ARENA TALKS DEAL WITH LIABILITY ISSUES.

Byline: Rick Orlov Daily News Staff Writer

Los Angeles city officials told their negotiators on Wednesday to continue to press developers of a proposed downtown sports-entertainment complex to accept greater liability for problems that could arise.

During a closed-door session of nearly three hours, officials said the council is concerned about who would be responsible for cleaning up underground toxics and asked what would happen if the Los Angeles Lakers or Kings are sold or the arena is not successful.

The council is scheduled to hold another closed-door session next Wednesday when negotiators return with answers to their questions.

Councilman Joel Wachs, a leading critic of the proposal, said he is pleased with the deal's progress, including an offer by the developers to reimburse the city for $70.5 million in upfront costs.

``The deal is substantially better than when we started, so we are making progress,'' said Wachs.

The councilman said there are still significant risks to the city that aren't acceptable but added he couldn't go into detail.

``I'm going to keep fighting to get the guarantees we need to make the taxpayers whole,'' he said. ``I know it can be done.''

Kings owner Edward Roski Jr. and Denver investor Philip Anschutz have proposed building a $240 million, 20,000-seat arena on the site of the North Hall of the Convention Center as a home for the hockey team and the Lakers as well as an entertainment facility.

The city would have to advance up to $70.5 million to tear down the North Hall and acquire property across the street for a parking lot and also potentially for a hotel-commercial complex.

To counter objections of Wachs and Councilman Nate Holden, Roski and Anschutz have said they would cover the city's cost through some type of facility fee.

``We have what we think is a very good deal for the city,'' said John Semcken, senior vice president of Roski's Majestic Realty Co. and the project manager. ``This is a complicated transaction, and we understand the council needs more time to study the issue.''

Semcken said he believes agreement has been reached on the issues raised by council members.

``The teams are obligated to play in the building for 25 years,'' Semcken said. ``As for toxics, if it's on city-owned property, the city should be liable for any costs.''

The North Hall once was the site of a Department of Water and Power substation, and there is concern that chemicals may have leaked into the ground.

City officials, however, don't agree they should be responsible for any cleanup.

Originally, Roski had hoped to have a deal signed by Oct. 15. Council President John Ferraro said there might not be an agreement until after Jan. 1, because of the upcoming holidays.

``That's a reality of the calendar,'' Semcken said. ``It's unfortunate, but we understand it.''

Ferraro said he was pleased with the session in that it enabled council members to learn more about the status of the talks and the work of the city negotiators.

``There were a lot of questions from the council members, and now we can have our negotiators explain the concern to the developers,'' Ferraro said.

The councilman also defended holding the discussions in private.

``These are negotiations and we don't want the other side to know how far we're willing to go,'' Ferraro said. ``We will have public hearings once we have an agreement that we can make public.''

But Wachs and Holden said they will push to open next week's session.

``There are only a few sensitive points,'' Wachs said. ``Most of this is dealing with public policy, public property and public money. Everyone knows about this deal except the public. That's why we should have this debate in public.''