A couple of real estate plays masquerading as sports deals are reviving property values in a despondent area south of downtown Los Angeles called the Figueroa Corridor.
The Staples Arena, playground-to-be for hockey’s Kings and basketball’s Lakers and Clippers, is rising fast near the Convention Center. Planning has begun on an entertainment complex and hotel to be built on nearby land. And the activity has reawakened investor interest in nearby commercial and industrial properties that have fallen to half their values of a decade ago.
Now attention has shifted southward to the Coliseum and developer Edward Roski Jr.'s proposal to build a new stadium within the Coliseum’s walls for a National Football League expansion team.
Much more than sports is involved. A reinvigorated Coliseum would prompt development of adjacent land and would further support the museums and other attractions that are being built in Exposition Park.
If all works out as hoped, the result will be a glamorous centerpiece for Los Angeles and all of Southern California in the early years of the new century.
Indeed, it would represent a triumph of glamour, toughness, chutzpah and the ability of many interests to work together in supposedly disconnected Los Angeles.
The promised cash flows from sports attractions, from pre-sold seats and boxes at Staples Arena and from the more conjectural Coliseum stadium seat rentals have accomplished what conventional real estate economics could not. They have revived property values and interest in building along the Figueroa Corridor, which stretches south from downtown to Martin Luther King Boulevard.
Real estate values along the corridor have turned up in the last year, after two years of severe decline, according to HdL Coren & Cone, a research firm based in Diamond Bar.
Without the sports deals, the new enthusiasm would not have arisen. Based on present property rentals in the area, no one would have built, says consultant Larry Kosmont. The corridor illustrates why depressed areas of cities are so hard to revive. Property owners sit for years with declining values, constantly petitioning for tax reductions. With reduced taxes, cities balk at making improvements and fading areas only become sadder.
In the Figueroa Corridor decline threatened serious consequences. A few years ago, trustees of USC considered moving some or all of the school’s operations to Orange County. Orthopaedic Hospital considered moving, as did car dealers who saw their business hurt by unappealing surroundings.
So the school, the doctors and the businesspeople acted. They put up $160,000 to finance a study of ways the Figueroa area could be improved. Tree plantings and other beautification efforts on Figueroa and Flower streets are getting underway.
The California Science Center, African-American Museum and Natural History Museum have been opened or improved in Exposition Park.
The improvements were part of the glamorous backdrop that persuaded NFL owners and officials, who have bad-mouthed Los Angeles for years, to suddenly consider the Coliseum favorably.
At a recent NFL meeting in Kansas City, Roski gave the owners both “sizzle” and “steak.”
The sizzle was the glamour of Los Angeles, accentuated by the new Disney Hall, Staples Arena and adjoining entertainment complex that have yet to be built.
The meat was the vision of money. Hundreds of millions worth of infrastructure have already been built at public expense. The Coliseum is already there, and so are freeway offramps, streets and amenities. The cash flow from a stadium in Los Angeles will be greater than that of other cities, Roski told them, basing his claim on the pledges for Staples Arena.
Financing of the $357-million stadium would be by bonds underwritten by Merrill Lynch and paid for by stadium revenues, as well as $100 million in personal seat-license fees from well-padded football fans.
Does it all make economic sense? Sure, because economics ultimately is based on action and confidence. Roski outlined a classic real estate deal for the NFL. If they give an OK, he can raise money, build something and get other partners together to buy a team for almost $600 million.
He’s not alone in seeing the concept. The Coliseum is competing against bids from Houston and another local bid from Michael Ovitz and partners who envision building a stadium in Carson. An NFL decision is anticipated by mid-February.
But the NFL needs to come to Los Angeles and to go to Houston, too. The fact is, the NFL is a fading attraction. Television ratings for pro football games are declining. The league in recent years has moved its franchises to minor-league cities--Jacksonville, Fla., Nashville. It has losing teams in New York and Chicago. As anyone in Hollywood could tell it, the NFL is looking old.
A location near Hollywood glamour would help and, as Roski reminded the owners, the Coliseum’s history of two Olympics makes it perfect for future Super Bowls.
If the league stays away from Los Angeles, it will be the loser. But this city still will benefit from the unity that has produced the developments along the Figueroa Corridor.
And some personalities have come to the fore in these efforts: Councilman Mark Ridley-Thomas, who stuck to the Coliseum despite the scorn of football owners; developer and Recreation and Parks Commission head Steven Soboroff, who envisioned and backed many of the improvements in Exposition Park; and Roski, who stands to make one of the great real estate plays of all time if his Staples and Coliseum plans come to fruition.
Great cities need such qualities and such characters.