Sixteen years after the NFL left Los Angeles, the City Council approved a preliminary agreement Tuesday for a $1.2 billion downtown stadium that developers hope will attract a professional football team.
Tim Leiweke, president and CEO of Anschutz Entertainment Group, said the council's 12-0 vote approving the framework for the project's funding and timeline sends a strong message to the NFL that the city is behind the proposal for a 75,000-seat stadium.
Under the memorandum of understanding, the city would issue $280 million in tax-exempt bonds to relocate the West Hall of the Convention Center to accommodate the stadium. The deal requires AEG to guarantee that no public money be used for the project.
"The deal we made is there to protect the taxpayers," said Council President Eric Garcetti. "This will give us a public face of Los Angeles worthy of the 21st century ... It's time for us to take the next brave step forward to bring football back to Los Angeles."
Leiweke said AEG and its owner, billionaire Philip Anschutz, hope to acquire an NFL team and host the first season at the Farmers Field stadium in 2016.
"It does not make sense for us to be only the landlord," Leiweke said. "We are looking at a model like Staples, where Mr. Anschutz has an interest in the teams."
To meet that deadline, Leiweke said, the company must begin construction by June 1, 2012. Anschutz is willing to spend up to $50 million on the environmental review and designs.
"He has agreed to allow us to go to design drawings," Leiweke said. "But we will not invest the $1 billion-plus for a stadium without a team.
NFL spokesman Brian McCarthy said the league is following the discussions in Los Angeles and "will continue to closely monitor all stadium developments."
City Councilwoman Jan Perry said the plan to replace the Convention Center hall with an expanded exhibition space will help Los Angeles become competitive with cities like San Diego and Anaheim.
"This allows us to leverage private investments to expand our municipal facilities," said Perry, who represents the downtown area and chairs the Ad Hoc Committee on the stadium project.
"Most importantly, this is about jobs. We will have 6,000 permanent jobs and 13,000 construction jobs."
Carol Schatz, president of the Civic Center Association, said 11 hotel operators have contacted her organization since the plans for the upgraded Convention Center were announced in February.
"We know there is interest in developing this area with hotels, nightclubs, restaurants," Schatz said. "All we need to do is get this project moving."
According to the AEG plan, the new hall would be built on Pico Boulevard before the West Hall is demolished to make way for the stadium. The developer also has agreed to build two parking structures that would serve the area.
Garcetti said the city is developing a new model for the NFL, with a stadium financed by investors who have no direct interest in a team.
"I think we have shown the NFL that they need Los Angeles more than Los Angeles needs the NFL," Garcetti said.
Officials have considered several previous proposals for returning football to Los Angeles over the years, including plans to upgrade the Memorial Coliseum. There also have been preliminary proposals for stadiums in Carson, Hollywood Park and the South Park area.
However, the most serious contender to AEG's plan is a proposal by Majestic Realty to build a stadium in the City of Industry.
Majestic Senior Vice President John Semcken argued their proposal is more financially sound than AEG's.
"Our stadium proposal will generate more money, jobs and long-term success for the region and the NFL," Semcken said. "We are more active than ever and are currently working with the league, owners and teams to bring a franchise back to Los Angeles."
Leiweke said he believes the downtown stadium is the best location, and that AEG would abort its plan if Majestic wins a team.
With the AEG agreement, Chief Legislative Analyst Gerry Miller, who headed the city's negotiation team, said all aspects of the deal remain open, including the expected rate of return.
"We have a certain assumption, but the developer will try to increase their rate of return," Miller said. "That's what developers do."
Another issue that will receive close attention is the design of the stadium and the improvements needed in the surrounding area.
"I am very concerned with what we will be doing to accommodate 65,000 to 75,000 people on a weekend," Perry said.
Councilman Bill Rosendahl, who had raised the most questions about the proposal, said he believed the MOU allows the city to be more aggressive in its relationship with AEG.
"I look forward as the process goes on and, with the idea, when we bring these teams in, the city can get something back from the television revenue," Rosendahl said. "The most important, critical part of this is the jobs. That part is the no-brainer. The more jobs we create the better."
Councilman Bernard Parks asked that the Los Angeles Memorial Coliseum be considered as a temporary home for any team that relocates to Los Angeles until Farmers Field opens in 2016.
Leiweke said they are looking at whether the Coliseum or the Rose Bowl could accommodate an NFL team.
He said that AEG will perform a full environmental impact report - with no exemptions from the California Environmental Quality Act - although it is seeking state legislation to protect it from frivolous lawsuits challenging the study.
Among the NFL teams who are known to be considering a move are the San Diego Chargers, Minnesota Vikings, Buffalo Bills and Jacksonville Jaguars. No announcement is expected until after this season.
The MOU is non-binding but provides a framework for the future discussions, which includes construction of the West Hall replacement first, a coordinated booking schedule and the requirement that a professional football team sign a long-term lease.
AEG wanted the MOU as a way to demonstrate to the NFL and team owners that there is political support for the project as it provides a rough outline of future agreements.
Miller said the next step for the city is for its working group of different agencies to develop the final agreements with AEG.