that,” Holden said. “Just wait till this ends up on the ballot, and you’ll see what they think of it.”

Holden alluded to an initiative drive launched recently for the competing site in Inglewood. Barry Fadem, the San Francisco attorney who wrote the initiative, has done work for Hollywood Park. Petitioners, including a homeowners activist well-known at City Hall, want voters to have the final say over any expenditure of city funds for the project.

Wachs, who has fought for revenue guarantees and has criticized the closed-door nature of the negotiations, said he wanted the arena but only if the city could cut a better deal for itself. While acknowledging that the deal has improved during negotiations, there are still “many ways that taxpayers could be left holding the bag,” Wachs said.

He moved to require developers to provide some backup money if city revenues fail to cover taxpayers’ costs. But his motion got only four votes after Council President John Ferraro warned colleagues that such a requirement would be a deal-breaker.

“Vote yes and you kill the project,” Ferraro said just before the council voted on the motion.

Several people close to the negotiations credited Ferraro for the strong vote. He acknowledged afterward that he had lobbied many of his colleagues.

“Downtown is the heart of Los Angeles, and if we let it die, the whole city dies too,” Ferraro said, adding that he believes that the “minimal” risks involved in the deal are “far outweighed” by its potential benefits.

Councilwoman Rita Walters, in whose 9th District the arena would lie, supported the project but objected to parts of it. She expressed dissatisfaction with the degree to which developers were willing to set aside jobs for women and minorities from the surrounding neighborhoods. And she objected to exceptions in the bans against advertising of alcohol, tobacco and firearms.

Councilman Mike Hernandez strongly supported the package after winning amendments to foster job-training programs for minorities and to help ensure that replacement homes are found in the same neighborhood for the about 900 people living in the 188 apartments to be razed to make way for the arena.

Inglewood officials said they were not discouraged by the Los Angeles City Council vote. They continue to negotiate with arena representatives, meeting with them as recently as last Friday, and expect to cobble together an agreement in the next two or three weeks.

“The negotiators have said before they are going to work on parallel courses with both cities, negotiate the best deal with each city, lay them side by side and make a choice,” Inglewood City Manager Paul Eckles said.

The Inglewood arena is proposed for 190 acres near Hollywood Park Racetrack and Casino. For $2 million a year, Inglewood would lease the land and turn it over to the developers for $1 a year. They would contribute $35 million to help build the $200-million arena.

Several steps remain before the Los Angeles deal can be finalized, including the writing of a detailed “memorandum of understanding, “ expected to come to the council in two to three weeks, and an environmental impact report, which could take two or three months more. Development agreements with the city and its Community Redevelopment Agency also must be executed, and residents must be relocated.

Developers had wanted to break ground by this fall and open the arena in September 1999. But as their mid-October target date to reach agreement with the city came and went, they said they would be hard pressed to meet the proposed opening date.

Times correspondent Deborah Belgum contributed to this story.