An early score in the game of returning NFL to L.A.
The pieces appear to be falling into place for an NFL stadium in the city of Industry, but does that mean a team is on its way?
Los Angeles developer Ed Roski Jr. cleared a significant legal hurdle this week when the city of Walnut agreed to drop a lawsuit intended to block the plan.
Here are some answers to the most pertinent questions about where the league is on the issue of returning to the nation’s second-largest market:
Does this mean an NFL team is coming to Los Angeles?
No. It’s another step in that direction. There is still a long way to go until that becomes a reality.
What does it mean?
Roski’s site has a significant jump on any potential competitors, because even when the process is frictionless -- and it never is -- an environmental impact report takes at least a year to complete, and usually at least two.
These things weigh heavily in Roski’s favor: He controls the site, is working with a cooperative city and has cleared the runway of the last significant legal roadblocks.
So what now?
Assuming he has the stadium financing plan in place, Roski needs to go out and convince an existing team that relocation is the way to go.
What’s the big question for an owner considering such a relocation?
It boils down to this: Is the cost of privately financing an $800-million stadium, giving up a piece of your team and possibly paying a large relocation fee better than what you have now?
That’s the leap of faith someone will have to make.
Which teams are most likely to relocate?
San Diego is the front-runner because the Chargers have a window each year to get out of their Qualcomm Stadium lease without the threat of a lawsuit. They also want a new stadium and haven’t been able to get one done there.
Jacksonville can’t get out as easily, but the Jaguars are in a dire situation. Even when they tarp thousands of seats, they can’t sell out their games. Others who potentially could relocate down the road are Minnesota, St. Louis, Buffalo and Oakland.
Will the league create a new team for L.A.?
No. Expansion is off the table, and not because the league likes its current format of eight four-team divisions. It’s because owners don’t want to slice the financial pie 33 ways. Thirty-two is plenty for them.
Why can’t a team just pack up the moving vans and go, regardless of what the league says?
If it wants to play in a new stadium -- the only way it would move -- that team would need the support of the NFL, because the venue’s financing plan would require help from the league in the form of loans, multiple Super Bowls and other financial assistance.
Roski says he wants to own a piece of the L.A. team. Any problems with that?
Currently, yes. He owns a casino in Las Vegas and would need to sell that to become even a minority owner of an NFL team. He says that won’t be a problem. That said, it’s far from the best time to sell one of those.
What’s more, Roski is not offering to pay cash for a team. Instead, he’s proposing to trade rights to development in Industry for a minority stake.
Any NFL owners willing to sell all or part of their teams want cash, not development rights in Industry, especially in this depressed real estate market.
The economic downturn has hurt just about everybody. Are there any upsides for the NFL-to-L.A. movement?
Believe it or not, yes. Construction costs are cheaper, interest rates are down, and there might even be some stimulus dollars out there for a mega-project such as this. Also, if you’re going to privately finance a stadium, it makes more sense to do it in a big market than a small one. Some of the smaller NFL markets are hurting now and might not be able to make the same contributions to their teams that they have over the last 20 years.
Are there any specific advantages of the Industry plan?
Here are two biggies: Roski can move on it right away, something no other potential site in Southern California can do; and he says the cost will be significantly cheaper because of the way the land is contoured, allowing the stadium to be built into the hill. That means much less steel and concrete. He estimates he can build a state-of-the-art venue for $800 million, roughly half of what it’s costing the Giants and Jets.
What are some of the unknowns that make moving forward on one of these deals a big roll of the dice?
Two immediately spring to mind: the NFL’s collective bargaining agreement, and naming rights.
First, the CBA. Players want more money, and owners already feel they’re paying too much. That could lead to a work stoppage after the 2010 season if the sides can’t work out a new deal. Would you want to build a stadium if you didn’t have a clear picture of what your finances are going to look like from year to year? And what if there were a lockout or strike? How do you pay the bills if you can’t guarantee there will be football to watch?
That will all be solved eventually, but for the moment it’s a question mark.
Next, naming rights. Those are a major part of any stadium financing plan. The Dallas Cowboys don’t have a naming deal for their new stadium. Neither do the New York Giants and Jets. For that matter, neither does the L.A. Coliseum. That uncertainty is very significant.
For years, the league would loan teams up to $150 million to help pay for new stadiums, but that so-called G-3 program is over. Would Industry get one of those loans?
Possibly, but there’s no guarantee. The reinstitution of the G-3 program will be one of the major issues in the CBA negotiations, and no one has a crystal ball on that one.
Roski says every other viable location in L.A. has been explored and dismissed, making his the last site standing. True?
Not necessarily. There might not be another workable site with an open 600 acres for a stadium, parking and an ancillary retail development, but the footprint for a typical NFL stadium is fewer than 20 acres. The question is: Will a team owner see it as essential to have all the surrounding bells and whistles for a team playing in a stadium 10 times a year? Maybe so, but lots of successful franchises don’t have that.
Also, with the cost of real estate dropping, other L.A. sites that might have been too expensive before might now fall into the league’s price range.
Remember, the NFL adheres to that old real estate standard: Location, location, location. It isn’t going to rush a team to Industry if there’s a strong feeling it’s too far removed from the Westside. A lot of NFL owners still need to be convinced that there’s big money all over L.A., and not just from 90210 to the ocean.
So is it possible that other L.A. options will pop up before a deal is done in Industry?
Bet on it. That’s the way it always goes here, and it’s what the NFL wants. It wants options, and the ability to leverage one site against another to get the best deal. That’s why the NFL never drives a stake through a deal and proclaims it dead. Look how many times the Coliseum has climbed out of the grave.
Two potential locales that could come back into play in the coming year or so: downtown L.A. in the vicinity of Staples Center, and Carson -- both of which have come and gone before.
In football terms, what just happened?
Roski’s team scored a big touchdown. Don’t be surprised if this game goes into overtime.
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