Monday, September 24, 2012
Farmers Field inches closer to reality
By Arash Markazi
LOS ANGELES -- Yet another hurdle to the NFL's potential return to Los Angeles was cleared Monday, despite recent concern that plans for a downtown stadium could be doomed.
A Los Angeles council committee approved a package of agreements with Anschutz Entertainment Group to build Farmers Field, a proposed $1.5 billion football stadium and convention center expansion in Downtown Los Angeles. The package included the project's 10,000-page environmental impact report, which took 18 months to complete at a cost of $27 million and was submitted last April.
The full city council will vote on the agreements Friday and even the deal's biggest critics early-on expect it to be passed.
Once city officials approve the EIR and the project, there will then be a 30-day window for legal challenges, which will be resolved within 175 days, under new legislation passed in Sacramento last year with this project in mind.
If everything goes according to plan, Farmers Field could be in position to break ground by March 2013, similar to a competing stadium proposed by real estate magnate Ed Roski in the City of Industry, which has been ready to push dirt since 2009. Both stadiums, however, need a long-term commitment from an NFL team before construction can begin. And whenever construction does begin, AEG president and CEO Tim Leiweke said it will be about four years until the stadium and convention center is finished.
Farmers Field and the future of AEG were put in doubt last week when it was announced that AEG was being put up for sale by its owner, Denver billionaire Philip Anschutz. Leiweke, however, calmed those concerns at the committee meeting, saying he and his executive committee had recently signed extensions and the new owner of AEG would be committed to the project and bringing the NFL back to Los Angeles.
"Mr. Anschutz has made it very clear that our dedication to Farmers Field is going to have to be their dedication to Farmers Field," Leiweke said. "It's not just the management team or myself telling you we're going to get Farmers Field done, but it's also a commitment the new owners feel the same way and are as committed as we are to finishing this project."
Leiweke signed a five-year extension with the company last week, according to multiple sources, and said he intends to be with the company until Farmers Field is built. While news of AEG's impending sale came as a shock to many, Leiweke said Anschutz, 71, has thought about it since the Los Angeles Kings won the Stanley Cup in June.
AEG owns the Kings, the Los Angeles Galaxy, which recently won the MLS Cup; and a 30 percent stake in the Los Angeles Lakers. AEG also owns and operates the Staples Center, which is home to the Kings, Lakers, Los Angeles Clippers and Los Angeles Sparks, as well as the Home Depot Center, which is home to the Galaxy and Chivas USA of Major League Soccer.
"When you look at where he's at with his life and the amount of resources he has dedicated to AEG, there was always going to be an exit strategy," Leiweke said. "To his credit, the ability to go through that transformation and find the next investor in AEG is better done now and better done before we take the council vote on Friday and certainly better before we walk in the door and begin to negotiate a deal with a team owner. He is actually helping us with the process and trying to get through this and trying to make sure the new owners of AEG will be able to be the ones making a deal with the NFL and making a deal with the team that's going to move here. I think that's going to help us, not hurt us."
Leiweke said he anticipates that AEG will have a new owner in place by March before the NFL owners' annual meeting. A new owner, however, along with a completed deal with the city would have to be in place by January for the NFL to realistically return by the 2013 season. NFL commissioner Roger Goodell sent out a memo to all 32 teams in July stating that any franchise interested in relocating for the 2013 season must apply between Jan. 1 and Feb. 15 of that year, and prove it has exhausted all attempts to remain in its current location. Given that a new owner would have to complete the purchase of AEG, which experts say could be anywhere between $6 billion to $8 billion, before even attempting to buy at least a share of an NFL team, a more likely time frame for relocation would be January 2014 with Farmers Field opening in 2018, with the relocated team playing in either the Coliseum or the Rose Bowl in the interim.
There have been several reported potential buyers for AEG but multiple sources with knowledge of the sales process say the early leaders could be a group led by Dr. Patrick Soon-Shiong, who purchased Magic Johnson's minority stake in the Lakers two years ago, and the Guggenheim Partners, which recently bought the Los Angeles Dodgers, along with Johnson and other local investors.
To assist them with the sale of AEG, the Anschutz Company retained as financial advisors Blackstone Advisory Partners, which recently managed the auction of the Dodgers.
Soon-Shiong is the richest man in Los Angeles, according to Forbes and the Los Angeles Business Journal, with a net worth of over $7 billion. The 59-year-old physician, businessman and philanthropist has played a primary role in cutting-edge treatments for a wide variety of cancers. He was a 25-year season-ticket holder for the Lakers before purchasing Johnson's 4.5 percent interest in the team.
"I have a lot of respect for what the (Guggenheim Partners) have done for the Dodgers," Leiweke said. "The commitment they've made financially. I think they'd be a great partner if they were interested."
When asked if anything should be read into the fact that Soon-Shiong attended last week's New York Giants-Carolina Panthers game as a guest of Panthers owner Jerry Richardson, who was the NFL's former stadium committee chair, Leiweke smiled and said it was the media's job to read.
"I encourage you to read into that," Leiweke said. "I'm friends with Patrick. We do a lot of charitable things together. I have a huge amount of admiration for Patrick. I'm certain Patrick is going to be interested in this."
Soon-Shiong is putting together an investor group to make a bid for AEG, according to a Reuters report.
No matter who takes over AEG, Leiweke seemed confident he would be able to see Farmers Field through and that Los Angeles would soon have an NFL team again.
"We're going to cut a ribbon and I'm going to be the one cutting it," Leiweke said. "I may cut my arm off with the ribbon at some point but we're dedicated to getting this project done. We're going to get Farmers Field done, we're going to cut that ribbon and the new owners are going to be as excited and as passionate as we are."