Monday, January 24, 2011
Updated: January 29, 1:26 PM ET
Two NFL visions of the same dream
By Arash Markazi
John Semcken has given this presentation so many times over the past two years the exact number escapes him. He's sitting in the Inverness Room on the second floor of the Pacific Palms Resort, a hotel and conference center complete with a four-star golf course in the City of Industry. A sign reading "NFL Presentation Room" is virtually permanently affixed outside the double doors of the windowless suite, which feature 16 colorful artist renderings and three detailed models of the NFL stadium Semcken and billionaire developer Ed Roski are trying to build down the road.
Semcken, a vice president in Roski's Majestic Realty Company, claims he has an answer for everything. He has been working with Roski to bring the NFL back to Los Angeles for the past 15 years and is prepared for any question the NFL may have.
Toward the end of his 45-minute PowerPoint presentation that feature more charts, graphs and polls than a political campaign, he is asked if he really thinks the NFL will return to a place called the "City of Industry," a location which is almost entirely industrial with a population of less than 1,000 people and over 2,500 businesses.
|Ed Roski and John Semcken have a plan for the City of Industry and the NFL.|
Semcken smiles and looks at Taylor Talt, a backup quarterback at USC in 2000 who is the stadium's project manager. "Should I tell him?" he asks Talt. "OK, I'll tell you."
"We're not going to call it the City of Industry, we're going to call it something else," Semcken said. "How about Grand Crossing, Calif. ... Diamond Hills, Calif. ... We don't know what we're going to call it yet but the city says they have no problem so it won't be called City of Industry."
The name has been somewhat of a mental roadblock when the group makes presentations to East Coast NFL types who might picture smokestacks and decrepit brick buildings when they hear a city called "Industry." It certainly wouldn't be the first time a name was invented for the land a stadium rests on. Jack Kent Cooke renamed the area around Jack Kent Cooke Stadium (now FedEx Field), Raljon, Md., by combining the names of his sons, Ralph and John, even though it remains part of Landover, a Maryland suburb of Washington, D.C.
That Semcken and Roski are passing the time these days thinking up new city names shows how far the group is with their project. Semcken points to the blueprints for the stadium sitting on a table in the center of the room.
"We are literally shovel-ready," Semcken said in an interview earlier this month. "There are the plans. Take a look. You want to see where the bathrooms go, or where you're going to plug in your computer or watch TV or whatever? It's all right there. We are ready to go. We could start grading the site and prepare it for the stadium the day after we got a team."
Ah, yes, a team.
About 20 miles west in downtown Los Angeles, Tim Leiweke looks out the window of his corner office overlooking L.A. Live. The Staples Center, Nokia Theatre and the 54-story JW Marriott and Ritz Carlton towers surrounding him have gone from visions to realities over the past 12 years under his watch as the president and CEO of the Anschutz Entertainment Group. (ESPNLA operates out of offices at L.A. Live.) He now wants to make another vision become a reality by tearing down the aging, disconnected west hall of the Los Angeles Convention Center to make way for a 64,000-seat retractable-roof stadium and events center (expandable to 78,000 for Super Bowls and Final Fours).
"The heart of our community has always been downtown L.A.," Leiweke said. "When you look at the Dodgers, Lakers, Kings, Clippers, USC basketball and football, they all play downtown. The Grammys, NBA and NHL All-Star Games, the Pac-10 tournament, major conventions; they all emanate from downtown Los Angeles. This is where the NFL and future events, like the Super Bowl and the Final Four, belong."
The idea to build a retractable-roof stadium -- which would be connected to the Los Angeles Convention Center and not only serve as the home of an NFL team or teams, but also major conventions, Final Fours and Super Bowls -- was first hatched by Casey Wasserman, the owner of the now defunct Los Angeles Avengers of the Arena Football League and the grandson of legendary movie mogul Lew Wasserman.
|AEG president Tim Leiweke believes his downtown proposal is the one that will attract an NFL team.|
Wasserman came up with the idea while driving around the West Hall about two years ago before a meeting with Leiweke. It seemed like the perfect solution in the perfect location to solve Los Angeles' age-old problem of financing an open-air football stadium that would be contractually obligated to host only 10 NFL games a year. If they could put a retractable roof on it and make it an events center, maybe Los Angeles could finally make the finances work and the city would be more supportive of a venue that hosts more than just football games.
