Council Orders Parts of Arena Lease Disclosed

The Los Angeles City Council on Tuesday ordered developers of the proposed downtown sports arena to make public portions of their lease agreement with the Los Angeles Lakers, but left attorneys involved in the project free to determine which segments are “relevant” and which are “proprietary” and can remain secret.

Officials did not immediately disclose the documents, but Deputy City Atty. Patricia Tubert, who has seen the lease, said they do not require the Lakers to play for a quarter-century in the proposed arena, as previously promised.

Rather, Tubert said, the agreement between the Lakers and the owners of hockey’s Los Angeles Kings--who plan to build the $240-million arena--gives the developer an option to force the tenant teams to play there for 25 years; a separate agreement between the city and the developers, Tubert said, would demand that the arena landlords exercise that option and require the Lakers and Kings to stay.

“We need to see what that commitment is, and whether it is enforceable,” she said.

The key question is whether the city’s agreement with the developers can legally address provisions of the lease. That may depend, in part, on how the lease is worded and what the penalties are for breach of contract.

Although lawmakers ultimately voted unanimously to demand the documents, the council had a lengthy debate on questions crucial to the operation of local government: Can cities comply with statutes requiring public participation while pursuing business deals with private companies?

“There are a whole lot of things we can’t do except in partnership with the private sector--with that comes some constraints,” argued Councilwoman Ruth Galanter, who eventually voted for disclosure despite her concerns. “A lot of public disclosure things inadvertently wind up wrecking things. . . . We can’t go around abusing their rights to keep things confidential if we want them to keep doing business with us.”

Councilman Joel Wachs, who sponsored the motion urging public release of the documents, disagreed.

“If they want public money, they have to play by our rules . . . we’ve got to play by the public’s rules,” said Wachs, who has been the leading opponent of the arena project. “It is a litmus test of good government. It is a litmus test of honest and open public discourse.”

Despite the unanimous vote, it remains unclear exactly what will be made public, and when.

Wachs’ motion demands “that all relevant agreements (excluding proprietary information) between the [Lakers, Kings and developers], including the agreement which governs the terms and conditions under which the teams will play in the arena, and any guarantees thereof, be made public before the City Council makes a binding decision regarding the city’s obligations.”

In an interview after the meeting, Wachs said he believes that means that the full lease agreement, as well as other documents, will be released, with only items that would reveal protected “trade secrets” blacked out. Other lawmakers, however, said they supported the motion only because they believed there would be a narrow reading of “relevant” portions--perhaps only the specific language regarding the length and terms of the lease--and the rest would simply be summarized.

George Mihlsten, an attorney for the developers, said he will work with Tubert to “disclose in redacted form all the relevant provisions” and provide a summary of the remainder of the contract. Asked what is relevant, Mihlsten said, “That’s for us to work out.” He added: “The most relevant provisions are the commitments for the Lakers and the Kings to play in the arena for 25 years.”

But Wachs and Councilman Mike Feuer pointed out that other provisions--such as the penalties for breaking the agreement and whether a breach of one provision nullifies the entire deal--are equally important for lawmakers, and the public, to review.

“You can have agreements that can’t be broken but provide for a penalty . . . the penalty is outweighed by benefits of leaving. What are the consequences of breaking it? Who gets to enforce the agreement?” Wachs asked. “We need all of it out on the table. You can’t make an analysis knowing bits and pieces of this. You can’t let someone tell you part of the story.”

Mihlsten also said that he saw no reason to provide the documents until the matter returns to the council at summer’s end, but Wachs said he wants to make sure they are available sooner.

Deputy City Atty. Tubert said the redacted agreement can be released “as soon as they [arena developers] give it to me.”

The council voted 11 to 3 in May to support in concept a proposal by the Kings’ owners to put a state-of-the-art hockey and basketball arena next to the Convention Center near South Park. The plan asks the city to issue $70 million worth of bonds to clear land for parking lots and other arena-related items.

Arena developers plan to return to the City Council for a formal binding vote in mid-September.

Wachs has been opposed to the taxpayer subsidy from the beginning. He introduced the motion calling for disclosure of the documents after Times columnist Bill Boyarsky wrote several articles questioning the secrecy shrouding the deal. The Times had requested the lease agreement and related documents under the California Public Records Act.

On Tuesday, Times attorney Karlene Goller was joined by a representative of the Society of Professional Journalists and the First Amendment Coalition in arguing that the lease falls under the Public Records Act and must be disclosed because the city’s negotiators have reviewed it and are using it in their discussions of the project.

“These documents are indeed, very clearly, public records, within the plain meaning of the Public Records Act--regardless of where they are kept,” Goller testified. “The act is quite clear that documents used to conduct city business are public records.”

The media representatives were joined by the Howard Jarvis Taxpayers’ Assn. and the Coalition for Community Rights--two groups that oppose the arena generally--in lobbying for Wachs’ motion.

“The taxpayers do not want to buy a pig in a poke,” said Kris Vosburgh of the Jarvis group. “ We want to know the full exposure of our tax dollars.”

Councilman Richard Alatorre was absent during Tuesday’s vote. Councilman Mark Ridley-Thomas, a key arena backer, spoke against the motion, but left the chamber before the vote was cast.

“Public policy pushed by the press may be OK in some instances,” Ridley-Thomas said. “I have great unreadiness in this instance.”

John Semcken, a spokesman for the arena developers, said after the meeting that the Kings’ owners would comply with the council’s request, in part because Lakers owner Jerry Buss had given the Kings permission to break their confidentiality agreement regarding the lease.

“We need to thank the Lakers,” he said. “If it were up to us, we would not be releasing these documents. If it were up to us, we’d be moving forward without any further controversy. In the spirit of the negotiations, we’re willing to compromise.”