Advisor Praises Financing Plan for Coliseum

A city consultant on sports facilities has concluded that the method proposed for financing pro football’s return to the Coliseum makes sense and should be supported by local government, but his analysis deals only in passing with the huge--some say insurmountable--political obstacles that continue to loom large for the project.

“The progress made to date clearly positions the city to advance a very strong case to the NFL as well as to the city taxpayers in support of the new coliseum project and the return of professional football to Los Angeles,” Sam Katz, president of Pennsylvania-based EnterSport Capital Advisors and a financial advisor to the city, wrote in a letter analyzing the Coliseum financing proposal.

That proposal includes $61 million from a proposed state entertainment zone tax, which would siphon off sales taxes generated from the area around the Coliseum and use it to pay for improvements at the facility. Katz warned that that proposal represented “an uncertain and unreliable stream for debt service repayment,” but said it could be developed in such a way that would benefit all sides in the deal.

In an interview, Katz said the entertainment zone tax was heavily favored by NFL officials, who are looking for a way to help California cities pay for new sports stadiums.

In addition, he noted that the money generated by such a special tax would not be money that would be lost to the city, because it would not be collected unless football came back to the Coliseum under the terms of the proposed deal.

Still, others familiar with the deal say the politics of such an idea are dicey.

Why, many ask, would state legislators from far-flung parts of California be willing to dole out sales tax revenue to the Coliseum? And even if such a deal could be struck, would Los Angeles voters and council members back a proposal that requires public financing for a stadium?

In a letter to his colleagues, Councilman Mark Ridley-Thomas, the council’s most vocal supporter of the Coliseum project, tried to head off that concern by noting that while the proposal uses public and private money, it uses only so-called “incremental” revenues generated by the facility itself.