The Man With A Plan
Stadium? Yes. Owner? Check. Now Los Angeles just needs a team
The windowless suite on the second floor of the Pacific Palms, a resort 20 miles east of Los Angeles, is prosaically named the NFL Presentation Room. In this sterile bunker, decorated with maps, charts, schematics, architectural models and a wall-mounted flat screen tuned to the NFL Network, Southern California real estate developer Ed Roski greets visitors and lays out his plan to build a gleaming pro football stadium a few miles down the road, where the 57 and 60 freeways intersect in the City of Industry.
Roski, a 69-year-old former Marine, is a billionaire in the mold of Warren Buffett, folksy and soft-spoken. But he talks about his football palace with an evangelical conviction. This hash-marked Taj Mahal will be revolutionary, unbelievable, incredible -- the stadium against which all others will be measured. It will boast swank suites, a beer garden, a music stage and, this being L.A., a private entrance for celebrities.
But it will also be a place for The People, a 75,000-seat bandbox as intimate as a college stadium, with loads of affordable seats. And it will be green, Roski stresses, invoking today's mandatory buzzword. Air quality, traffic and water run-off have all been taken into consideration, and because the stadium will be built into the side of a hill, it won't require as much steel and other material.
The stadium is the crown jewel of a 600-acre complex that will also house movie theaters, retail shops, a concert hall and maybe even a branch of the Pro Football Hall of Fame. "You could have a rotating exhibit," Roski says. "The coaches' wing one year and the quarterbacks' wing the year after that." Even the $800 million price tag -- which could come down, given the weak state of the construction industry -- sounds reasonable , especially since Roski will use no pubic financing. It's far less than Jerry Jones and munificent Texas taxpayers coughed up for the new (naming rights still available) Cowboys Stadium.
Listen to Roski's breathless description, watch his promotional videos, study the architectural models, and you can't help but envision pro football played on balmy fall Sundays before a backdrop of the San Gabriel Mountains. One vital element, though, is missing.
Los Angeles, of course, has no NFL team.
On Christmas Eve of 1994, the Los Angeles Raiders lost an unremarkable game to the Kansas City Chiefs at the L.A. Coliseum, a stadium that smudges the line between venerable and run-down. An hour or so to the south, in Anaheim Stadium, the L.A. Rams lost to the Washington Redskins in front of barely 25,000 fans, to finish the season 4-12. It would be the last day an NFL regular-season game would be played in the Los Angeles area.
Rams owner Georgia Frontiere, lured by a sweetheart lease on a domed stadium stocked with luxury suites, left Anaheim for St. Louis. Around the same time, Raiders owner Al Davis, frustrated by the parched revenue streams in the Coliseum and by his inability to get his own stadium deal done, ordered his club back to Oakland. "Fifteen years," says Los Angeles mayor Antonio Villaraigosa, is "way too long not to have a team in the second largest [city] in America."
Not that prospective owners haven't tried to bring the NFL back. If you can construct architectural models of football venues, your employment opportunities in Southern California these past 15 years have been plentiful. Since the mid-'90s, scarcely a year has gone by without a local tycoon presenting a plan for a new franchise. The team would play in a renovated Coliseum or the Rose Bowl or a new stadium in Carson or Anaheim or in downtown L.A., next to the Staples Center. Former Dodgers owner Peter O'Malley offered a parcel of land near Dodger Stadium. NFL agent Leigh Steinberg spearheaded an effort to bring a team to Orange County. "There's always been a lot of talk," says Pat Haden, the former Rams quarterback and now a private equity fund manager, "and then it never happens."
There were some close calls. In 1996 the Seahawks were so committed to moving to Southern California that they shipped their helmets and pads to Anaheim. But then a Hail Mary: Seattle gave last-minute assurances of a new downtown stadium, built mostly at taxpayer expense, and Microsoft co-founder Paul Allen bought the team for $200 million, keeping it in Washington.
