Wachs Unveils Initiative for Citywide Arena Vote

Blazing with provocative language, an anti-sports-arena initiative hit City Hall on Tuesday, loaded with provisions that the developers say could kill the proposed $250-million project in downtown Los Angeles.

The measure’s sponsor, Councilman Joel Wachs, announced on the City Hall steps that he had officially filed with the city clerk a proposed initiative requiring that a majority of voters approve any use of city funds or bonds for development, construction, remodeling or operation of “any professional sports facility.” The city intends to sell $70 million in municipal securities to help finance the project, designed to house the National Basketball Assn.’s Lakers and the National Hockey League’s Kings in an arena near the interchange of the Harbor and Santa Monica freeways.

“If this particular issue goes to a referendum, it makes this deal all but impossible,” said Tim Leiweke, president of the Kings, whose owners, Philip Anschutz and Edward Roski Jr., also are the arena developers.

“After we gave this guy [Wachs] everything he wanted, he’s going to go ahead and possibly delay this project for over a year and then we clearly go into intensive care, if not a death watch,” Leiweke said.

Wachs, a San Fernando Valley councilman who is the leading opponent of the arena deal, responded that “in every city in which a sports facility has been submitted to the voters, it has resulted in a better deal for the taxpayers.”

The councilman and his backers must collect 61,170 valid signatures by Dec. 24 to qualify the measure for the ballot. Unless Wachs asks the City Council to approve a special election on the question, the initiative would be part of the June 2, 1998, state primary. The council seems unlikely to approve a separate election. “A ‘stand-alone’ gets rather expensive,” City Clerk Mike Carey said. “It would run $2 million to $2.5 million.”

But Wachs’ proposal contains a poison pill that makes the election date irrelevant. It is a retroactive clause that would require a majority vote on the arena proposal even if the City Council approves it months before the initiative passes.

Mayor Richard Riordan, an arena backer, condemned the proposal. Vacationing in France, he said he “does not support this petition because, though it sounds virtuous, in reality it is ill-conceived,” according to spokeswoman Noelia Rodriguez.

But the administration’s leading advocate for the arena, Parks and Recreation Commission President Steven Soboroff, said he thinks the Wachs initiative probably will pass.

Although only about two dozen supporters stood with the councilman at City Hall, the implications of his action rippled throughout the city, the business community and the sports world:

* Kings President Leiweke said Wachs’ opposition “now potentially makes it impossible to do business with the city of Los Angeles.” In a preview of the kind of campaign the initiative could prompt, Leiweke charged that the city of Inglewood--now home to the Kings and Lakers--is behind the opposition to the downtown arena. As evidence, he cited the fact that Wachs’ campaign manager, Rick Taylor, has represented Inglewood politicians. Taylor said he was not working for Inglewood.

* Simply filing the initiative threatened the city’s ability to sell the project’s bonds, which would be repaid from various arena revenues.

“If the bonds are to be secured by revenues from the arena, then an initiative, I would think, would prevent the issuance of bonds,” said attorney Richard Jones, a municipal bond specialist with the Los Angeles law firm of O’Melveny & Myers. Another municipal bond expert, who asked not to be named, said an initiative “would complicate it. Whether or not it is fatal is up to the legal experts.”

Leiweke agreed. “We’ll never be able to get financing on this building until the referendum is passed,” he said.

* Arena backers said that if the initiative passes, it will encourage dissident politicians to seek a vote of the people on all public-private partnerships. Such deals include low-cost housing and major industrial and commercial projects, such as the Alameda Corridor, on which the government and railroads are cooperating in financing a high-speed freight line from the harbor to downtown Los Angeles.

“It’s a downhill bulldozer toward the end of public-private partnerships in the city,” Soboroff said.

The arena team’s anger stemmed as much from the Wachs proposal’s wording as the initiative itself.

A series of “findings and declarations” introducing the legal proposal amounted to a declaration of war. “There is no compelling need for taxpayer subsidies of professional sports facilities,” the initiative declares. “Los Angeles is one of the most lucrative sports markets in the world. The teams are controlled by billionaire and mega-millionaire owners and often pay multimillion-dollar salaries to their players. Moreover, their claims of public benefit often fail to occur, and the taxpayers wind up with losses, while the team owners pocket millions in windfall profits.”

The possibility of the developers’ moving the project out of Los Angeles, which has been raised by their supporters and representatives, was brushed off by Wachs and his backers. “I am not surprised they would do this,” said Councilwoman Rita Walters, whose district includes the project’s proposed site. “The whole negotiation has been characterized by ‘You do what we want or we’ll pick up our marbles and leave.’ ”

Leiweke noted that last week the arena team pledged to guarantee repayment of the city bonds and to disclose contract language assuring that the Lakers and Kings would remain in the arena for the 25 years needed to pay off the bonds.

“We gave them exactly what they wanted, exactly what they requested,” he said. “. . . Now what’s going on? They continue to redefine the policies and the process.”

Leiweke said he and his associates had consulted widely with local political and business leaders and that “people are beginning to realize the impact of this deal. This will change the way sports is done in this city forever. . . . The other thing that has to be brought up is that Joel Wachs has campaigned aggressively for the arts community. We have no problems with that. But how is it that all the funding he has generated for the arts community from public taxpayers’ dollars doesn’t fall under this scrutiny as well?”

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Times staff writers James Flanigan and Debora Vrana contributed to this story.