Huddle up on AEG
For more than two years, Los Angeles city officials have been negotiating with Anschutz Entertainment Group to build a downtown stadium and bring a pro football team, or perhaps two, to the city. Now, with less than two weeks to go before the city is poised to give the project final environmental approval, the owner of AEG, Denver billionaire Phil Anschutz, has decided to unload the company.
That’s an unsettling turn of events, and before the City Council moves forward, it should demand a full explanation of the timing and ramifications of the sale, as well as assurances that the city’s interests will be protected.
Tuesday’s announcement that AEG is on the block took most city officials by surprise. Not all, however. Mayor Antonio Villaraigosa said he had been apprised of the possibility and was confident that it would not “affect plans for an NFL team to return to Los Angeles in the near future.” That’s all well and good for the mayor, but by keeping that information to himself, he denied other officials the opportunity to consider the implications of an ownership change. Villaraigosa’s decision to stay mum has infuriated some City Council members, who complained of being kept in the dark.
It is true that the contours of the stadium deal will remain largely unchanged by the sale of the company. If AEG’s new owner wants to build a football stadium, he or she must secure a team and live up to hundreds of terms agreed to with the city — terms that cover the full range of issues, including parking and traffic, community impact and a promise to pay a living wage to everyone who works at the facility. The city’s approval of the project depends on those commitments, and any owner who balked at them would be denied the opportunity to go forward.
Still, ownership matters. Will the new owner share the same vision for the project? Will he or she have experience building giant sports complexes? Will current management be kept in place or will it be replaced? Anschutz himself was never an appealing part of the package — he’s an aloof billionaire, and his insistence on owning part of any team in Los Angeles may have impeded the deal. But AEG’s management, led by CEO Tim Leiweke, has been responsible for building and operating Staples Center as well as L.A. Live, and the success of those projects helped reassure critics of the football proposal that the stadium would be built by a known entity with deep and sustaining interests in Los Angeles. That’s now in flux, though Leiweke has a long-term contract with AEG.
The City Council’s special stadium committee meets next week. Leiweke can use that meeting to remind the council that it retains the power to review the project’s financing plan, and that AEG is bound, under any owner, to the agreements it is preparing to strike with the city. But he also needs to explain why the city should approve an enormous and controversial project even if it doesn’t know who will ultimately be in charge of the company undertaking it. Los Angeles needs to know what it’s getting into.
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