Tim Leiweke seeks lawsuit protection
LOS ANGELES -- Plans to build an NFL stadium in downtown Los Angeles could be delayed or completely derailed if state lawmakers don't introduce special legislation in the next two weeks that would protect the developers from frivolous lawsuits, AEG president and CEO Tim Leiweke told a state Senate panel Friday.
"We've made it very clear that we will not move forward without this," Leiweke said. "We cannot and will not move forward with this project with that uncertainty hanging over our head because the NFL will not commit to Farmers Field with that uncertainty hanging over our head."
Earlier this month the Los Angeles city council unanimously passed the financial framework of an agreement between AEG and the city to build Farmers Field, a $1.2 billion football stadium in downtown Los Angeles which would be attached to a new $275 million wing of the Los Angeles Convention Center.
Leiweke said he expects Majestic Realty, which has a rival stadium proposal in the City of Industry, will file a lawsuit in an attempt to stop the downtown project. He also claimed John Semcken, vice president at Majestic and its stadium plan's point man, was with lobbyists in Sacramento recently urging legislators not to pass any law that would help Farmers Field avoid litigation.
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"Clearly John Semcken sees this as an opportunity to stop our project," Leiweke said. "We've had feedback from senators and assemblymen that met with them and they've questioned our character and me personally and they've questioned whether we really built and developed Staples Center and L.A. Live. This has led me to believe, without a question in my mind, that people that go around and question character are people that will litigate. They spent the week in Sacramento and I think they did themselves a disservice because almost everyone that came back to us was shocked at how they trashed us."
Semcken didn't deny he was in Sacramento speaking to legislators but said he and Majestic have no plans on filing a lawsuit to stop the downtown stadium project. "In over 70 years Majestic Realty has never sued a competitor and has no plans to sue a business partner," Semcken said. "We are 100 percent committed to returning the NFL to our region and have shown the league and the teams the tremendous economic upside of our project."
Ed Roski, who owns Majestic Realty, helped build Staples Center with Philip Anschutz and also owns a piece of the Lakers and Kings with Anschutz. He has said if AEG gets a team and is in position to build Farmers Field he would not stand in the way.
Leiweke has said the same thing about Roski's project, which has been "shovel-ready" for two years after Roski secured an exemption to the California Environmental Quality Act by the state Senate in 2009. The ruling exempts the Industry project from state environmental laws and protects it from environmental lawsuits. Legislators were roundly criticized for passing the exemption, making it impossible for AEG to secure a similar deal, leaving Leiweke to figure out alternative ways to expedite possible litigation.
"We are not going to get into a war of words. I hold Ed in too high a regard for that," Leiweke said. "If their project gets done and they get a team and push dirt, we are committed to getting out of the way and if we get our project done my guess is Ed is not going to build a second stadium."
Roski was able to gain support for his exemption by promising jobs and an NFL team if it was granted but two years later the 600-acre site is still empty and there is no NFL team, leaving plenty of skeptics in Sacramento. But with California's unemployment rate at 12 percent, the second-highest of any state in July, there could be some traction to help a project that developers claim will create 18,000 temporary and permanent living-wage and union jobs.
Leiweke wasn't exactly sure what measure could be introduced and passed before the Sept. 9 deadline for action on bills but had previously told ESPNLosAngeles.com he was hoping challenges would get sent to an arbitrator and resolved in three months rather than be subjected to a potentially lengthy lawsuit.
"We will do a full environmental impact report but there are crazy people out there that will come along and try to stop this project by suing us and taking us to court," Leiweke said. "We just want a binding arbitration with a three-person commission appointed by the political leaders with a voice from the environmentalists that can hear these complaints. We have committed to making this the most environmentally friendly stadium ever built."
If AEG is unable to get a measure passed next month, they could put a hold on design and environmental work currently being conducted at a cost of $50 million in the hopes of breaking ground on the project by June 2012.
"If we are unsuccessful it will be a blow to the project and we would have to evaluate what to do going forward," said Ted Fikre, chief legal and development officer for AEG. "There is a significant investment of capital that's required for us to continue to progress this project at its current pace, as much as $50 million between now and next summer. We view this as a critical measure and one we are hopeful to get to keep moving on that schedule."
Friday's public hearing by the Senate Select Committee on Sports and Entertainment to examine the project and whether legislation is necessary began with testimony from former New York Giants defensive end Michael Strahan, who told the senators they should do whatever is necessary to bring the NFL back to Los Angeles.
"L.A. is the city the NFL wants to come back to and everyone knows that," Strahan said. "I've had talks with [NFL commissioner] Roger Goodell and I've blatantly asked him when is L.A. getting a team, it's time and he doesn't disagree and AEG is the partner the NFL needs to bring football back to L.A."
Leiweke believes AEG can only partner with the NFL if AEG can prove to the league that the project is on track and won't be stalled or stopped by litigation. If lawmakers can't provide AEG with that protection and security, Leiweke doesn't believe it will be possible to secure a team and continue with the project.
"If this project can be delayed for two years, no team and no league is going to make a commitment while we try to work through the legal process," Leiweke said. "That's the last major point we have to overcome with the NFL and teams to get them to come to L.A. We have to show them certainty. No one is going to come to L.A. if they're going to face two years' worth of litigation."
Arash Markazi is a columnist and reporter for ESPNLosAngeles.com.
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