clock menu more-arrow no yes mobile

Filed under:

Financing Problems Hindering City of Industry's Stadium Plans

With the city of Los Angeles moving full speed ahead in an attempt to return the NFL to area, the city of Industry is having problems with their proposed stadium that has been in the works for over two years now with little progress to show for it. 

Former Governor Arnold Schwarzenegger gave the stadium's proposed location an environmental exemption that was to pave the way for the beautiful stadium's construction, though little to nothing has been done with it since. But as in most cases it's not a problem of want when trying to get a stadium built but rather one of need as the project is in desperate need of financing to stay afloat. 

Virtually every new sports venue in the country receives some form of public financing. California historically has been unwilling to provide public financing, so Los Angeles has had to find a way to privately finance a stadium. Since the Raiders and Rams left Los Angeles 16 years ago, 22 NFL stadiums have opened and five others have undergone major renovations. Approximately 50 percent of the funds used on these stadiums were provided by public sources, according to Conventions, Sports & Leisure International.

There lies the rub; who's going to pay for all this?

Majestic Realty Co. is undertaking this project, lead by president Ed Roski and vice president John Semcken, who originally planned back in 2008 to build their 75,000-seat open-air stadium, with Roski owning a stake in whatever team came to LA. Unfortunately for Roski and Majestic Realty the Anschutz Entertainment Group (AEG), created their proposal for Farmers Field, a 70,000-seat retractable-roof stadium in downtown Los Angeles. Roski helped build Staples Center with AEG, and owns shares in the Lakers and Kings with Anschutz, and is now essentially left to compete for public funding with AEG and Farmer's Field. 

Roski's timetable of completion and percentage of ownership (looking for about 30%) he wants of whatever team comes to LA make it difficult for a team to commit to Industry right now.  Here's John Gillespie, expert on stadium financing:

There is a chicken-or-the-egg problem with [Roski's] plan because no team would agree to move for something that is uncertain and speculative. If you're sort of backing into numbers that aren't based on experience elsewhere, I would think most teams aren't going to buy in to it to begin with because it leaves them ultimately responsible if it doesn't materialize, especially if they own a majority of the stadium.    

Despite all the gorgeous renderings and environmental exceptions for the stadium, Farmer's Field and a lack of financial support may ultimately kill Industry's stadium project, but only time (and money) will tell. 

For more on this situation, read more here