arena

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To developers of the new downtown sports arena, the just-concluded struggle to win City Council approval of the $300 million project was merely the opening face-off in a game that could go into overtime.

The arena’s developers must now scramble to sell suites, line up sponsorships, resolve lawsuits and relocate residents and businesses off adjacent land that will be converted into parking lots.

All that must be done in the span of just a few months.

“Now we have to do what is traditionally the hard part,” Los Angeles Kings President Tim Leiweke said last week.

Despite the delays in winning council approval, Leiweke said developers are still shooting to open the new arena in October 1999 to coincide with the beginning of the hockey season.

“That’s still our goal, but we have to be realistic,” Lieweke said. “Any delay will push it back.”

The arena’s developers City of Industry developer Edward P. Roski Jr. and Denver billionaire Philip Anschutz, owners of the Kings must now solidify agreements with suite owners and sponsors in order to acquire money to build the arena.

They plan to sell 160 suites for between $150,000 and $200,000 apiece annually, which would net the developers between $24 million and $32 million in the first year.

Leiweke said they could probably sell 50 suites now, based on interest received so far. But selling the remaining suites might be a challenge.

“I think we’re still going to have to work hard to sell suites,” he said.

Another, more ticklish problem, he added, is determining who gets the choice suite locations. The arena developers, he said, don’t want to assign the suites until they have a better idea which companies and institutions are interested.

The arena’s developers also must sign a deal with a sponsor for the arena. The developers are in talks with office supplies superstore chain Staples Inc. to sell naming rights to the Westboro, Mass.-based company for $100 million, but Leiweke said that deal has yet to be finalized.

“We won’t deny we’re talking to Staples, but we don’t have a deal,” Leiweke said.

He added that the sponsorship deal must be made before construction gets underway, so that the design can accommodate the name.

“We’ve got to come out of the chute with that name,” Leiweke said.

The developers also are starting to line up non-sporting events for the arena in hopes of keeping it busy 300 nights a year. Rock concerts, circuses, the Grammy Awards even national political conventions will be sought for the facility, Lieweke said. Showcase events like the NBA All-Star Game, he noted, are booked years in advance.

“We’re going to go and fight for those national events,” he said. “We’re now anxious to go to war with cities like New York. We’re going to bring them back to L.A.”

While all those tasks fall to the arena’s developers, city employees will be busy on another front.

The Community Redevelopment Agency has the responsibility of relocating residents and businesses at sites surrounding the arena. Using its eminent domain rights, the CRA will buy those sites so they can be converted into parking lots for the arena.

Once the developer’s funds are in place, the CRA will start the process of land acquisition, said Celie Stanford, the CRA’s real estate acquisition/relocation manager.

“Probably end of December, first of January, we are looking forward to being in a position to really start the activity of assembling the land and relocating the people,” Stanford said.

The CRA’s estimated cost to relocate the residents and business owners excluding the actual cost of land acquisition is expected to be around $7 million. That money will be used for CRA staff time on the project, the hiring of real estate and equipment appraisers and other costs of relocation.

The cost of land acquisition will depend on how much the land is appraised for, but the CRA is limited to spending $88.5 million $58.5 million in city-issued bonds, $12 million from the CRA itself and $18 million from the developers for the entire process of land acquisition and relocating businesses and residents.

The CRA and the developers also have to contend with a couple of outstanding lawsuits including one brought by residents of the Pico-Union area west of the arena site that challenges the city’s environmental impact report.

“They’re claiming that the arena is going to generate traffic through their neighborhood,” said David Riccitiello, the CRA’s sports arena project manager. “So they’re claiming that the EIR is not adequate. We have to deal with the lawsuit.”

The lawsuit could derail the project if it prevents the developers from securing financing, although unless that happens, the CRA will be able to go ahead with its land acquisitions, Riccitiello said.

Meanwhile, although the CRA has yet to speak with owners of the 167 residences and 33 businesses in the arena area, a group of business owners already has hired a consultant to represent them during the relocation process.

Randy Nielsen, a consultant with Burbank-based Redevelopment Consultants of America, said he has been working with five clients in the area for several months, and that he is expecting several more business and property owners to sign on with the firm soon.

“Everybody that we have dealt with wants to keep their business they want to be relocated,” Nielsen said. “Obviously they’re concerned. They want to be viable.”

Kun Kim, owner of Color & Copy, a print shop on Olympic Boulevard north of the arena site, said he is concerned about the cost and time associated with relocating.

“If I move, I have to pay two and a half times as much (rent) as I pay right now,” said Kim, who has owned the business for close to four years and has hired Redevelopment Consultants to help him with the move.

“I spent almost six months to set up this location, and now I have to go through that again,” Kim said.

Yousef Geris, owner of Aaron’s Liquor, also located on Olympic, said he is unhappy he has only heard about his need to relocate from news reports and neighbors, but not from the CRA itself.

“It’s better to contact us soon,” Geris said, adding that his livelihood depends on income from the store, which he has owned for three years.

Stanford of the CRA said the agency is required by law to pay property owners the market value for their property. In addition, it must either pay business owners for their equipment or help them relocate it, and help businesses through the relocation process.

“We assist them in whatever they need in order to reestablish them at the new site,” Stanford said.

In addition, the CRA often helps relocated businesses with such tasks as obtaining new conditional use permits.

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