Los Angeles City reaches deal with AEG re NFL Stadium
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07-30-2011, 01:19 PM
Couldn't Be Happier!
Join Date: Mar 2005
Location: Lake Forest, CA
Originally Posted by
Buddy The Elf
While I don't know the detail behind all of it (I've read posts by Diehard about the bed tax but please share), I'd have to imagine that the City was willing to forego some tax revenue for somebody willing to risk billions of dollars on revitalizing the dump that was Downtown LA. Is the tax exemption permanent? They did create jobs too. Just playing devils advocate..
Here's a story on the bed tax money that AEG gets to keep:
In another article, the price of building the Mariott was said to be approximately $600 mil, so the city gave them nearly half the cost of the hotel ($270 mil) plus gave AEG a $70 mil loan paid off over 25 years by a tax on tickets to events at Staples.
Here's another issue - Before the location of Staples and the surrounding redevelopment had been announced, the City of LA created all of the land for these projects - 27 acres in total by having the Community Redevelopment Agency (CRA) seize these properties through eminent domain. The property owners were forced to sell their properties to the CRA at an incredibly low market value compared to what they would be worth once AEG's projects were announced. The CRA then turned around and sold them all to AEG for those low prices.
While I understand that these kinds of moves are necessary for the benefit of the public (i.e. to add or widen a freeway), it's another thing to have the government essentially seize private land so that a corporation can profit. To add insult to injury, AEG didn't have plans to develop all of the land themselves. They have sold off at least 3 of the parcels to other companies for their projects. Needless to say, AEG didn't sell the land at the price that the private landowners were forced to accept when their property was seized. They made a VERY healthy profit on those transactions - and the former owners got to stand by and watch.
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