AEG Worldwide, responding to Los Angeles officials, cut the amount of municipal bonds it wants the city to issue to build a convention center addition and make way for a proposed $1 billion football stadium.
AEG, the Los Angeles-based owner of the Staples Center arena, will ask the city to issue bonds in “the high $200 millions” instead of the $350 million first sought, Chief Executive Officer Tim Leiweke said at a town hall meeting yesterday. AEG would pay for and control two adjacent parking garages it previously wanted the city to finance.
“This city has done a pretty good job of making it clear - - there will be no cost to the city of these bonds,” Leiweke said.
The entertainment company, controlled by Denver billionaire Philip Anschutz, wants to attract at least one National Football League team to the second most-populous U.S. city, which lost the Raiders after the 1994 season. The company seeks to tear down part of the existing convention center to make room for the stadium, and build an addition nearby. Leiweke said for the first time AEG is prepared to pay for half of a new team.
The original $350 million bond proposal, intended to finance the parking structures and convention center addition, was projected to cost Los Angeles about $25 million in annual debt service, Miguel Santana, the city’s administrative officer, said in June 17 letter to Councilman Bill Rosendahl.
AEG is willing to sign contracts with the city to guarantee interest and principal payments on the reduced amount of municipal debt, Leiweke said.
Los Angeles taxpayers are still footing a $14 million annual bill on a 1985 convention center expansion that was supposed to be self-sufficient, according to Santana’s letter to the councilman.
“One of the keys to this is the quality of the guarantee,” said Greg Nelson, a retired aide to former councilman Joel Wachs, who negotiated the Staples Center deal.
Anschutz built and operates L.A. Live. The hotel, condo and entertainment complex is adjacent to the proposed stadium site and convention center, and next to Staples Center, where the Lakers basketball team plays.
Last month, he repurchased a stake in the hotel and condo portion from San Francisco-based fund manager MacFarlane Partners, resulting in a loss for investors including the California State Teachers’ Retirement System, according to Ricardo Duran, a Calstrs spokesman.
A panel of five council members has been holding hearings on the AEG proposal, with the next scheduled for June 30. AEG, based in Los Angeles, has given the city a July 31 deadline to approve the deal.