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20Dec/1138

NFL IN LA: AEG’S MISSTEPS WITH FARMERS FIELD

NFL in LA Farmers Field Wing Stadium Gensler Footballphds 3By Jaboner Jackson 8 a.m. |  This past summer, AEG and the City of Los Angeles signed a Memorandum of Understanding (MOU) that provided the general framework for construction for Farmers Field in downtown Los Angeles.  Under the MOU, AEG confirmed key aspects of its operation of Farmers Field in regards to professional football, including a nontraditional landlord-tenant relationship with an NFL team that would differ from usual NFL stadium situations.  The MOU also delineated a clear relationship between Farmers Field and the City of Los Angeles for construction of a new wing for the Los Angeles Convention Center, commonly referred to as Pico Hall.  But AEG has since stumbled in regards to both aspects, thereby delaying the Environmental Impact Report (EIR) for Farmers Field, which in turn has delayed a Disposition and Development Agreement (DDA) with the City of Los Angeles and resultant groundbreaking on construction by at least a year from 2012 to 2013. 

The NFL And A "Fixed Return"

As part of its offer to finance the construction of Farmers Field for an NFL team, AEG has proposed a landlord-tenant relationship with an NFL team that would be nonconventional by NFL standards.  The MOU outlines this relationship as being "unique."  In typical NFL stadium deals, the NFL team operates the stadium in regards to NFL games and ticket sales.  In fact, this is the exact arrangement that is to take place between the San Francisco 49ers and Santa Clara Stadium Authority for Santa Clara Stadium, a situation that we have covered extensively on this site. 

 

But for Farmers Field, AEG will be in charge of game day operations in the same way it is responsible for game day operations for the Los Angeles Lakers and Los Angeles Clippers for Staples Center.  As first reported by Jason Cole of Yahoo! Sports, the NFL has been reluctant to proceed with this type of relationship.  The NFL would like to control its own game day experiences and ticket sales.  Doing so would enable the NFL team to share in revenues from all seating, parking, and concessions.  But as it stands, AEG would control these aspects of the game day experience.  Accordingly, AEG would give a "fixed return" to the NFL team.  The NFL would like a return with greater upside for a relocated franchise rather than one that is fixed.

 

The City of Los Angeles and Stadium Designs

 

Publically, the City of Los Angeles and AEG pushed the benefit of Farmers Field on convention center business as the main reason why Los Angeles needed a new football stadium.  Farmers Field's permanent or retractable roof structure would enable the stadium to house convention center events while synergies from additional hotel construction in the area would put Los Angeles into the nation's top ten convention cities. 

 

But in November, AEG--through its partners Gensler Architects and ICON Venue Group--unveiled new designs for Farmers Field.  In these new designs, a deployable roof was the centerpiece.  This design was in contrast to earlier designs presented to the City of Los Angeles, which featured a retractable roof. 

 

The change was prompted by the NFL's criticisms of projected construction costs for Farmers Field.  A deployable roof costs less than a retractable roof.  Although AEG had pinned construction cost at $1.3 billion, the NFL projected true stadium costs at a significantly higher amount.  Footballphds.com had projected a construction cost of at least $1.6 billion for the old Farmers Field design, out of which we had estimated approximately $400 million as the cost of the retractable roof, which was significantly more than AEG's estimate for such a structure. 

 

AEG has only recently started to present updated designs to the City of Los Angeles.  The City Councilmembers will have to be sold on a deployable roof structure, particularly as it relates to housing convention center events at Farmers Field.  But more importantly, City Councilmembers will have to come to terms with the realization that the NFL is calling the shots on the city's new stadium, a situation all too familiar to the City of Los Angeles and soon-to-be defunct Los Angeles Memorial Coliseum Commission.

 

Outlook

 

Putting together a new stadium design delays AEG's EIR to the City of Los Angeles beyond its previous January 2012 deadline.  Since the EIR relies on stadium designs to assess environmental impact, the EIR cannot be completed until designs come closer to completion.  AEG had hoped to have an EIR submitted to the City of Los Angeles by January 2012 and a team commitment in place by February 2012 with groundbreaking on Farmers Field taking place June 2012.  Eventually, the City Councilmembers will sign off on the new designs, but the delay is inevitable. 

 

Accordingly, the delay in the EIR has postponed AEG’s timeline by a year.  Since AEG is squarely focused on the San Diego Chargers as their anchor tenant for Farmers Field, the delay has given life not only to Majestic Realty and Los Angeles Stadium in City of Industry, but also to the Oakland Raiders, who have snuck into contention as Los Angeles Stadium's anchor tenant, a situation that we will begin to review in full this week.  The once invincible AEG is now not only having difficulties in China but Los Angeles as well.

