Quote:
Originally Posted by Sodha
I fully support the bond to re-build the West Hall. This would actually be a City expense, not AEG's, so why are they responsible?
Also, anybody critical to this investment needs to remember what downtown LA was like before AEG came in with Staples Center. 717 Olympic, Watermarke, Market Lofts, Evo, Luma, Elleven, Concerto, Panini cafe, Ralphs, El Cholo, Bottle Rock, Corkbar, Starbucks, Salon Elleven, Riordan's Tavern, Flower street lofts, etc... and that's just South Park! Yes, AEG did get some nice tax breaks on LA Live! (reduction of bed and parking tax), but look at what downtown gained in return! We actually have restaurants, housing, people WALKING the street. AEG was a huge contributor in our downtown of today. The first new residential high-rise in 20 years was Elleven in 2004....Staples opened in 1999. Coincidence? Sometimes you have to give a great developer some tax or bond breaks in order to get more in return. We back this $300 million bond, maybe we'll finally break ground on the Hard Rock Hotel (the big rumor across from JW Marriott), and a few more hotels in the area. I'd rather see this development here. This is downtown LA, not the freakin' bedroom communities like Industry.
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I was at SC in 1995, and frequented downtown for sports bars and the like. I also moved downtown and have lived downtown since 2005, before everything you listed, save for Flower Street Lofts, opened up. So I'm very familiar with the effect that Staples Center and LA Live have had on downtown, and they have been very positive. I agree with you on that.
However, Staples and LA Live are different than a football stadium, programatically. Staples has events on average of 210 days out of the year, and LA Live is open year round save for a couple of holidays. Farmers Field, in an aggressive - and I mean
aggressive estimate, might have 20-30 days of programming per year. While the positive effect of those days will be significant, the site will still be dark over 90% of the year - at the high end of my estimate. So the amount of permanent investment directly related to the building of the stadium (hotels, retail, residential development nearby) will be much more limited to, say a Streetcar, which will operate year-round.
Now, you make the argument that the rebuilding of the West Hall - which would be funded by $350 million in public bonds - is a City expense, and you are correct. It is. But that expense is necessary only to make room for the stadium. Without a stadium, there is no expense. The stadium is the reason for the expense. As it's currently proposed, the debt would be paid off by ticket taxes, and AEG would pick up any shortfalls. That's not a
terrible, but it's not a good one. If the ticket tax revenue will be that great, why not have AEG take out the loan, and get an exemption on ticket taxes for the period necessary to pay off the debt? This scenario would have a net effect for the City and AEG financially, save for fact that the City's credit rating doesn't take a hit from taking on $350 million in
new debt when it has a
single year budget deficit of $300-$400 million. The stadium gets built, the new West Hall gets built, the City gets all the tax revenue from activity around the stadium. This scenario is a much better deal for the City, and essentially a wash for AEG.
These are the kinds of deals the City should be fighting for. Like I said before, I'm in favor of the stadium, just not as it's currently configured. I think there are ways that benefit both parties without saddling the City with additional debt that it can't afford in the short term.