AEG asks for 6-month extension to woo NFL team to Los Angeles
With the clock running out on its proposal to build a pro football stadium in downtown Los Angeles, Anschutz Entertainment Group has appealed to the city for extra time to land a team and work on an alternative development in case the effort fails.
Citing progress in negotiations with the National Football League, AEG asked Monday for six more months to bring an NFL franchise to Los Angeles and start building Farmers Field stadium.
The fate of the request will depend in part on whether city officials believe AEG really is close to luring a team to town. For months they have been studying ways of financing an expansion of the aging Los Angeles Convention Center without the revenue that a new stadium would generate.
Under a 2012 agreement with the city, AEG has until Oct. 17 to sign a team. It promised to build Farmers Field, construct a $287-million wing for the Convention Center and demolish the obsolete West Hall.
Although AEG insisted it remained committed to wooing a football team, the announcement Monday suggested the company was seriously considering the possibility of expanding the Convention Center complex without a stadium. Under either scenario, if it gets the extension, AEG would still be a driving force in developing the area around its multibillion-dollar Staples Center and L.A. Live complex.
To sweeten its request for an extension, AEG has offered to begin planning a convention hotel with 750 or more rooms. City officials had already asked architects to propose upgrades for the Convention Center and identify a spot for a 1,000-room hotel, which would make the facility more competitive with other convention venues.
“We are not asking for more time lightly,†AEG Chief Executive Dan Beckerman said in a letter to Mayor Eric Garcetti and City Council members, “as we understand from your feedback that there are important objectives and principles underlying the project that need to be advanced without undue delay.â€
AEG did not offer details on its negotiations with the NFL but said any decisions on team relocations would happen during the next six months.
Eric Grubman, an NFL executive vice president, said the league was guardedly optimistic about its discussions with AEG and supported the company’s request for an extension of its agreement with the city.
“The discussions are very preliminary, but we are encouraged enough by recent progress that we share AEG’s view that continued conversations would be worthwhile,†he said in a statement. “An extension could well provide the time necessary for us and AEG to determine whether the downtown site can be considered by our membership during our next off-season period.â€
Garcetti, City Council President Herb Wesson and Councilman Curren Price, whose district includes the area, said they would support granting the extension.
Former Walt Disney Co. Chairman and Chief Executive Michael Eisner, who has advised Garcetti on the Convention Center and the NFL, said: “The financial impact of getting this done for the city is enormous. So patience is difficult, but warranted.
“I think the city would not give AEG an extension if they didn’t see progress being made — substantial progress being made,†he said. “AEG … has moved the ball a little further down the field, let’s say.â€
AEG, a giant international sports and music entertainment firm founded by Denver billionaire Philip Anschutz, owns the Los Angeles Kings hockey team and the L.A. Galaxy soccer team.
Its bid for an NFL team seemed promising two years ago in the flurry of enthusiasm over the proposed stadium, which included a multimillion-dollar commitment from Farmers Insurance for naming rights to the venue.
But by last spring, with negotiations between AEG and team owners apparently stalled, city officials announced they were preparing to give up on a stadium and take back control of developing the Convention Center site.
Many NFL insiders now consider a downtown stadium a long shot. What’s more likely is a stadium development in Inglewood, where St. Louis Rams owner Stan Kroenke has purchased 60 acres near the Forum.
Real estate developers often ask for extensions from the city, but AEG’s request faces widespread skepticism about the possibility of a football deal. Many city officials also feel they must quickly improve the Convention Center to help lure more convention business to Los Angeles.
The city had launched a design competition and narrowed it to three firms. It had been planning to award $200,000 to each finalist after AEG’s Oct. 17 deadline expired.
Now AEG says it would spend $600,000 on alternative design plans and reimburse the city up to $150,000 for costs connected to evaluating the competing plans.
AEG also promised to push for development of a hotel with at least 750 rooms on Olympic Boulevard next to a new Marriott hotel complex and across the street from the Ritz-Carlton and J.W. Marriott hotels at L.A. Live.
“We, as the developer and the land owner, think we’re uniquely situated to move forward a project expeditiously and successfully,†said Ted Fikre, chief legal and development officer at AEG.
L.A.’s Convention Center has long been a drag on the city’s budget, though AEG says it has turned around the performance since taking over management in December. More than $48 million in city hotel taxes help cover the yearly debt payments on the center’s South Hall, which opened in 1993.
Robert “Bud†Ovrom, executive director of the city’s Convention and Tourism Development Department, would not specifically discuss AEG’s latest request. But he noted that the city already struggled to book conventions because of uncertainty about the facility’s future.
“We’re anxious to see a decision made one way or the other,†he said. “From a marketing point of view, we need to get on with it.â€
The NFL, meanwhile, said it was not ruling out other potential stadium sites in the Los Angeles area.
The nation’s second-largest media market has been without an NFL franchise since the Raiders and Rams left after the 1994 season. In the 20 years since, more than a dozen stadium proposals have come and gone.
Rumblings of a return to L.A. have grown louder in recent months, with three franchises — the Oakland Raiders, San Diego Chargers and Rams — on year-to-year stadium leases for the first time, unhappy with their outdated venues and mulling relocation.
Both Garcetti and Wesson said they were willing to give AEG extra time to land a team.
“We’ve now brought negotiations between L.A. and the NFL further along than ever before, and combined with AEG’s experience transforming downtown with Staples Center, I support continuing the momentum with them,†Garcetti said in a statement.
Price said the city needed to keep all its options open when dealing with the Convention Center project. “I support an extension for AEG at this time because it would help Los Angeles make a better case for landing a team, ultimately allowing our city to score the ‘touchdown’ — with or without a team,†he said.
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