"The fundamental value of a market [to NFL owners] is not based on its media size, it's based on the net value derived from the stadium," Wasserman said. "L.A. is unique in that it is a large media market where there's relatively less value from a stadium than in other places, given that L.A. is not dependent on having a team and California is not a state that has traditionally publically funded private enterprise. That's why two teams left and that's why there's not a team in L.A. Until you can figure out a way to privately finance a private enterprise that's compelling enough to attract an NFL team you're not going to have a team back here."
So how does Los Angeles attract a team back? And which stadium proposal has the best chance to do that?
|An architectural rendering of the AEG NFL stadium proposal in downtown Los Angeles.|
If you had to answer the question of why Los Angeles has been without an NFL team since 1995 with one word, it would be easy: financing. With no available public money and no NFL teams for sale, Los Angeles has had to find a way to privately finance a stadium that would generate enough money to make an NFL team happy while also being worthwhile to developers who may or may not have a stake in the team.
"The biggest hurdle has always been the financing of the stadium," said Eric Grubman, executive vice president of the NFL. "That has been a tough task, which has probably gotten tougher over the last five years. The reason it's gotten tougher is stadiums have gotten more expensive and because the willingness of the [player's] union to contribute [to the league's stadium-funding program] in a meaningful way has really declined over the years."
The rising cost of building stadiums also comes at a time when the NFL's G3 stadium fund dried up after the construction of the New Meadowlands Stadium and Cowboys Stadium. G3 loans were limited to $150 million per club, depending on their market and stadium cost, but the Meadowlands project received $300 million because the Giants and Jets share the stadium in a top-five television market. Los Angeles could conceivably be in line for a similar loan if the league's stadium-building subsidy program is revived. It is one of several hot-button topics that will be discussed between the league and the player's union this offseason as they try to hammer out a new collective bargaining agreement.
When Houston opened the league's first retractable roof stadium in 2002 it cost $350 million. The cost of building such a facility today has skyrocketed. University of Phoenix Stadium cost $455 million when it opened in 2006, Lucas Oil Stadium cost $750 million when it opened in 2008 and Dallas Cowboys Stadium cost $1.3 billion when opened in 2009. This is one of the many reasons why critics of the downtown stadium plan believe the cost of the retractable-roof stadium, slated to open in 2015, will far exceed the current $1 billion projection.
We're giving the tailgate experience steroids. We're going to do things nobody has ever thought of.
-- John Semcken, vice president of Majestic Realty Company
The prospect of having a team in a new stadium in Los Angeles depends on how well both groups are able to finance their plans. Leiweke said it's what keeps him up at night these days. Semcken and Roski seem to be less worried about completing the process now, understanding the full financing can't possibly be worked out until there's an agreement with a team.
"There's not going to be anybody to finance a stadium until you have a team, so it's a waste of our time," Semcken said. "We do have a plan after talking to investment bankers, who said this will be easy to finance. We're really not worried about it. We have a plan, and that plan will go into effect once we have a team. Our finance plan assumes we only have one team and only play 10 games. That's all. To have a financing plan in place until you have a team is silly."
This is one of the many fundamental differences between the downtown and Industry plans. Leiweke believes you must have a diverse events center, not just a football stadium, capable of hosting 50 events a year ranging from Super Bowls and Finals Fours to major conventions and trade shows to make the project financially feasible for all parties involved. Semcken and Roski contend their financing plan for an open-air football stadium will be sufficient if they host nothing more than 10 NFL games a year.
No matter who you side with, this much is certain, neither has the financing currently in place to begin construction tomorrow.
"You have a site in the City of Industry, which had some momentum from a regulatory standpoint but really can't find the financing solution just yet," Grubman said. "And you have another quite attractive site in downtown L.A., which has the backing of some very, very capable people and it has momentum from the standpoint of the city and the county but it also does not have a financing solution in place."
