Sports Arena Is a Winner for City and Taxpayers

Developers of the proposed sports arena have agreed to a new round of conditions and Los Angeles Councilmember Joel Wachs looks like a hero. Indeed, Wachs deserves much of the credit for making the deal to build a new home for the Lakers and Kings sports team enormously better for city taxpayers.

Now the hope is that Wachs means what he said Thursday when he announced he’s satisfied with the deal. The councilman said he would exempt the facility from a ballot measure he’s soon to file requiring voter approval for publicly subsidized sports stadiums.

Wachs’ support, and the additional concessions by the arena developers and city negotiators, make this deal an unqualified winner for the city as well as the sad Convention Center neighborhood where it will stand.

The developers, Edward Roski and Philip Anshutz, had earlier agreed to guarantee repayment of all municipal bonds used to help acquire and prepare the project site. They will also finance the entire cost of construction. What’s new is that the parties have agreed that no revenue from sales tax, property taxes or utility taxes generated by the project will go to repay that debt. However, the Community Redevelopment Agency will now kick in $12 million to help repay the city’s bond debt, money that could have gone to projects in other needy areas. Further, the developers have agreed to pay for one of the parcels the city had previously agreed to give to the developers and pay $3.2 million instead of $1 annually for the use of the arena site.

Assuming the council approves the deal later this month as expected, the developers intend to start construction by January to open the arena by their target date of October 1999.

But months of grandstanding by Wachs over the financing for this deal, the bitter feelings and the many times this important project nearly fell apart should teach us some important lessons for future projects:

* Secrecy doesn’t work. The initial agreements by the city and developers to keep terms of the deal confidential raised legitimate concerns in the public’s mind that it would be fleeced. Wachs was able to play on those fears.

* The city’s vituperative political culture does not encourage big or imaginative redevelopment projects. Despite tireless efforts by Council President John Ferraro to keep this project alive, Wachs was able to hold it hostage to his own mayoral ambitions. The end result may be better for taxpayers but the whole deal just as easily could have died altogether.

The sports arena should not be the last chance for Los Angeles to do a deal of this magnitude. Next time, let’s try to get it right from the start.