In the late '90s the NFL announced plans for an expansion team, with Los Angeles the logical destination. Roski spent $6 million preparing the bid and even enlisted Charlton Heston to narrate a presentation to the league. The NFL somehow ignored the Voice of God and awarded the franchise to Houston -- which unlike L.A. had approved public financing for a stadium. "They bid $750 million for the team," Roski says of the Houston group. "We bid $650 but had to come up with another $500 million, minimum, for a stadium. So that settled that."
Meanwhile, in the past decade and a half, numerous NFL clubs have threatened to up and leave for L.A. If a city wouldn't agree to devote public funds to a new stadium, well, there was an obvious place for a team to go. As late as 2006, in his final year as commissioner, Paul Tagliabue vowed that Los Angeles would be an NFL city again by the end of the decade. But no matter how ambitious, the plans never bore fruit. "I tell you, I've been working on this," says Villaraigosa. "I've met with Paul Tagliabue and Roger Goodell. I've met with owners. I've had [some] over to my house for dinner." The mayor sighs in frustration. "It's been an interesting challenge."
League executives are said to worry that an entire generation of fans in Los Angeles has grown up without a home team, and are eager to bring a club back to Southern California. "Absolutely, it's a big and very attractive market, and we'd like to be there," says Eric Grubman, the NFL's executive vice-president of finance and strategic transactions. Then, as if to illustrate why Villaraigosa is so frustrated, Grubman adds enigmatically: "But we see [not being there] as the absence of a plus, as opposed to a minus."
So why has Los Angeles been so long without a team? You'd have a hard time arguing it simply isn't a football town. More than a dozen pro clubs have existed there since World War II, starting with the L.A. Dons of the All-America Football Conference. And that's to say nothing of the USC Trojans and even the UCLA Bruins, whose games draw crowds to rival those of most NFL teams. "People say, 'Well, Los Angeles won't support football,'" Al Michaels said during an NFL telecast on Sept. 20. "That is complete garbage. Fifty-two years ago 102,000 people showed up for Rams-49ers."
True, when the Rams and Raiders were in town, most games fell short of selling out (the Coliseum's official capacity of 92,000 didn't help) and were thus blacked out on TV. And during the 2008 regular season, NFL telecasts posted only a 7.2 household rating in Los Angeles, far and away the lowest of any major market. (New York tracked a 14.9.) Still, given the sheer size of the L.A. market, even that 7.2 share represents more viewing households than New Orleans, Buffalo, Jacksonville and Kansas City combined --and surely the figure would spike if there were a home team. On autumn Sundays, hundreds of L.A. football fans drive south to San Diego to watch the Chargers or even catch a cheap Southwest flight north to the Bay Area to see the Raiders and 49ers.
"The NFL is so big, and the L.A. area is so big, that at least in the beginning, a new team would sell out for sure," says Barry Rudin, who owns the largest ticket brokerage in California, Barry's Tickets. "Ten games? On a Sunday, when the traffic isn't so bad? In a new stadium? No problem. Eventually they'd have to win, but trust me, there are enough NFL fans here."
Of course, there are conspiracy theorists who believe the NFL owners secretly like the vacant L.A. market. It's a stalking horse that comes in handy when they plead for publicly financed stadiums or tax breaks or bond issues. But while some owners do use the threat of relocating to L.A., far more grumble about the revenue lost from having no team in such a large, potentially lucrative market. (The 32 clubs each get an equal split of revenues from television, sponsorships and merchandising; 40% of a team's gate receipts also go into a shared pot.)
The most likely reason for the prolonged absence of a team in L.A.: lack of a modern venue. For years the city's best hope was to upgrade the Coliseum, which was built in the early 1920s. But with each passing year the old place has become more dowdy. As former Browns and Ravens owner Art Modell once told the Los Angeles Times when describing yet another proposal to bring the Coliseum up to NFL standards: "Putting a new dress on an old hooker is not the way I want to go dancing." Now even Villaraigosa is resigned to "updating the playbook," as he puts it, and finding a venue other than the Coliseum, even if means venturing outside the city limits.