Leiweke agrees the fate of both stadium proposals hinges on financing and believes it's the reason the diverse downtown project will eventually be built instead of the football-centric site in Industry.
"This is all about financing. Period. End of story," Leiweke said. "Forget all the other stuff about the location, who's going to build it and so on. Believe me, you don't have banks asking, 'How are you going to get everyone in there?' What they care about the most is can you generate the revenue to make a $1 billion private investment payoff. That's what they care about. What they care about the most is contractually obligated income. Period. That's the whole game."
While the artist renderings of the Industry stadium feature sample signage for Sony, Miller and Grey Goose, among others, the site has yet to get any official sponsors or naming right deals, which would help toward the financing. Leiweke, on the other hand, is reportedly close to completing a naming rights deal for the downtown stadium worth at least $600 million over 30 years, in addition to other "founding partner" deals with other companies, which could put the total sponsorship figure close to the estimated $1 billion price tag for the stadium.
Semcken was less than impressed with the projected naming rights figures.
"Twenty million a year in naming rights is embarrassing. We would never do that. That's much too low and it's frankly bad business before you have team," Semcken said.
The biggest problem the Industry group has with Leiweke's finances is his promise that the project won't cost taxpayer's a penny. Semcken claims "AEG is expecting taxpayers to dole out well over a billion dollars for a proposal that will compromise the city's general fund."
Leiweke shakes his head at what he terms the "fear tactics" of his opponents while explaining the plan he laid out to receptive council members last week. AEG will completely pay for the cost stadium, even if it is more than the $1 billion projection. Before building the stadium, however, it will tear down the west hall of the convention center and build a $350 million replacement. To do that Leiweke wants the city to float $350 million in bonds to help finance the project, which he guarantees to repay with revenue from the stadium.
AEG owns, operates and consults with more than 100 venues worldwide from Los Angeles and Miami to London and Shanghai.
"This is an exact replica of the Staples Center model where we first tore down the North Hall of the convention center," Leiweke said. "They're talking about the parking lots under the West Hall and digging under there and how expensive that is. What are they talking about? There was a parking lot below the convention center at Staples Center. They don't think we get that? We took down the old North Hall and its underground parking lot before we built Staples Center there. Last time I checked there also used to be structures where L.A. Live is. We get how to build things. We build more of these than anyone in the world."
|An artist's rendering of the proposed stadium 20 miles from downtown in the City of Industry.|
Leiweke, battling a cold on this overcast day earlier this month, explaining his vision between sips of coffee, finally laughs when he's reminded of the 90-day deadline he imposed on this project nearly 60 days ago.
"We're not going to have a team in the next three months. We know that," Leiweke said. "We've said that from Day 1. We just want to have an outline of an agreement."
While some have questioned the commintment of billionaire Philip Anschutz, the principal financial backer of the downtown project, Leiweke said Anschutz is committed to the project and will actually choose the architect to design the building this month. His commitment, however, is still contingent on the outlined agreement Leiweke has stated.
"This misnomer that he hasn't approved this is wrong. He's approved it as long as we get the right deal done with the city, the right deal done with the league, the right deal done with a team and get the contractually obligated income," Leiweke said. "Some of that is not going to happen in the next three months, nor did we say it is."
Everyone involved with bringing the NFL back to Los Angeles, whether it be in downtown or Industry, understands nothing will happen with the NFL until the league and the player's union come to their own agreement. Forget about relocation, teams can't even trade players until a new CBA is approved. It's a process that could very well drag on through the spring and summer, depending on how contentious discussions get. The delay actually works in the downtown group's favor since it officially began this process about three months ago unlike the group in Industry, which has been at this for three years now.
While AEG has yet to choose an architectural design (it narrowed its choices to three last month), Roski has been showing off detailed artist renderings and meticulous models of his site since announcing his plans at an April 2008 news conference at Staples Center with, ironically enough, the west hall of the Los Angeles Convention Center serving as a backdrop. Roski not only owns the 600-acre lot on the northern side of the 57 and 60 freeway interchange where he wants to build his $800 million, 75,000-seat stadium, but he has two approved environmental impact reports and is ready to begin construction as soon as he gets a team.
