Getting the sports arena not enough.

Roski, Anschutz are aiming their sights at Convention Center hotel

Developers of a proposed new sports arena near the downtown Convention Center will insist on a deal that includes a hotel and entertainment complex - or they could take their game to Inglewood.

"It's obvious that for the arena to be built downtown we would want to do something more than just an arena," John Semcken, chief negotiator for the developers, said in an interview with the Business Journal. "We don't want to be coy and say we don't, when we do."

Semcken said an architectural firm was retained last week to develop plans for a big hotel and entertainment complex as well as an arena. The chance to develop the larger project is the key advantage Los Angeles holds over Inglewood, he said.

"The downtown site simply offers more opportunity," Semcken said. "In downtown Los Angeles we have the opportunity to do a much bigger project and to have a real impact on the community."

"If we didn't have these future plans, we could go to Inglewood tomorrow," he added.

Semcken's comments were the first clear, public statements by the developers that they would prefer downtown Los Angeles to Inglewood. Even so, Semcken made the point that additional development would have to be part of the deal.

Paul Eckles, Inglewood's city manager, said he continues to talk to the arena developers on almost a daily basis.

"But it's been clear to me for awhile that they want other enticements, other future development possibilities as well as the arena," Eckles said. "People in Los Angeles should be asking themselves how much is the city going to have to spend...$70 million for the arena, $90 million for the hotel and lots of other things like parking.

"Some City Council members there should be asking 'How much of a commitment are we really going to have to make?'"

Developers Ed Roski Jr. and Philip Anschutz, owners of the Los Angeles Kings hockey team, are supposed to make a decision on where the arena will be built by Oct. 15.

The two have proposed a 20,000 seat, $200 million-plus arena either for downtown Los Angeles or in Inglewood near the Great Western Forum and Hollywood Park race track.

In downtown Los Angeles, the arena would be built on land now occupied by the North Hall of the Convention Center that is on Figueroa Street about one mile south of the central business district. The hotel and entertainment complex would be built nearby on land that is now occupied mostly by parking lots and warehouse-type buildings.

The arena would be the new home of the NHL Kings and NBA Lakers, which currently play their home games at the 1967-vintage Great Western Forum.

In the interview, Semcken said the developers are currently working on an environmental impact report for a downtown Los Angeles sports arena that includes possible future construction of a 1,800-room hotel and a 500,000-square-foot entertainment/retail center.

He noted that in addition to sports, the arena could be used for such things as concerts and even political conventions.

But although he said his heart is in the downtown site, Semcken noted that the final decision on the location will be made by Roski and Anschutz - who have not publicly commented on their preferences.

Semcken is senior vice president of Majestic Realty Co. in the City of Industry. Roski is the president of Majestic, while Anschutz is a Denver billionaire who is involved in oil, real estate and other businesses.

The project has been embraced by Mayor Richard Riordan and the City Council, which approved the plan in concept earlier this month. But two City Councilmembers - Joel Wachs and Nate Holden - contend the project will cost taxpayers too much money.

"The plan as presented is legally and morally wrong," said Holden. It is illegal, he said, because it would take public land (the North Hall of the Convention Center complex) and give it to private developers. And it is "immoral" because the public has not had a chance to express its opinion.

This Tuesday, Oct. 1, the City Council is scheduled to vote on a Wachs and Holden proposal to conduct a public opinion survey on the arena plan.

Los Angeles officials have said construction of the arena alone would cost the city between $60 million and $70 million to acquire land for the facility. The land in turn would be leased to the developers for a small fee.

But Wachs has said the arena plan would cost the city up to $280 million over 25 years because of such factors as the cost of issuing bonds and lost revenues due to demolition of the North Hall.

City officials put the costs of an arena, hotel and entertainment complex in the $160 million range, and say that the spin-off benefits of a revitalized downtown area will be well worth the investment.

To cover the public cost of the project, city officials have considered an increase in the transient occupancy tax, also known as the hotel bed tax, from 14 percent to 15 percent.

Les Benson, president of the Los Angeles County Hotel and Motel Group, said hotel operators in the city would be against a "bed tax" increase for an arena alone. But such opposition might soften if the plans are more extensive, he said.

"If you're talking about development of a hotel and entertainment center along with the arena, then I think you might get more support," Benson said. "But just the arena, no, operators would not go along with a tax increase."

For years, the city's convention industry has tried to get a big hotel built next to the Convention Center as a means of attracting more out-of-town business. Many of the events at the center, such as the annual auto show, draw local residents who don't stay in hotels or eat in downtown restaurants.

The nearest hotels are now about a mile away, which has cost the city convention bookings, according to the Los Angeles Convention & Visitors Bureau. The Convention Center underwent a $500 million expansion earlier this decade but so far bookings have been well below expectations.

Semcken said that despite the possibilities, the downtown Los Angeles site poses significant risks to the developers.

"Our downside is tremendous," Semcken said. "We have to look at acquiring a tremendous amount of property, moving a significant number of residences and businesses. We don't know if there were gas stations there that leaked. A lot of things have to be done."

Construction of the arena at the downtown site would also require the relocation of 188 residential units. He said the developers are working on establishment of a special fund that would aid people displaced by the project.