Developers Vow to Drop Arena Plan if Initiative Is on Ballot

Developers of a new Downtown sports arena on Wednesday vowed to abandon their plans if a proposed initiative requiring popular votes on publicly subsidized professional sports facilities qualifies for the ballot.

“We can say definitively that if this initiative is on the ballot, we will not continue with this project in the City of Los Angeles,” said Cannon Y. Harvey, president of The Anschutz Corp.

The statement represented a significant toughening of the developers’ previous public position that they would probably abandon the project if the proposed initiative by Councilman Joel Wachs receives the 62,000 signatures it needs in the next four months to qualify for a spot on the ballot sometime next year.

The developers also indicated they are willing to wage a publicity campaign to dissuade voters from signing Wachs’ petitions. “We will certainly do what is necessary to make sure that Mr. Wachs’ proposed initiative is well understood by the voters,” Harvey said.

If that fails, they indicated they will look elsewehere in Los Angeles County for an arena site. Real estate developer Edward Roski, who is seeking to build the arena in partnership with billionaire Philip Anschutz, said that other cities in the county have “of course” already expressed interest in having the facility, which would serve as a home for the Kings, co-owned by Roski and Anschutz, and the Lakers. Roski did not name the cities.

After 18 months and millions of dollars spent on preliminary work, the developers are anxious to break ground at a site next to the Convention Center once the City Council gives its expected final approval to the deal next month. They say that Wachs’ proposed initiative would lead to an intolerable delay. “If this gets on the ballot, it would be a year to a year and a half before we would know whether we could go forward even if it were to be defeated,” said Harvey. “And if it were passed it would be two to three years before we would know.”

The developers made their comments in an interview two days after Cardinal Roger P. Mahony tried unsuccessfully to mediate their dispute with Wachs. Describing their meeting with the cardinal and Wachs as private, Roski and Harvey would say only that they believed no progress had been made. Wachs would only say that they talked for “a long time.” Mahony, who has taken a position in favor of the arena deal as a complement to his own planned new cathedral Downtown, did not return a call to his office.

Wachs is also coming under intense pressure from other civic leaders to rethink his stance. Steven L. Soboroff, a senior advisor to Mayor Richard Riordan, released a letter that Sun America Chairman Eli Broad sent to Wachs, reminding him that the sports arena is a key part of the “new mosaic” of downtown and expressing hope that it doesn’t “blow up.”

But Wachs said in an interview that he remains adamant that the public should vote on sports facilties that receive public subsidies. “I am going ahead with the initiative,” he said.

The proposed sports arena could be exempted form the initiative only if the city controller and city attorney both certify that it is receiving no public subsidy.

Wachs’ said his staff’s analysis of the pending arena deal involves a public subsidy of about $3 million a year for 25 years.

Most of what Wachs has defined as a subsidy consists of increased sales and property tax revenues generated by the arena, which the pending deal would allow developers to use to help pay off city-issued bonds. They have promised to arrange an independent guarantee that a third-party insurer will repay the full $70 million in bonds if revenues fall short.