Leiweke, however, said he has been working closely with the league on the downtown project and believes it will be in position to get a team and begin construction after the league resolves its labor dispute. He said it will become clear soon that downtown is the site the NFL wants to return to.
"I think if we do this right, within my timeline, we'll hopefully make a couple of announcements and when we do, I think once and for all, it will be game, set and match," Leiweke said. "People can shoot at us but we will have proven that it works, that the vision is right and that the league supports it. Is [NFL commissioner] Roger Goodell ever going to come out and say this is my site and this is the only site and that's it? No. But I can assure you if we hit some of the marks we're going to hit in the next couple months it will be clear that those marks were hit with the help of and in conjunction with the NFL."
This is all about financing. Period. End of story.
-- AEG president Tim Leiweke
Nine years ago, Roski, Leiweke and Wasserman sat side by side on a dais inside Staples Center to announce plans for a downtown football stadium within walking distance of the arena. Back then, the open-air stadium would have cost $450 million (with a similar financing plan as Staples and the current events center proposal) and seated 64,000 fans. The bid, however, was scrapped less than a month later amid political opposition and resistance from the city-owned Coliseum, which still had dreams of attracting an NFL team.
When Roski talks about a downtown football stadium now, he doesn't cite political opposition or the Coliseum as reasons his bid faded away in 2002. In one interview, he said he passed on the idea because the location simply didn't work. In another interview, he said the NFL contacted the group after the announcement and said the league wasn't interested in going downtown, citing a need for fans to have areas to tailgate.
Leiweke and Roski remember the events differently. Roski has spent $17 million over the past three years on the Industry project, but Leiweke said he hopes his old friend and business partner will soon support the downtown cause again instead of trying to tear it down.
"We know this has been Ed's passion. We get it," Leiweke said. "I'm hoping Ed wakes up one day and understands if this is truly about getting the NFL back here, that this is probably now where it's going to happen."
If there is one key phrase Roski and Semcken have embedded in their brains after dealing with the NFL for the past 15 years, it is "fan experience." Industry's artist renderings don't so much resemble a football stadium as they do a theme park with a football field.
"We came up with all these ideas for fan experience in the parking area, with the wave pool and the gondolas, where you can fly over the site and the concert stages and the NFL Experience with punt, pass and kick, and the BMX bike course, and the Harley Davidson Café and the hot rod areas," Semcken said.
"We're giving the tailgate experience steroids. We're going to do things nobody has ever thought of."
Leiweke has seen the artist renderings from Industry and says he is amused by the fanciful paintings more than anything else.
"I can show you all kinds of designs with water wheels and theme parks and gondolas, but it's not going to happen for 8-10 games a year," said Leiweke, who contends that building a $3 billion campus for 10 games a year doesn't work. "This district [L.A. Live] works because we have 400 events a year. This district will work even better if we have 450 events a year."
Leiweke said there will be plenty of room for fans to park with 32,000 spaces available within a 15-minute walk of Staples Center, currently more than the slated spaces that will be built in Industry. While Semcken doesn't doubt Leiweke's number, he questions what kind of "fan experience" it would be for those people parking above and below ground who will be unable to tailgate. Leiweke said there will be ample room for those desiring to tailgate the old-fashioned way but envisions the Los Angeles tailgating experience will be taken to another level with the amenities and facilities already available at L.A. Live.
"We have a 100-acre campus, and when they see the design they'll see we have a lot of public space to tailgate," Leiweke said. "Not only will there be room to tailgate but L.A. Live is the ultimate tailgate party and we're already built. We don't need to build it for 10 or 20 days a year, it's built for 365 days a year."
The other potential problems with a downtown stadium would be the increased traffic in the area and the potential for a gridlocked mess if an NFL game were to take place at the same time as a Lakers, Kings or Clippers game. Leiweke promises no event will be booked at Staples Center the same time as an NFL game, kiddingly saying he knows the guy who books the arena. He also says anyone who has driven to downtown on Saturday or Sunday knows there's rarely any traffic to speak of.
