ARENA PLAN GOES TO COUNCIL; PANEL GIVES PROPOSAL ITS STAMP OF APPROVAL.

Byline: Rick Orlov Daily News Staff Writer

A proposal to build a $240 million sports arena in downtown L.A. was sent to the full City Council for consideration after receiving approval Wednesday from a city panel studying the controversial deal.

With a 5-0 vote, the Ad Hoc Committee on the Los Angeles Arena recommends that the council approve a memorandum of understanding to build the 20,000-seat facility to serve as the new home of the Los Angeles Lakers and Kings.

The council is scheduled to consider the matter Friday.

``Los Angeles needs its own teams and its own arena,'' Councilman Richard Alatorre said after the action. ``These teams belong in Los Angeles and not Inglewood.''

The proposal from Kings co-owners Edward Roski Jr. and Philip Anschutz calls for developing the new arena on the site of the North Hall of the Convention Center with the goal of being open for the 1999 season.

Under the terms of the proposal, the city would put $70 million up front - most of it through a bond issue - to demolish the building and acquire adjacent property. This property would be used for parking initially and, it is hoped, the eventual construction of a hotel to service the Convention Center.

Initial plans also call for a commercial-retail development to take advantage of what developers say will be more than 200 events a year, including concerts, ice shows and other events in addition to the hockey and basketball games.

Roski said he also has been contacted by entertainment firms interested in becoming involved in the development, which he has said could revitalize the entire area around 11th and Figueroa streets.

But Councilwoman Rita Walters, in whose district the project would be located, said she remains concerned over whether the city's $6.8 million in costs to pay off bonds would be covered under the agreement.

``What happens if this is a bust?'' Walters said. ``We'll end up with a vacant building.''

But city officials said they were convinced there would be enough money generated to cover the costs and even yield a profit to the city.

The memorandum estimates the city will receive parking revenue of $1.3 million and $1.5 million in additional sales tax. Roski-Anschutz have also agreed to a ticket surcharge bringing in $3.5 million a year.

``We used the most conservative of figures and only on the Kings and Lakers games,'' City Administrative Officer Keith Comrie said. ``We believe the city costs would be covered.''

George Mihlsten, attorney for the developers, said he believes there are substantial protections for the city.

``This is a good deal for us and a good deal for the city,'' Mihlsten said. ``We believe everyone wins from this.''

The memorandum is only the first formal step in the process. The City Council also must approve an environmental impact report on the project and a final developers agreement. Both are expected to be submitted this summer.

Councilmen Joel Wachs and Nate Holden, who have been critical of the plan, said they continue to oppose it.

``We still have no guarantees,'' Wachs said. ``Nothing has changed from when this was first proposed. The city has all the liability.''