CITY OKS DEALING FOR ARENA : COUNCIL TO COURT THE KINGS.

Byline: Rick Orlov Daily News Staff Writer

The Los Angeles City Council on Wednesday agreed to seek a deal with Kings hockey team owners Edward J. Roski and Philip Anschutz to build a $250 million downtown sports-entertainment complex.

The 13-2 vote approved the key points of a memorandum of understanding that could bring the Kings and the Los Angeles Lakers to a new downtown arena perhaps as early as the 1999 season.

Several council members raised concerns about the $70.5 million in public debt that would be incurred as the city's part of the deal. But the council majority expressed hope that the project would revitalize a key part of downtown and lead to a bonanza in new property tax revenues.

``There is a lot of talk about the risks of proceeding,'' Councilwoman Ruth Galanter said. ``I think we should also look at the risks of not proceeding. Downtown is now a shortfall because it isn't producing revenue. Our risk of doing nothing is seeing that shortfall continue.''

It was not immediately clear whether Roski and Anschutz, who also are negotiating with the city of Inglewood for a new arena, would accept the deal.

John Semcken, vice president at Roski's Majestic Realty Co., said he was pleased with the council action and looked forward to moving ahead with the project.

``If things go well, we would hope to break ground before the end of the year to be able to open by the 1999 season,'' Semcken said.

However, he added, the developers are continuing their discussions with Inglewood in case new problems develop with Los Angeles.

Inglewood City Manager Paul Ickles said talks with the venture have been accelerated in recent weeks, and he expects them to make a decision within the next two months.

``We understand they are trying to work through to get the best deal,'' Ickles said. ``I'm sure Los Angeles wishes, as we do, that we were the only ones at the bargaining table.''

Under the proposal approved Wednesday, Roski and Anschutz would build the 20,000-seat arena on the site of the North Hall of the Convention Center, which the city would turn over to them for $1 a year.

The city would be required to spend $70.5 million to tear down the North Hall and acquire property through the Community Redevelopment Agency and its power of eminent domain to serve as additional parking for the arena.

It is hoped that land, eventually, would be turned into a hotel and commercial development to serve the Convention Center.

The proposal to use the North Hall site was first announced last summer and has been subject to a contentious series of negotiations and public pronouncements.

Frustration on the part of the venture grew so bad that they told the city last month they were done with negotiations.

However, council President John Ferraro was credited with getting the talks moving again with a letter he sent to Roski and Anschutz that dealt with the remaining issues.

``It should not be lost on anyone the importance John Ferraro played in this,'' Councilman Mark Ridley-Thomas said. ``This was absolutely dead. Dead. He revived it.''

Ferraro downplayed his role, other than to say he met with several council members to convince them of the importance of the project.

``You have to keep asking, what would happen if nothing is done,'' Ferraro said. ``We would lose jobs. We wouldn't have a new facility. We wouldn't have the potential of all this other development.''

Most of the City Council majority praised the deal for what they hoped it would mean to the downtown area.

``On a radio show, I heard a Westside resident call in and challenge this whole idea of why we should invest in downtown Los Angeles,'' Councilman Mike Feuer said. ``That's a challenge we need to address because we are at a turning point.

``Will we take this effort to make this city work? Without a vibrant downtown and this arena that can serve as a symbol that we can revive the cUenter for the second-largest city? We can choose to let downtown to continue to erode or we can choose to make downtown sparkle again.''

Councilmen Joel Wachs and Nate Holden dissented, saying there was no guarantee the city would be repaid the $6.8 million a year needed to cover the public debt on the bonds.

``This is definitely not the best deal the city could get,'' Wachs said. The deal includes provisions for a ticket surcharge tax and other revenues to cover the debt.

The council action allows attorneys for the two sides to hammer out a memorandum of understanding, that also is subject to council review. After environmental studies are completed, a final agreement will be developed. That is expected to take four or five months, officials said.

KEY ELEMENTS OF ARENA DEAL

Following are the major features of the deal for the proposed sports arena-entertainment complex approved Wednesday by the Los Angeles City Council:

THE DEVELOPERS

Build a 20,000-seat arena, including 150 luxury boxes and 2,500 box seats to open in 1999. Cost estimated at $240 million.

Require the Los Angeles Lakers and Kings to play home games at arena for 25 years.

Have seven years to develop neighboring sites for a hotel and commercial development.

THE CITY

Turn over the land where the North Hall of the Convention Center now sits after demolishing the building.

Acquire adjacent property for parking at first and the hotel complex later.

Relocate 46 businesses and residents in 188 units to improved locations.

Float bonds to cover city costs which are capped at $70.5 million.

THE DEBT

Tax revenue to cover bond costs:

Property taxes estimated at $1.3 million.

Parking revenues estimated at $1.6 million.

Ticket tax estimated at $3.5 million.

CAPTION(S):

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Box: KEY ELEMENTS OF ARENA DEAL (see text)