L.A. Farmers Stadium: Why Does L.A. Have to Help Get a Loan for a Rich Corporation That Would Own This Thing?
Anchutz Entertainment Group developed Staples Center and LA Live and now wants a crown achievement next door -- a roughly $1.5 billion NFL stadium that already has a name, Farmers Field.
A mock up of AEG's 'Farmers Field.'
Many folks, including Mayor Antonio Villaraigosa, billionaire Eli Broad and former Mayor Jim Hahn, seem almost giddy at the prospect.
But it would require your land -- part of the L.A. Convention Center -- and about $350 million in public bonds that AEG has vowed to guarantee with its own cash.
In other words, AEG chief Tim Leiweke has said repeatedly, if revenues from the stadium and expanded Convention Center don't pay off that bill, it will.
Cool.
But our commenter of the day, anonymous, has a fair question. Why does AEG, a company controlled by a billionaire, one that takes in hundreds of millions in revenues, need the help of a cash strapped city to float bonds (which means, essentially, to get a loan on the city's credit, with good rates)?
It's like, you're going to build a stadium in our backyard? Okay, could be an improvement. You're going to make some money, possibly, but it'll be a nice thing for the neighborhood, and it could drum up our business too.
But you need us to take out a second mortgage for this thing too? But you're rich. You're guaranteeing that the mortgage will be paid and we won't be sleeping in an RV in Venice? Why don't you take out your own loan?
Anonymous:
"With interest rates at an all time low, why does AEG need the city to float the bonds? With the fiscal crisis that the city is facing, why are they even comtemplating backing municipal bonds?"
Fair question.
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