Anschutz Entertainment Group (“AEG”) recently submitted a proposal to the City of Los Angeles to construct an event center, a convention center hall, and parking facilities near the site of AEG’s planned $1 billion professional football stadium in downtown Los Angeles. City officials, including Mayor Antonio Villaraigosa, have expressed support for the football stadium and excitement at the prospect of attracting a professional football team to the City after a 16-year absence. In its proposal, AEG reiterated its commitment to construct the stadium without any public subsidy, and to finance the other facilities without burdening the City’s general fund.
The proposed financing package includes a long-term ground lease for the event center site and approximately $350 million in tax-exempt revenue bonds. Proceeds from the sale of the bonds are expected to pay for the convention center hall and parking facilities, and to refinance outstanding tax-exempt bonds that are currently secured by the event center site.
AEG’s proposal notes that the proposed new facilities are necessary to keep the Los Angeles Convention Center nationally competitive, and that a substantial number of jobs will result. AEG has proposed that, to the extent project and increased tax revenues do not support the debt service payments on the requested bonds, it will make up the shortfall under a gap funding agreement.
The company, which has a hugely successful development history in downtown L.A., having constructed the L.A. Live and Staples Center facilities, has set a target date of fall 2015 for completion of the stadium and convention facilities.