Stadium Deal and District Map: What Was Decided?

The Los Angeles City Council and the County Board of Supervisors both held meetings on Tuesday, with outcomes that could be described as game changing:

Stadium Deal: As was widely predicted, the Los Angeles City Council voted unanimously to approve a framework for financing a $1.3-billion downtown stadium. The council's decision allows the Denver-based Anschutz Entertainment Group (AEG) to continue negotiations with league executives and team owners for the relocation of one (or perhaps two) NFL teams.

Teams rumored to be in discussion with AEG include the San Diego Chargers, the Minnesota Vikings, and the Jacksonville Jaguars.

Technically, the city council approved a "memorandum of understanding" that outlines a non-binding public/private financing scheme: AEG would privately fund a 75,000-seat stadium adjacent to AEG's L.A. Live entertainment complex. The city would issue $275 million in taxpayer-backed bonds to build a new convention center wing. Sales tax receipts and the new stadium's property taxes would - it's hoped - repay the bonds without impacting the city's strained General Fund budget. (If they did, AEG is pledged to make up the difference.) In addition, AEG would sell $80 million in bonds as its contribution to rebuild convention center facilities. AEG, not the city, would be responsible for repaying that debt.

The MOU deliberately leaves other deal points in the dark, including the sharing of costs for infrastructure improvements and any sharing of revenues from digital billboards and stadium sponsorships.

Even more murky are the contradictory assumptions that underlie AEG's and the city's negotiating positions. AEG assumes a return on its investment of only 6.7 percent, absurdly low, according to most analysts. A low rate of return seems designed to limit the city's expectations for additional revenue from AEG.

In compensation, the city assumes significant "spill-over" revenue from sales and bed tax receipts elsewhere downtown. Economic studies show that sports stadiums rarely generate much net new revenue, making the city's optimism seem unusually risky.

The deal also faces an extensive (and expensive) environmental review, something that AEG sought to avoid, citing the exemption the state legislature gave a rival stadium planned for Irwindale. AEG didn't get a free pass on a stadium EIR, but the company may still seek legislative relief from environmental lawsuits the company regards as "frivolous."

The NFL represents the biggest unknown. The league's intentions are notoriously opaque while team owners jockey for sweeter deals or taxpayer-funded stadium improvements in their current hometown. If the league and team owners eventually agree on a relocation plan, they may impose financial conditions on AEG's ownership of all or part of a team that would sour AEG's revenue expectations.

And to complicate negotiations with the NFL even more, AEG may be seeking not one, but two teams because, say some observers, overall revenues do not pencil out in AEG's favor with only one team in residence.

District Maps: The county Board of Supervisors chose to disagree - setting up even more bitter confrontation between competing redistricting plans when the board meets on September 6.

The "status quo" plan recommended by the board's Boundary Review Committee moves two cities and several unincorporated areas from one district to another to balance population growth since 2000, but without creating another district with a majority of Latino residents.

Supervisor Gloria Molina was sharply critical of the boundary committee's recommendation when the board met on Tuesday. She and Supervisor Mark Ridley-Thomas favor a plan that carves out a Latino-centric district, like the one Molina represents, mostly from Supervisor Don Knabe's 4th district.

Supervisor Zev Yaroslavsky, who is termed out of office in 2014 and who may run for mayor in 2013, has expressed some skepticism of the plan, but leans toward an alternative map that creates opportunities for a Latino candidate.

Those three votes aren't enough. Adoption of a new map - with or without a new Latino-centric district - needs four votes.

Unless Supervisor Don Knabe or Supervisor Mike Antonovich can be persuaded to support an alternative map before October 31, redistricting will done by a committee of three officials who are elected countywide: Sheriff Lee Baca, County Assessor John R. Noguez, and District Attorney Steve Cooley. All three might be prepared to redraw districts to win more credit with their Latino constituents.

If by chance a second district with a majority of Latinos doesn't materialize, Latino advocacy groups will challenge the decision in court. They expect to win, as they did in 1990.

Knabe - a moderate Republican - could be the big loser. Latinos now make up 48 percent of the county's population (up from 45 percent in 2000) and represent one-third of the county's registered voters. Knabe may have no choice but to run for one last term in a district designed to elect a Latino Democrat. If he does run, changing demographics, ethnic politics, and the tide of history will be his challengers..

The image on this page was adapted from public domain sources.