SAN FRANCISCO — Anschutz Entertainment Group is pushing a $1 billion plan to build a football stadium and events center in downtown Los Angeles that could involve hundreds of millions of dollars of new debt and the retirement of outstanding bonds.
The company has put forward a proposal to build a privately funded 1.7-million-square-foot facility that would replace the West Hall of the Los Angeles Convention Center, and sit next to AEG’s own Staples Center.
Anschutz has proposed that Los Angles issue $350 million of bonds to pay for demolishing and rebuilding the West Hall and paying off outstanding debt tied to it, according to Michael Roth, a spokesman for AEG.
“We are saying the bonds will be paid back with the revenues generated from the new event center stadium we are building and any shortfall on that we will backstop,” Roth said.
Los Angeles still has $445 million of outstanding debt tied to three series of lease revenue bonds sold to fund the convention center. The final payment on the paper is due 2023, according to Natalie Brill, head of the city’s debt management office.
The entertainment group, which is a subsidiary of Anschutz Co., told city officials that tax revenue from the new stadium and the overall project would be used to pay for debt service.
AEG said the bonds would be similar to those used to build the Staples Center, where the National Basketball League’s Los Angles Lakers play.
“Any such project would have to be funded solely from new revenues associated with the project, must protect the city’s taxpayers and the city’s general fund, and must generate revenues above and beyond those currently generated by the site,” according to the report to the City Council from the Trade, Commerce, and Tourism Committee.
Council members were slated Wednesday to decide on whether to direct city staff to look into the AEG’s plan.
For the plan to move forward, Anschutz will likely have to submit to the city a formal proposal, an environmental impact report, and an independent financial and economic analysis.
The project would also expand the convention center’s South Hall by 90,000 square feet as a replacement for the demolished West Hall.
The plans are moving forward without any certainty that a National Football League team would play at the stadium. Los Angeles has been without an NFL team since the Raiders and Rams left in 1994.
Farmers Insurance Group has agreed to a $700 million, 30-year deal with AEG to name the proposed 68,000-seat stadium Farmers Field.
The $800 million stadium plan poses a threat to another privately financed stadium project in City of Industry, Calif., proposed by billionaire Ed Roski, chief executive of Majestic Realty Co. and one of the developers of the Staples Center. It is closer to starting construction.
Former Gov. Arnold Schwarzenegger signed an environmental exemption bill in 2009 that permits the construction of the 75,000-seat stadium 15 miles from Los Angeles.
Roski’s proposed 600-acre complex would include restaurants, retail shops, and live theatres. Sixty out of 84 registered voters in Industry approved $150 million of general obligation bond authority in 2009 to pay for infrastructure linked to the stadium.
AEG said the target date for the project to be up and running is fall 2015.
Los Angeles Mayor Antonio Villaraigosa said he has created a commission to advise him on the proposed stadium project. It includes former Gov. Gray Davis and Michael Lynton, CEO of Sony Pictures Entertainment.