Firm Gives Up on Renovating L.A. Coliseum

An ambitious plan to use private financing to renovate the Los Angeles Memorial Coliseum failed Tuesday when the company that manages the historic stadium disclosed it was pulling out of the deal because of the recession.

In a letter to Coliseum Commission President William Robertson dated July 29 but made public Tuesday, the Spectacor Management Limited Partnership said it had concluded that “because of current economic conditions . . . there is no longer a role for a for-profit developer.”

The decision once again throws into question the future of the stadium as a playing site for its prime tenant, the Los Angeles Raiders professional football team. After negotiations with the cities of Irwindale and Oakland, the Raiders agreed in 1990 to keep playing in the Coliseum on the condition that the privately financed upgrade by Spectacor proceed. The $116-million plan called for construction of luxury spectator boxes, alteration of stadium seating and lowering the playing field. The stadium’s other major tenant is the USC football team.

Tuesday’s announcement ends the latest attempt in a 14-year effort to renovate the stadium, which was built in 1923 and was the site of major events in the 1932 and 1984 Olympics, as well as innumerable football games, the 1959 World Series, major track meets and John F. Kennedy’s acceptance speech at the 1960 Democratic National Convention.

Coliseum commissioners are continuing efforts to line up alternative financing for the renovation and their discussions have included representatives of Rebuild L.A., the post-riot recovery organization headed by Peter V. Ueberroth, who also headed the city’s 1984 Olympic Organizing Committee. Officials declined to comment Tuesday on the discussions.

Robertson said representatives of the Coliseum Commission met with Spectacor Chairman Ed Snider on Monday to discuss retaining Spectacor as an agent for the commission in trying to arrange a new renovation plan.

Spectacor will continue to manage the Coliseum and adjacent Sports Arena, as it has done for four years. But its letter to the commission was plain: it no longer will assume responsibility for the renovation.

There were strong indications Tuesday that in bowing out of the 1990 deal, Spectacor had forfeited a $10-million payment it made two years ago to the Raiders. Neither Spectacor nor the Raiders would comment on the reputed forfeiture, but neither denied it.

On Sept. 11, 1990, the day the Spectacor-Raider agreement was signed, Robertson and Los Angeles Deputy Mayor Mark Fabiani said that a $10-million payment Spectacor made to the Raiders would be forfeited if Spectacor could not put together the renovation for any reason other than environmental obstacles.

Such a forfeiture would be the second to the team in recent years. The city of Irwindale forfeited $10 million to the Raiders when it failed to fulfill a 1987 commitment to build a stadium in the San Gabriel Valley.

Sources involved with the Coliseum renovation agreement said Tuesday that as efforts to arrange financing for a Spectacor-directed project unraveled over several months, both the Raiders and USC agreed to give up millions of dollars in future revenues that had been called for in the 1990 agreement. This would make it easier to obtain financing under any new renovation plan.

Joseph M. Cohen, the senior Spectacor official who signed the July 29 letter to Robertson, said the firm finally concluded that public financing, or at least a public financial guarantee, is necessary to carry out the $116-million renovation.

Cohen noted that Spectacor had failed in the fall of 1991 to sell enough $90,000 luxury boxes or $3,600 club seats to finance the renovation. And, he said, it is clear the public would not accept the alternative of dramatically raising the prices of all Coliseum seats.

Another Coliseum official said that even Pasadena’s Rose Bowl, pursuing a much smaller renovation, has failed to sell even half of only 36 luxury boxes at a substantially lower price per box.

But if the sale of high-priced seats cannot secure financing for a Coliseum renovation, it may be equally difficult to secure it with public financing.

The Coliseum Commission has about $15 million in its accounts, money won in a lawsuit with the Raiders against the National Football League for the NFL’s effort to stop the team from moving from Oakland to Los Angeles in the early 1980s.

But $15 million is a small amount when compared to what is needed for the renovation, which includes lowering the field, putting in thousands of seats closer to the playing action and building an upper deck above 4,000 club seats and 150 luxury boxes.

Three levels of government are represented on the Coliseum Commission, and neither the city, the county nor the state has shown any inclination to contribute to the renovation.

Nonetheless, Robertson said that despite Spectacor’s bowing out he still believes there is a good chance of eventually arranging a renovation. “It will not be done in a week,” he said, “but I still have confidence in getting the job done.”

While expressing hope that a Coliseum renovation can still be brought about and claiming credit for much of the planning, Spectacor also said in its letter: “The harsh reality of a dramatic reduction in (available) revenue means that all participants . . . must settle for substantially less than projected under the 1991 plan.

“It is gratifying to report to you that USC and the Raiders have both accepted the reality of the reduced revenue and continue to negotiate lease revisions with us in a good faith manner. . . .

“We are proposing . . . that the commission undertake the renovation of the Coliseum as the principal owner of the facility,” the letter said. “Spectacor would continue to serve as staff to your commission in its present capacity as an agent.”

The letter said Spectacor had spent more than $17 million in an effort to proceed with the renovation. But that figure includes money forfeited to the Raiders for failing to complete the renovation.

At the Raider offices in El Segundo on Tuesday, team spokeswoman Amy Trask made no effort to conceal what she said was the team’s “extreme disappointment.”

As for Spectacor’s letter, Trask said: “It’s revisionist literature and it is in conflict with the facts.” However, she would not elaborate.

USC athletic director Mike McGee said he is optimistic that with “significant input from each of the (remaining) parties and a phased renovation, a successful plan will yet be developed.”

Times staff writer Henry Weinstein contributed to this story.