State may delay USC deal on Los Angeles Coliseum

The state appeared to be ready to put the brakes on the Los Angeles Memorial Coliseum Commission’s proposed lease deal with USC on Wednesday, the same day the panel posted losses of more than $7 million since 2009.

An emissary of Gov. Jerry Brown, making an unusual appearance to discuss the subject Wednesday in Los Angeles, said state officials want to be satisfied that the deal is the best one possible for the taxpayers who own the venue. She said the state was disinclined to rush an agreement to meet the Coliseum’s requested deadline for action by the end of June.

“The state won’t be rubber-stamping … what the commission has negotiated or agreed to. We’ve identified some concerns,” such as control of the property’s revenue-rich parking lots, said Anna M. Caballero, Brown’s secretary of the State and Consumer Services Agency and the governor’s point person on the Coliseum issue.

She spoke at a monthly meeting at the California Science Center, the state agency that owns the land under the Coliseum. The 88-year-old stadium is jointly held by the state, county and city.


Later in the day, the Coliseum Commission released financial statements showing losses of $2.4 million in fiscal 2009-10 and $4.8 million the next year. Late last year, Commission President David Israel disputed Times reports that the Coliseum was losing money.

An independent auditor attributed the steepest losses to the departure of rave concerts after the 2010 death of 15-year-old Sasha Rodriguez, who overdosed at a Coliseum rave; unexpected legal and consulting expenses; underestimated insurance and depreciation costs; and the discovery that assets were missing.

Negotiated in the wake of a corruption scandal at the Coliseum, the proposed lease would surrender day-to-day control of the property to USC. The private university has promised to invest $70 million to renovate the dilapidated stadium in return for the right to run it for 99 years and control its revenue. Outside experts have called the deal extraordinary, saying USC would reap most of the benefit.

In an interview, Caballero said taxpayers must also benefit from any arrangement the state approves. Proceeds from the Coliseum aid the free state-run museums at Exposition Park, such as the California African American Museum and the Science Center, which will soon receive the retired space shuttle Endeavour to put on exhibit.

The museums and Exposition Park are jewels of their South Los Angeles neighborhood, one of the city’s poorest.

“The proposals ask for 99 years…. We want to make sure whatever we sign off on … is valid and can work in 99 years,” said Caballero, a former mayor of Salinas and a former assemblywoman.

She said she believed the June 30 deadline was based on the Coliseum’s precarious financial position.

USC and the Coliseum Commission — a nine-member panel with state, county and city representatives — have been negotiating since September. Now, the university needs the state’s Science Center board to sign off on concessions it wants to complete a deal: the length of the agreement, a pledge to support the lease even if the Coliseum Commission goes bankrupt and control of six state-owned parking lots that surround the stadium.


Caballero said USC has told the state it would need additional parking if the Coliseum was improved and attendance increased. But she said the state, which takes in more than $4 million in annual parking revenue, needs to protect the museums. The proceeds pay for Exposition Park maintenance, lighting and security and assist the museums.

“The parking lots become the moving piece that’s really critical,” Caballero said.

Caballero said the Brown administration received a copy of the proposed lease in mid-April. She said state officials need more time to study it and to make sure deliberations are public. The Coliseum Commission’s lease discussions have been conducted largely behind closed doors, to the chagrin of open-government advocates and other experts.

Caballero said the state has hired an Oakland law firm, Goldfarb & Lipman, which represented Los Angeles in the Staples Center deal and the city of Santa Clara in its recent deal to build an NFL stadium, to help evaluate the Coliseum proposals. And she is reviewing an assessment of the lots’ value.


“We’re going to take the time we need to make sure we’ve got everything right,” she said. “This is an incredibly important public facility.”

Caballero said she doesn’t know what would happen if the Coliseum were unable to pay its $1 million annual rent to the state.

“That’s the million-dollar question,” she said. “What do they do? Do they file for bankruptcy? Or do they just not pay their bills?”

The Coliseum Commission is expected to vote on the lease at a special meeting May 14.