***

References From Footballphds.com:

Relocation Fees for Los Angeles (12/2011)

Our Interview With TouchdownLA.com (12/2011)

AEG in China (12/2011)

Financing Santa Clara Stadium, Part 1 (12/2011)

Financing Santa Clara Stadium, Part 2 (12/2011)

Financing a Football Stadium in Los Angeles, Part 1 (10/2011)

Financing a Football Stadium in Los Angeles, Part 2 (10/2011)

Financing a Football Stadium in Los Angeles, Part 3 (10/2011)

Financing a Football Stadium in Los Angeles, Odds and Ends (10/2011)

Nuts and Bolts of LA Stadium (10/2011)

Majestic Realty and LA Stadium Primer (10/2011)

Remembering the Staples Center Deal (07/2011)

AB 900 and SB 292 (09/2011)

AEG versus Majestic Realty (06/2011)

The Definitive NFL Stadium Guide Version 1.5 (08/2011)

Final Stack Ranking of Teams Headed to Farmers Field (08/2011)

KCRW “Which Way L.A.”: What About Football in the City of Industry? (10/2011)

Farmers Field’s Winged Roof (11/2011)

Gensler and Populous (08/2011)

Understanding the Memorandum of Understanding (07/2011)

 

Outside References:

Yahoo! Sports, Jason Cole (10/2011)

 

jaboner@footballphds.com

twitter.com/footballphds

Comments (38) Trackbacks (0)
  1. Wait, aren’t you on the AEG payroll? How are they gonna react to your telling them about their mistakes?

    Can you say bait and switch with Farmers Field and the roof.

  2. None of these issues are concerns. The NFL could have done LA Stadium years ago but they didn’t. Even this weekend, there was an NFL event at LA Live. That kind of stuff isn’t happening with LA Stadium.

    • your post is nothing but anecdotal fluff…fact of the matter is that there have been at least a dozen proposals for nfl stadia in socal for the last 15 years and all of them have gone nowhere…to make matters worse this is aeg’s 2nd attempt at this and like the 1st it will fail…they are simply too arrogant and stingy to make a deal work because the numbers are unfavorable for all other parties other than aeg and aeg wants the upper hand.

      but hey they had a bunch of ex athletes on the aeg payroll throw a presser…big friggin deal.

      • Interesting part that it was mostly ex-raiders and they being AEG want the Chargers that makes a lot of sense although JR Seau was there.

        Gotta agree with ya on the 15 years of lies and BS from the League this is why I never get my hopes up. When I see the presser, Season tickets, a kick off and the smell of A 10 dollar hot dog and a 20 dollar watered down beer in a 6oz cup bud light I will believe brotha.

        Until then I got my 4 games on Sunday and 1 on Monday with a hopeful chargers blackout.

      • u r soo right on it!! Bill Lake is hilarious; the NFL had nothin to do w/ AEG’s event; that’s AEG tryin to speak their stadium n2 existence.

  3. If the NFL wants to bring the NFL back to LA, they need to be serious about no public money. I can imagine the next thing that happens is the NFL says to AEG that they need LA to chip in money so that their team can get more money. In Roger Goodell’s comments last week, he didn’t seem too overly thrilled with the NFL coming back to LA. As a local guy who’s been jerked around by the NFL for too long, screw the NFL. Give me my college ball and I’m good.

  4. If AEG wants to bring the NFL back to LA they need some better building designs. Those Gensler plans are bootleg

  5. I don’t get why AEG would be so focused only on the Chargers when at the very least, talking to the Raiders could provide leverage in negotiations with the Chargers. There’s nothing that would make Spanos crap his pants quicker than the thought of the Raiders back in LA.

  6. If I were AEG, I would be negotiating with everyone, the Chargers, Raiders, Vikings, Bills. So what’s the reason for them being “squarely focused” on the Chargers? What’s the NFL’s position?

  7. How would the Raiders deal work @ grand crossings? I think that would be a beautiful park IMO instead of AEG ugly stadium crunched in the middle of downtown but there are traffic issues everywhere. I can’t wait to hear more about Grand Crossings an the Raiders. When I first saw the artist renderings I saw Sony plastered on the front of the entrance and just kinda assumed that they were going to go for the naming rights. I guess you never know who is on deck behind the scenes. The thing I must say is first is the NFL is greedy are they really worth the effort. They really want to break every city and pillage their money don’t they have enough? And I wouldn’t get my hopes up on anything saying L.A. NFL anytime because we have been down this road too long to get suckered by these clowns. I love the turf game just cant stand their business model.

    • Is it safe to say that AEG and Majestic are not going to make this happen? Because that’s what it’s seeming to me. They were so both excited and now we hear nothing from them. The NFL is so focused on the Vikings I don’t even think they care about L.A. And didn’t they already sign TV contracts, so what does it really matter now? The T.V. contracts go for over 10 yrs now.

      • This summer, it all seemed so real. Now, the NFL is screwing us over again. We can only be jilted lovers so many times before we run away. SAY NO CITY COUNCIL TO NFL PIMPING!

