Next challenge for Coliseum rehab project: finding the money.

NFL owners want more financial details on plan

Supporters of a plan to revive the Los Angeles Memorial Coliseum as a viable home field for professional football will begin scrambling this week to come up with a financing plan to renovate the site.

National Football League team owners have expressed some interest in a city-backed proposal to completely gut the Coliseum and build a new stadium within its shell. However, the biggest obstacle facing Coliseum officials is how they will pay for the estimated $229 million of construction costs.

The financing package pitched to the NFL's stadium committee during meetings last week in New Orleans is speculative at best, one NFL official said. The city has been asked to provide more details on the plan in a meeting scheduled for March.

"The leadership and unity that was displayed on behalf of Los Angeles was very encouraging. ... The momentum is there," said Greg Aiello, a spokesman for the NFL. "However, there are some serious remaining issues that include financing, parking and public acceptance of this project. We still don't know exactly how this will be paid for."

A preliminary financing package pitched during the meeting last week relies heavily on the sale of personal seat licenses, private-sector investment, new taxes generated from the project, and the sale of club seats.

However, funds identified from each of these projected revenue streams still leave the plan about $100 million short. City officials hope this amount would be borne by a team owner or investors - thereby eliminating the need for investing public funds into the project.

City Councilman Mark Ridley-Thomas, who presented the Coliseum proposal to team owners last week, said the key now is to lure a potential team to Los Angeles. Once an expansion franchise or existing team commits to Los Angeles, a solid financing plan could be developed.

"Many of the owners said we are off to a good start, and they want to see us through this," said Ridley-Thomas. "We want this to be a good business deal. ... This isn't a charity mission. ... We want a successful scenario for all stakeholders involved, not the least of whom are the fans in the greater Los Angeles community."

Ridley-Thomas said he believes NFL teams will be interested in Los Angeles because of its large fan base and lucrative television contracts. This, he hopes, will help convince a potential owner to put up capital for the construction project.

One initial concern raised about the financing plan was its dependence on the sale of personal seat licenses, which guarantee the purchaser the right to buy season tickets. The license money - which can run about $2,500 per seat - would be used to pay off a bank loan or bonds issued to finance the renovation.

"The bank or insurance company that supports the loan would be taking a risk," said Mary Collins, an attorney with Orrick, Herrington & Sutcliffe who specializes in stadium financing deals.

"If they don't sell enough seats, then the city would have to pay for the debt through its general fund," she added. "That's dangerous when you put assumptions on your cash flow."

An NFL owner could realize between $100 million and $150 million in the sale of personal seat licenses in a renovated Coliseum, according to a report released by accounting firm Price Waterhouse. That would still leave as much as $130 million of the renovation's projected cost unfinanced.

That money might have to come from the team owner or from the public, according to Richard Popper, budget director for Los Angeles County Supervisor Zev Yaroslavsky.

"There is no immediate sources from either the city or the county to put money into this, so this must come from investors," said Popper, whose boss serves on the Coliseum Commission. "We hope the sales of PSLs (personal seat licenses) go well, and hope this deal keeps other cities vying for a team on the sidelines."