Wachs Stiffens Proposal for Vote on Arena

City Councilman Joel Wachs on Thursday unveiled the latest, toughest version of his ballot proposal that would require voter approval for publicly subsidized sports arenas.

To be exempt from a citywide vote, developers of the proposed new downtown arena would have to convince both the city attorney and the city controller that all public money being used for their project would be repaid.

There are two catches for the developers, who say they will pull out of their nearly completed deal with the city to build a $300-million home for the Lakers and Kings if they are not exempted from Wachs’ initiative and it qualifies for the ballot.

The first catch is in the definition of a subsidy. The initiative defines it broadly, so it would include more than the $70 million in city-backed municipal bonds that the developers would use to acquire land for parking lots and that they have pledged to repay.

In addition to guaranteeing repayment of those bonds, Wachs wants the developers to pay for two acres of adjacent, city-owned land, among other items they are slated to receive from the city. City officials had tentatively agreed to throw the land into the deal for free, expressing hope that a new sports arena next to the financially troubled Convention Center would bring needed business to downtown.

The second catch is that the developers would not be allowed to count--as part of their repayment of the city’s subsidy--the extra sales taxes and property taxes that their arena is expected to generate.

Developers have been planning to use these additional taxes--along with anticipated ticket surcharges and parking revenue--to repay the $70 million in bonds.

On Thursday, they derided Wachs’ latest revision as part of a continuing attempt to garner publicity for himself at their expense.

“It’s his third [version] in three weeks,” said L.A. Arena Co. Vice President John H. Semcken III. “We don’t have anything to say in response to him. He’s getting entirely too much attention as it is.”

Wachs has angered the developers by disturbing their nearly completed agreement, just as they are trying to conclude 18 months of negotiations and bring the deal to a City Council vote. “After 18 months, when the structure of the deal has been known broadly to city negotiators, Wachs wants to renegotiate the deal,” Semcken complained recently.

The council is expected to approve the accord, and developers have said they would begin preliminary work digging up utility lines at the site next month.

But Wachs has four months to collect the 62,000 signatures he needs to qualify his initiative for the ballot. If he meets that goal, developers say, they will not go ahead with plans to begin arena construction in January.

They say that having to wait for a popular vote on their project would throw them behind schedule for their planned 1999 opening date and could cripple their ability to acquire the land they need for parking lots. The Community Redevelopment Agency’s authority to condemn the property is scheduled to expire soon.