As one of Latham & Watkins’ top land-use attorneys, George Mihlsten spends a lot of time maneuvering his way through the city’s inner political circles.

And when Mihlsten attends a City Council meeting, the politicians tend to listen. That’s not surprising, since his clients include the likes of DreamWorks SKG and Ed Roski Jr. and Philip Anschutz, developers of the planned downtown sports arena.

The proposed $250 million sports and entertainment complex which will be home to the L.A. Kings and Lakers was tentatively approved by the Los Angeles City Council last January. A final development agreement is expected to go to the City Council this month, and Mihlsten will be the man charged with shepherding it through the approval process.

Question: What are the main selling points for the sports arena that you’ve used during negotiations?

Answer: Obviously, we have focused on trying to put the arena project in the city of L.A. We designed it for entertainment as well as for sports, with the goal to have between 225 to 250 events a year that would bring 15,000 to 20,000 to downtown. It will create a sense of place downtown, and ongoing revenues for the city. It is a task which is going to take a great deal of cooperation with the city and the venture. It has been a process where the parties have worked extremely well together we are getting very close.

Q: Tell us the timeline and process that the arena must go through before construction can begin.

A: The environmental report is on the street now. Following the council’s approval of the memorandum of understanding, we’ll then move on everything from a ground lease, development agreement, to a variety of other documents to make this a reality. Then, the parties need to get their financing put together, and that will be a Herculean task to get a lender on board. We think that will come together very nicely, and we hopefully will be under construction by the late fall. We want to be open September of 1999 but it’s getting tight. The city is moving with all deliberate speed to help us meet that timetable.

Q: Are there any obstacles still ahead that could jeopardize the project?

A: There are still a number of major issues that need to be resolved over the next weeks and months. Given the air of cooperation that we see, we are hopeful things will be worked out. All the documentation that needs to be done is a huge hurdle. With every document there are issues that have to be resolved between the parties. There are a lot of mechanics that go into a deal like this, including public hearings.

Q: Can it be completed on time?

A: Time is a critical component here, and has been for the entire process to make sure we are positioned to get underway with construction late this fall. Within the last few weeks, we have focused our energies here in L.A. We want to see it completed here it’s our priority. But time is the critical function. We are very pleased with the timelines in which the city is moving forward. They are working hard to keep us on the schedule that we need to be. At the moment, things appear to be on track.

Q: What about the possibility of having a retail center and hotel space?

A: We are not asking the city to approve, at this point in time, the hotel complex. We’ll prepare a master plan after the MOU is approved, which should happen fairly quickly. One of the key hopes here is to create retail and hotel space, but we are a long way from creating that reality. Our goal is to create a mixed site with the arena. The synergy between the Convention Center and the arena will be tremendous. We already have heard from organizations that want to consider L.A. for conventions once the arena is built.

Q: Has any progress been made in securing financing?

A: We’ll talk to a number of lenders during this process, so that will take several months. The lenders will not be in place until the August or September time frame. There is a lot of paperwork involved with every step to this massive deal. It takes a lot of incredibly boring but necessary work to get the ship launched. It’s like trying to get a large elephant off the ground, and all you’ve got is a bamboo stick.

Q: The Sports Arena isn’t your only project. What other clients do you have?

A: We have a lot on our plate. We’re working on the Universal Studios master plan. We have also just completed work on the Disney Resort in Florida. We’re working on Pepperdine University’s master plan, and other projects around the city. We’re also involved in a number of major energy issues involving Southern California doing a lot of work with Southern California Edison with regard to deregulation and the emerging power markets. We’re also working on the DreamWorks SKG project, including their animation campus in Glendale that’s already under construction.

Q: What is Universal City’s status?

A: The project has just started the hearing process with the county. Universal has both the benefit and detriment of being located in two different jurisdictions one third in the city and two thirds in the county. We are trying to work out a process to approve the master plan that addresses problems for both jurisdictions. I think the challenge is now to respond to concerns that have been raised and address them in a meaningful way. We will be coming back in the next 60 days to the county with the applicants’ response to the issues that have been raised. By early summer, we hope to be before the regional planning commission for its determination on the matter, then to the board of Supervisors by early fall and then we’ll proceed to the City Council.

Q: How important is the passage of the new master plan to the regional economy?

A: Tourism and entertainment are the largest industries in the state of California today keeping Los Angeles as a major tourist destination and as the center of entertainment is critical. Universal has both entertainment and tourism functions, and so being able to address those at the same time is very important.

Q: How complicated is the DreamWorks SKG project in Playa Vista?

A: I am relatively optimistic that within the next 30 days a package will be put together that everybody can live with, but like any real estate transaction there are going to be hurdles. Is it taking a long time? Everything takes a long time. There’s a lot of parties to satisfy lenders to deal with, Maguire Thomas and his partners to deal with, there’s DreamWorks, and new investors. So you can see that there are a lot of parties to bring to the table.

Q: What stands in the way of its completion?

A: I am very confident that it will work itself out. It’ll be great to have the first major new studio in the past 70 years built in L.A. It’ll energize the digital computer industry which is beginning to burgeon on the Westside. This will be the birth of major new opportunities for L.A. But what I find amazing is the amount of time that is given to a number of environmental issues. The project has nothing to do with the wetlands, which is on the eastern end of the property and completely unrelated to the project. The major wetlands issues are going to be addressed in Phase Two, for which environmental reports haven’t even been prepared yet. I find it somewhat ironic that the couple of groups that have chosen to engage on this issue have not instead focused on the fact that it’s a Phase Two project, and not a Phase One. Instead, they’ve chosen to try and kill a project that will bring benefits to Los Angles. I don’t get it.


George Mihlsten

Company: Latham & Watkins

Position: Partner

Born: Houston, Texas in 1953

Education: B.A., business administration, University of Southern California, 1977; jurisprudence degree and master of business administration, USC, 1980.

Hobbies: Skiing

Personal: Married, three children.

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