CITY, KINGS EDGE TOWARD ACCORD.

Byline: Rick Orlov Daily News Staff Writer

Negotiators for the city and the Los Angeles Kings are said to be close to reaching agreement on a proposal to build a $240 million sports-entertainment complex in downtown Los Angeles, officials said Thursday.

But the final point is one the city sees as crucial in ensuring the $600 million in bonds sold to build the Convention Center remain tax free and attractive to investors.

``We wouldn't do the deal if we can't keep the tax exemption,'' said Gerry Miller, a financial specialist in the City Administrative Office. ``We are looking for a way to structure this so the tax exemption will not be impacted. If we can't get there, we can't do the transaction.''

The city now pays $41 million a year on those bonds and the tax exemption allows them to have lower interest payments.

Miller said attorneys were looking at federal tax codes to determine if the bonds can remain tax exempt. They are examining whether using part of Convention Center property for private development could cost the city its tax-free status.

Kings owner Edward J. Roski and investor Philip Anschutz have proposed building a 20,000-seat arena on the site of the North Hall of the Convention Center. As part of the deal, the city would turn over that property for the arena, serving as home for the Kings and Lakers, and also acquire property across from the Convention Center.

Negotiators said they are hopeful to complete the talks by this weekend, with a package to go to the City Council by next Friday.

At the same time, however, Councilman Joel Wachs released a packet of reports questioning the value of a downtown sports arena.

Wachs, who has been fighting the proposal along with Councilman Nate Holden, sent the packet to each council member saying he hoped it would ``help you separate myth from reality when you determine whether the benefits of an arena justify spending more than $300 million of taxpayers' money over the next 27 years.''

The councilman also provided a list of economists who have studied downtown arenas and found no evidence of their improving their immediate areas.

Among these were Robert Baade of the Department of Economics and Business of Lake Forest College in Illinois.

Baade, in testimony before Congress in 1995, said he believed that professional sports was ``an insignificant part of a large city's economy.''

Supporters of the arena, however, have argued the sports-entertainment complex is only part of an initial development that eventually would include a hotel and commercial development to draw tourists and more conventions.