        • Felt so real when the Mayor said the raiders were coming back in 1996. How much realer does it gt when the Commissioner comes to Los Angeles hand shakes L.A. at the Coliseum promising a 32nd NFL franchise make all the bidders jump threw hoops and when 700 million dollars was floated in from of them by a Texan Billionaire Bob Mcnair who sold is company to the crooked Enron. When ever the NFL says or Roger Goodell say when the situation is right for the fans and communities to make foot ball work in Los Angeles. He is saying there will be no deal until the NFL gets their money stream and revenue model out of L.A.
          AEG builds a stadium they should get rewarded as well. I heard that the total revenue is here” http://www.signonsandiego.com/news/2011/jul/26/chargers-stadium-search-week-in-review/?print&page=all

          Los Angeles city consultants estimated an NFL team in L.A. “would generate approximately $336 million in revenues annually, with expenses of $283 million.” That amounts to annual income of about $53 million for the team.

          Worth noting, that $53 million figure doesn’t include an estimated $54 million of additional annual income from stadium operations having to do with holding other on-site events, such as concerts, soccer matches and college football games.

          So you can see why the NFL wants a proper deal in this gold mine and AEG wants to make theirs too until that pot gets favored into the NFL s way it will still be the same old story. All about the money always. AEG also stated that if they cant make a profit there wont be a deal and they will play firm. Don’t blame them either.

          • What? Does this mean the Raiders are coming home or not?

          • Yes they are coming home my friend they are coming home. (I hope)

            I wouldn’t mind the rams back either with some dope blue and white gear.

  8. keep the Raiders in Oakland, they never belonged in L.A., Oakland is the Raiders true home, it’s where they were born, have more than half their history, the Rams were L.A.’s true team, i’m not a Raiders fan but i don’t or can’t see why Raider fans would see L.A. as their true home instead of Oakland.

    • Check this out I dunno how they will do it but here it is. Oakland is designing a whole LA live experience while building what is named the coliseum complex. I will just give you the link. They are making a strong move to keep the A’s, Raiders, and Warriors all in one park with 3 venues. Never thought Oakland would do this.

      http://blogs.kqed.org/newsfix/2011/12/09/city-of-oakland-as/

      • Dirty ass Raiders can stay away I dont give a rats ass about them.

        • if we get a new team I hope they don’t use some sissy name if they re-brand a moving team.

          Need something mean Like the L.A sunshine’s that sounds tough and ruthless. The sun can melt you, can give skin cancer, can give you heat stroke. LOL

          I had so many name awhile back that would be crazy but knowing these people bringing football back it will be some lame name like the Sunshines.

  9. If a team returns to the NFL, I don’t see them re-branding the Chargers, Raiders or Rams if they move back to Los Angeles. If the Bills, Jaguars or Vikings move to Los Angeles, then yes I could see a re-branding even though I like the Jaguars name, logo and colors.

  10. @ Jaboner Jackson- Arash Markazi over @ ESPN NFL@LA Four Corners is stating that the Grand Crossing has no signs of life an the only thing the Raiders will be getting is a GM. Any thoughts I know ESPN is nice and comfy over @ L.A. live

  11. I wouldn’t believe anything that Arash says since he works on the L.A. Live campus. I do think Farmers Field is the preferred choice of the NFL. I also read that the California RDA funds have been scrapped, which could hamper a lot of the California Stadium projects.

    I also find it funny that Spanos is keeping Norv Turner & A.J. Smith, the feeling I’m getting is that if they suck again and the stadium bill gets voted down in November 2012 then Spanos can sell his stake of the team to AEG, let them start fresh with a new coach & GM and get Farmers Field built.

    • So obvious on Spanos + Norv + AJ. He doesn’t want to sign big money contracts to a new team when he’s moving in a year. So obvious, it’s pathetic now.

      • some of my friends also mentioned that to keep some well laughable stability hence the move. Just not a team in turmoil in the gm coach searching phase. So it looks as if Norv and the gang will be around for awhile.

  12. $700,000,000 to a 1,000,000,000 dollars farmers is building this thing for? NO WONDER MY INSURANCE RATES ARE SO HIGH!

    • Yeah, no what happens to this mega contract between Farmers Insurance and AEG if the stadium does not get built. And what is the “drop-dead” date for this? Would it be 2013?

  13. AEG selling interests in Staples, Nokia, Kings, Lakers, and Farmers Field project. Guess old man Anschultz realized this is a go nowhere endeavor. Idiot Markazi was on BSPN radio this morning trying to spin the sale of AEG as a good thing for the future of Farmers. Anschultz/Leiweke are the kings of financing and building state of the art sports entertainment venues. If they couldn’t pull this off nobody can. Our hopes of NFL in LA are in Roski’s hands. God help us.


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