Before anyone signs off on the downtown NFL stadium complex, here's a little reminder of what city promises can cost long-term. As explained by Bloomberg's Chris Palmeri and Andy Fixmer, L.A. still pays $48 million in annual debt service on $417 million in outstanding bonds for the 1985 addition to the Convention Center - the project that was supposed to be self-supporting. Unfortunately, only $34.2 million in taxes are allocated to the center. That $14 million difference is paid by the city's general fund, which is about the last thing the general fund needs to pick up.
The cost came to light as the City Council is being asked to issue more debt for a $1.4 billion football stadium and convention center expansion. Anschutz Entertainment Group Inc., the company controlled by billionaire Philip Anschutz, wants to to tear down part of the convention center to make way for the stadium and build a new addition, paid for with $350 million in bonds sold by the city. "We stand by our commitment that this project will not cost the taxpayers or the city's general fund any money," Michael Roth, a spokesman for the company, said in an e-mail.
Writer D.J. Waldie has his doubts. From the KCET website:
Estimates by AEG's consultants are so rosy (naturally) that the Convention Center's current indebtedness could easily be paid off and the stadium would still make money for the city . . . except no one knows what kind of revenue sharing deal the NFL will extract from AEG to bring a team here or how much AEG will expect the city to backfill AEG's bottom line. And so the real costs to the city cannot be calculated and revenue assumptions are not even guesses.
Don't underestimate the ringleader for this costly and unnecessary project, AEG's Tim Leiweke, though the guy must be getting antsy. His original deadline for getting a deal from the city has long since passed, and now he's talking about a July 31 date for the city to commit to the project. Considering how business gets done at City Hall, that's not much time.