It all creates a classic chicken-and-egg quandary. The NFL isn't going to massage the relocation of a team to L.A. until there is a suitable place to play. (Further expansion is not in the plans.) Yet no one is going to shell out hundreds of millions for a stadium without assurance that a team will play there. (In Kansas City the local citizenry earmarked more than $220 million for the construction of an NBA/NHL arena, and the resulting 18,500-seat Sprint Center, teamless, lies dormant save for the odd motivational seminar or rock concert.) "Why would you build privately without a team?" says Mitchell Ziets, a member of the L.A. investment advisory firm Evolution Media Capital. "How do you pay the debt service? It's not going to be with revenue from the building."
The situation is particularly fraught in referendum-happy California, where voters have made it clear time and again that they will not use public revenue to build or renovate stadiums. Even the use of "outsider money," such as rental car taxes, requires a two-thirds majority vote. No coincidence, then, that the NFL's three oldest venues are in San Diego, Oakland and San Francisco.
That's where Roski comes in. He has pursued a suitable NFL stadium at considerable personal cost. He has leased the land from City of Industry, secured the various entitlements and lined up the financing, all private. He's spent more than $10 million out of pocket to undertake an environmental impact report -- required for any major construction initiative in California -- to show that can mitigate the environmental effects of his project. He's vowed to NFL owners that a franchise in Los Angeles will be among the league's top five revenue generators. Already, Roski's employees claim, they've fielded almost 2,000 requests to reserve the 176 luxury suites and almost 40,000 for the 12,500 club seats.
Yet if Roski has gone to great lengths to lay the groundwork for stadium construction, he won't put a shovel into the soil until he is a full or majority owner of a team. He's not undertaking the project out of altruism or to become a leasing agent. Roski, who helped develop the downtown Staples Center, already owns a minority stake of the Lakers -- "I get a good parking spot," he says -- and now he wants to be in what might be the country's most elite circle, the club of NFL owners. "The day I sign a deal, the team moves to L.A. and we start to build," he says.
But which team? Take a look around the league at teams seeking new stadiums or struggling with attendance. Roski's group has targeted candidates that include the Jacksonville Jaguars, San Diego Chargers, Minnesota Vikings, Buffalo Bills, Oakland Raiders and, in a bit of grid-irony, the St. Louis Rams, who've hired Goldman Sachs to solicit potential buyers and evaluate bids.
For all his experience as a real estate developer, however, Roski has suffered some setbacks. The recent economic downturn reportedly dropped his net worth by $1 billion (to $1.5 billion) and wreaked havoc on his business estimates. Asked, for instance, which company might pony up eight figures for stadium naming rights, he concedes, "That will be a challenge." Plus, Roski says, he has had to "compensate" (read: buy off) communities bordering City of Industry for costs and inconveniences caused by the stadium. Earlier this year he agree to cut a check to the city of Diamond Bar for $20 million for "impact" in exchange for the city's promise not to challenge his EIR.
Roski was less acquiescent to the city of Walnut, whose wish list came to tens of millions of dollars and included a new banquet facility and aquatics center. (Walnut vowed to go to court to stop any stadium construction in City of Industry.) Recently the two sides reached an agreement through mediation. Roski's group would make a one-time payment of $9 million to Walnut and contribute an annual six-figure fee to cover costs, such as additional police, incurred because of the new stadium.
The final bureaucratic hurdle appears to have been cleared last week when the California Senate approved a one-time environmental exemption for the stadium, circumventing a lawsuit filed by eight Walnut residents. Governor Arnold Schwarzenegger was expected to sign the bill sometime this month. Roski's group says it will begin actively courting teams in February, after the Super Bowl.
It's ultimately up to the other NFL owners to approve a sale to Roski, but the league office can certainly facilitate the process. And if the NFL once dismissed Roski's Los Angeles Stadium Project as the quixotic ream of a billionaire, it now takes the developer seriously. "Ed's an extremely capable guy, good businessman, good developer -- he has a lot of things going for him," says Grubman. "L.A. is a big, attractive market, and we don't trifle with it. We want to be there, but we don't want to artificially push it across the finish line."
Which is fine by Roski. "Look, they're not going to fail three times here," he says. "They're not coming until they have the perfect deal. Well, this is the perfect deal."
Jon Wertheim can be reached at email@example.com