Coliseum Panel to Consider Pact to Lure NFL
At a closed-door meeting today, the Los Angeles Coliseum Commission will consider a contract giving real estate executive Edward Roski and a group of partners the exclusive rights to negotiate for a National Football League expansion franchise to play in the stadium, as well as the authority to rehabilitate and manage the aging facility.
According to a draft of the 16-page agreement--which was negotiated last week and is stamped “confidential”--New Coliseum Ventures, as the partnership is called, would enjoy exclusive rights for two years. If it failed to secure a franchise within that time, it would have an additional 24 months of financial guarantees. If, during that second period, an NFL expansion franchise or existing team moved into the Coliseum, the commission would have to pay Roski and his partners $5 million.
The draft of the contract does not say where the public agency would secure that sum should it become necessary.
Moreover, though the contract anticipates an expenditure of “$200 million or more” on a Coliseum renovation, with “a luxury seating concourse providing up to approximately 15,000 club seats and up to approximately 150 suites,” sources familiar with the negotiations said that only about $80 million of that will come from Roski and his partners. Roski is part owner of a separate venture that owns the Kings and is constructing the Staples Center downtown for the hockey team and the Lakers basketball team.
The balance of the renovation funds, the sources say, will be public subsidies in the form of Community Redevelopment Agency tax revenue, a CRA-funded parking structure, income from a ticket tax on all Coliseum events, and bonds issued against revenue from anticipated higher attendance.
John Semcken, executive vice president of the investment group, said that the total price tag on Coliseum renovations would be much higher than the figure in the draft contract and the public subsidy much less than sources indicated.
He said it will cost $350 million to rehabilitate the structure and an additional $500 million to $550 million to purchase an existing or expansion NFL team.
Nearly all of that money, he said, would come from private sources--the investment group’s capital, bank loans or private placement of bonds. Semcken said that only about $20 million would come from the CRA, and an additional $20 million from the self-imposed ticket tax.
The $5-million guarantee against the Coliseum making a deal with another group would probably be paid by any new team and not directly by the Coliseum Commission, Semcken said.
New Coliseum Ventures’ partners include attorney and professional soccer executive Allen Rothenberg, former Ticketmaster executive Fred Rosen and businessman Bill Burke, husband of Los Angeles County Supervisor and Coliseum Commissioner Yvonne Brathwaite Burke, who will not vote on the contract.
The Coliseum, which already has lost two NFL franchises, is said to be the venue that pro football owners find the least desirable in and around Los Angeles. The contract between Roski and the commission amounts to a last-ditch effort to shore up the antiquated stadium’s bid before the next NFL owners meeting this month.
But Semcken said that NFL owners view the Coliseum property favorably because there is political unity on locating a team there and the league wants to see a public/private partnership on any stadium deal.
The Coliseum Commission is a joint powers authority of the state, county and city governments. The proposed contract with Roski and his partners essentially is designed to give the group leverage to raise more private capital before the NFL owners meet Oct. 27 in Kansas City.
As The Times has reported, former Disney executive and super-agent Michael Ovitz is expected to pitch the owners his plan to secure an NFL franchise for the 78,000-seat stadium he proposes to build in Carson.
According to Coliseum Commission President Mike Roos, who helped negotiate the proposed contract with the Roski group, “it formalizes a relationship that has been growing since Ed Roski was the only person to step forward and say he would regain a professional football team for” Los Angeles. “And he has done herculean work to convince people that the Coliseum can regain its former glory.”
That sentiment was echoed by one participant in the negotiations, who added dryly, “It isn’t like there was anyone but Roski in line for this project. He’s all there is.”
Roos also defended the $5-million guarantee as necessary. “This is to cut some of Ed’s downside loss if he gets sandbagged by the NFL’s award of the franchise [in the Coliseum] to someone like Mike Ovitz,” Roos said.
However, at least two people familiar with the proposed contract expressed discomfort with it.
“The problem with this agreement is that it spells out what’s expected of the Coliseum Commission, but is devoid of any obligation on the part of Roski and his partners,” one source said. “They haven’t done much so far, and this agreement doesn’t appear to commit them to much more than raising money--if they can do that.”
“To be fair,” said another source familiar with the negotiations, “Roski and his partners are committed to kick in at least $86 million on the renovation of the Coliseum. On the other hand, over the next four years, Ed Roski could spend one single penny and if, for example, some other NFL team decides for its own reasons to move into the Coliseum, he collects $5 million on that 1 cent investment.”
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