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Bill Rosendahl - Council District 11






Monday, April 18, 2011

Negotiating Principles

Holding a list of questions, Councilmember Bill Rosendahl attended the first Ad Hoc Stadium Committee meeting (official title here) this morning at City Hall. You probably heard about AEG and plans to build a football stadium/convention space on public land next to the Staples Center in downtown Los Angeles. AEG says it will not use taxpayer money to fund the project - yet the City would have to sell bonds as part of the deal.

In preparation for the meeting today, the Chief Legislative Analyst released a list of negotiating principles for the committee to review. Rosendahl's inquiring mind had some concerns - and some ideas for amending a few of the items. You can read each one below... and be sure to share your questions or concerns about the proposed deal.


Principle 1: The City's existing General Fund base will be fully protected.

Amendment: The City’s existing and future General Fund base will be fully protected.

Principle 2: There shall be no public money for the NFL Stadium.

Question: Does this mean that no public monies will be used for infrastructure improvements around the stadium and event center? I would like to be sure that is the case.

Amendment: There shall be no public money for the NFL Stadium or the downtown event center, and public money and will not be used to subsidize or incent the stadium and event center, or otherwise make infrastructure improvements that the City would not ordinarily make.

Principle 3: There must be substantial private funding to support any bonds issued to construct Pico Hall.

Question: What models for public-private partnerships are we looking at to determine whether the level of private funding is sufficient?

Question: This principle implies that, in addition to private funding to support the bonds, there should be some level of public funding to support the bonds. Why?

Principle 4: Any tax revenues used to support bonds issued to construct Pico Hall shall be from demonstrated net new tax revenues generated by the development and shall not come from existing General Fund revenues.

I do not agree that we should be supporting bonds at all with tax revenue, new or existing.

Principle 5: The amount of demonstrated net new tax revenues to the City used to support bonds issued to construct Pico Hall shall be no more than 50% of the net new General Fund tax revenues accruing to the City from the development.

Why should we sacrifice ANY net new tax revenues? What is the justification for that?

Principle 6: AEG shall fully guarantee, in a form satisfactory to the City, the debt service on the bonds used to construct the New Hall in the event that the revenues generated through numbers 3 and 5 above are insufficient to fully support the bonds.

Question: How can we be sure that the new AEG event center will not actually harm the business of the LACC? Might it not cannibalize the business and attract some events that might otherwise go to the LACC? How do we protect against those loses, quantify them, and get repaid for them?

Principle 7: The City shall retain fee ownership of the property on which the NFL stadium will be built. The property will be ground leased for a period not to exceed 55 years and the City shall receive fair compensation for the value of the ground lease.

Question: Who will determine the fair market value of the ground lease? Can someone give me an estimate of what the amount appears to be now?

Question: If the city retains ownership of the property, why shouldn’t we get a portion of the fees for naming rights for the stadium built on that property?

Amendment: Add an additional Principle, stating that “Due to the City’s ownership of the property on which the stadium is built, the City should receive a fair portion of the naming rights.”

Principle 8: AEG will work cooperatively with LACC and LA INC with regard to Convention Center bookings to mitigate, to the fullest extent possible, any disruption of service at the LACC. The New Hall will be substantially completed prior to the demolition of the West Hall. The West Hall shall not be taken out of service prior to the opening of the New Hall without the City's prior consent and such consent will be given only if scheduled events can be otherwise accommodated.

Question: What is meant by saying that the new hall shall be "substantially" completed before demolishing the West Hall?

Principle 9: AEG shall complete an Enviromental Impact Report (EIR) which shall fully analyze the impacts of the proposed development.

Question: As worded, does this allow the developer to complete an EIR while also obtaining legislative protection from any litigation regarding the adequacy of the EIR, thereby making the EIR meaningless?

Amendment: AEG shall complete an Environmental Impact Report (EIR) which shall fully analyze the impacts of the proposed development, and AEG shall not seek or receive legislation protection from litigation regarding the adequacy of the EIR.

Principle 10: AEG will implement a public benefits program.

I fully support this idea. In addition to concessions to organized labor, which I know is at the table, and local residents, who have a champion in Ms. Perry, I would also strongly suggest we press AEG to use sustainable design standards, maximize energy efficiency, and seek LEED certification.

Principle 11: AEG will provide assurances to the satisfaction of the City that teams that are contracted to play in the NFL stadium are committed to the stadium for a period sufficient to ensure that the City's investment in Pico Hall is protected.

Question: What are the ways through which the City can assure that teams are contracted with to play in the stadium "for a period of time sufficient to ensure that the City's investment in Pico Hall is protected?" Wouldn't that require a contract of enormous length?

Principle 12: The NFL stadium must include a roof and be designed in such a fashion as to provide viable additional event and exhibit space for the LACC, so that the total available event space at the LACC shall exceed 1 million square feet. AEG and the City will negotiate the terms though which the City shall have access to the stadium for event and exhibit space.

Question: Why are we focused on 1 million sq feet of exhibit space? While that is an improvement over what we have now, isn’t still a far cry from what we need to be truly competitive with other convention cities?

Question: Can someone name 2 or 3 events that might be willing to move from their current location to Los Angeles where space would be split between a traditional convention center and a football stadium?

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