"When you have 350,000 people that work downtown every day, traffic is not an issue [on the weekend]. It's just a smoke screen," Leiweke said. "That's just a fear tactic."
If the war of words between Leiweke and Semcken sounds personal at times it's because it is at this point. While Leiweke and Roski have been respectful of one another in their public comments, the same cannot always be said for Semcken, who called Leiweke a "bad guy," or Leiweke, who had to bite his tongue before calling Semcken something worse. Things escalated between the two groups shortly after Leiweke and Wasserman announced their downtown stadium plan in April. One month later Roski hired Florida-based media strategist Ben Porritt, who was a national spokesperson for the McCain-Palin campaign. Porritt, who was also the press secretary for House majority leader Tom DeLay, did have some experience in sports. As the president of the communication firm Outside Eyes, he personally helped Alex Rodriguez craft his interviews and news conferences after Rodriquez admitted to taking performance enhancing drugs two years ago.
"Instead of getting into a war of words and instead of us hiring PR consultants
we're going to focus on what we're doing," Leiweke said. "We're not out bad-mouthing anyone personally. We're just not going to do that, because that means you're making the decision for the wrong reason."
So when will we know the NFL is returning to Los Angeles? Well, there will be two big indicators long before a team loads up the moving vans. The day shovels hit the dirt in either downtown or Industry would undoubtedly begin the countdown since both groups have stated construction is contingent upon a team agreeing to move into their venue and there's no way they would begin such a process until they had a firm commitment. The second is if either group buys into an NFL team, as both sides have stated their only interest in a team would be moving one to Los Angeles.
Perhaps the likeliest candidate to move at the moment is the San Diego Chargers, only a two-hour drive down the Interstate 5. Chargers owner Alex Spanos has been trying to sell a stake in his team and it's unlikely the Chargers will ever get a new publically financed stadium, something they've been trying to get for nearly a decade. The Chargers can announce their intentions to leave San Diego between Feb. 1 and April 30 of each year through 2020 if they pay off the bonds used to expand Qualcomm Stadium in 1997, which currently would be approximately $26 million. The Chargers' last best hope of moving into a new proposed stadium in downtown San Diego isn't expected to get much political support due to its need for public financing and may not even make it onto the ballots if California Gov. Jerry Brown is successful in eliminating redevelopment agencies as a source of public financing.
If the Chargers' dreams of a new downtown stadium in San Diego are killed, they would likely look to get out of their stadium lease after the 2011 season and could conceivably play in the Los Angeles Coliseum -- their first home when they began as the Los Angeles Chargers in 1960 -- for two years while their new home is being built.
"We'd welcome them with open arms," said Coliseum general manager Pat Lynch. "We'd need to do some modifications but we'd be ready, willing and able to accommodate them for as long as they needed."
The Chargers already have some history with Wasserman and AEG. Two years ago the Chargers signed a deal with the Wasserman Media Group to help market the team in Los Angeles and Orange County and help sell luxury suites and club seats in the area. And for two years after the AEG-owned Home Depot Center opened in 2003, the Chargers held their training camp at the $150 million sports complex in Carson.
So which venue will become a reality and which one will join the 18 others before it that have failed? Ask both groups and they'll say their stadium will be built and their opponents don't have a chance. Ask those who have followed this nearly two-decade-long saga and they'll say it doesn't really matter until the relocation papers are signed and even then they won't believe it until the league plays its first game in Los Angeles since Christmas Eve 1994.
Leiweke, however, smiles as he stands up, looking again outside of his window at what he believes will be the future site of Los Angeles' NFL team by 2015.
"By the time we hit the Super Bowl we're going to have an announcement that proves to everyone once and for all that this project is going to happen," Leiweke said. "It's going to be private and it's going to be brilliant and it's going to happen."
Arash Markazi is a columnist and writer for ESPNLosAngeles.com. Follow him on Twitter.