By Richie Duchon City News Service
By Richie Duchon
City News Service
A proposed downtown football stadium and expanded convention center would generate about $41 million a year in new net tax revenue, according to a report released Wednesday by a Los Angeles consulting firm hired by Anschutz Entertainment Group, which is seeking to build the facility.
AEG also hired PKF Consulting USA, which studied the effects new and bigger conventions might have on the city's tourism economy.
The reports come as the city is nearing the end of negotiations with AEG on the terms of a proposal to build a $1.3 billion event center that would include a new football stadium and convention center hall. A memorandum of understanding that contains the financial framework for a deal is expected to be released next week.
AEG originally proposed to fund the design and construction of the new convention center building with as much as $300 million in city-issued bonds, but city officials have warned that the terms of the deal may have changed during private negotiations.
City Council members have sought to persuade a skeptical public that no city tax money would be used to repay the bonds. AEG proposed to make the payments with rent from the football stadium, ticket, parking and signage revenues, and future increases in revenue from the proposed new convention center.
The Metropolitan Research and Economics study released Wednesday provides the first publicly released evidence the project could cover the debt service.
Civic, business and labor leaders are expected to address the two reports during a mid-morning media briefing at the Convention Center. Scheduled speakers include Central City Association President and Chief Executive Officer Carol Schatz, California Forward co-chair Bob Hertzberg, Los Angeles Omni Hotel general manager Kathy Faulk, and Grant Mitchell of Tradeshow and Exhibit
Builders Local 831.
"The Economics of Sports Facilities and Their Communities,'' published in the Summer 2000 issue of the Journal of Economic Perspectives by John Siegfried and Andrew Zimbalist, economics professors from Vanderbilt University and Smith College declared that "few fields of empirical economic research offer virtual unanimity of findings. Yet, independent work on the economic
impact of stadiums and arenas has uniformly found that there is no statistically significant positive correlation between sports facility construction and economic development,'' citing seven studies conducted by 1990 and 1999.
The article also found that studies commissioned by proponents of government subsidies for stadium construction "are fraught with methodological errors that may be easily overlooked for those not trained in economics.''