The One Force that Could Block AEG’s L.A. Stadium Appears to be AEG

Wednesday, September 19, 2012
Architectural rendering of proposed downtown Farmers Field

The demise of redevelopment agencies in the state, and their lucrative source of taxpayer dollars, did not slow the momentum of Anschutz Entertainment Group’s (AEG) drive to build a new football stadium in downtown Los Angeles and bring a National Football League team to the city after a 17-year absence.

Special state legislation was put in place to allow the company to skirt environmental laws and fast-track the Farmers Field project. Community objections were beaten back in courts, commissions and councils, and project foes were wooed one by one. Last week, the Los Angeles Planning Commission unanimously approved plans for the $1.5 billion stadium, and the partial tear-down/reconfiguration of the city’s convention center. The city council is poised to vote on the proposal in nine days.

In the end, it appeared there remained just one force that could upend the inevitable. It was AEG, itself, which announced on Tuesday that it was up for sale. Its parent, Anschutz Co., is looking for someone to snap up the subsidiary and take over its holdings―which include the Staples Center, the Los Angeles Kings hockey team, the Los Angeles Galaxy soccer team, L.A. Live―and, presumably, continue development of the stadium.

At least, that’s what its supporters say. “I don't think this is a setback,” Councilwoman Jan Perry told the Los Angeles Times. Mayor Antonio Villaraigosa said he knew about the impending sale announcement, but didn’t think it would have any effect on the project.

The city is deeply involved in the project’s financing and would issue $391 million in bonds to pay for a new civic center hall after the old one is torn down to make way for the stadium. The city’s general fund would be on the hook for $268 million of that obligation, which would be repaid using taxes and stadium lease payments.

Even as speculation swirled that L.A.’s richest man, Patrick Soon-Shiong, was considering the purchase, and that NFL Commissioner Roger Goodell had a deal wired, not everyone was quite so certain about the ramifications of the multibillion-dollar sale.

“Clearly they have a strategy that right now is crystal clear to them but not in focus to the rest of us,” David Carter, executive vice president of USC's Sports Business Institute, told the Orange County Register.

–Ken Broder     


To Learn More:

AEG Sale May Jeopardize NFL's Return to L.A. (by Scott M. Reid, Orange County Register)

Owner of Staples Center and Los Angeles Kings Is Put up for Sale (by Walter Hamilton, Los Angeles Times)

Planning Commission Approves AEG's Proposed NFL Stadium in Downtown Los Angeles (by Dakota Smith, Los Angeles Daily News)

Leave a comment