Future of Rose Bowl stadium looms large during early Pasadena budget talks – Daily News

on May26
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The Pasadena City Council on Monday, May 25, kicked off its discussion of a proposed city budget for next year, but it was the fate of the Rose Bowl stadium that took up the most air time.

What was supposed to be a cursory introduction by the city manager on the overall $897 million balanced spending plan for 2022, morphed into a protracted deliberationon the beloved stadium’s financial condition, which some city officials fear could drain the city’s reserves over time.

The stadium, which will mark it’s centennial next year, has collected $197.72 million in outstanding debt. That prompted some leaders Monday night to float the concept of restructructuringof the Rose Bowl Operating Company, the non-profit entity that runs the stadium on behalf of the city, which owns the site.

“This is a possible albatross around the city,” said City Councilman John J. Kennedy, in a heated exchange on the issue.

Kennedy, along with Councilwoman Felicia Williams, said the time has come for the council to begin considering a restructure, in hopes it might help bring the stadium back to health. Kennedy suggested a cut in pay for the company’s general manager.

“At one point, since I’ve been on the council, it appeared that the ROBC would be able to handle the debt service,” he said. “But from what the city manager has shared with us, that picture is not going to occur at any time in the short term. We really need to look at that because we’re calling upon taxpayers money to handle the debt.”

City Manager Steven Mermell warned that continued servicing of the stadium’s debt would eventually squeeze the city’s reserve funds and general fund.

In the proposed budget for next year, the city will likely — if approved by the City Council — pay $10 million to serve debt payments, which over the next several years will range between $5 million and $8 million.

The scenario wouldn’t be quite as dire if the stadium could rely on hotel transient occupancy tax revenue, much like the Pasadena Center Operating Company does to service the debt of the Pasadena Convention Center and Civic Auditorium.  The pandemic hit both hard, as hotels, events and live entertainment went dark.

But while the Convention Center projects a recovery in the coming years as hotel business picks up, the stadium’s recovery is largely subject to the success of the UCLA football team, its anchor tenant and the uncertain dynamics of the post-COVID-19 marketplace.

Officials point to the lavish new SoFi Stadium in Inglewood and a hypercompetitive live venue marketplace in Southern California as wooing potential audiences and events away from  the stadium. Plus, the operating company has no transient occupancy tax revenue to rely on to keep it afloat.

“In my view, a solution to the long-term obligations associated with the Rose Bowl stadium must be found, otherwise it will become a draw on the general fund, which will squeeze the operating budget,” Mermell told the council Monday night, adding that the debt issue was the most significant long-range issue facing the city’s fiscal picture.

A statue of Jackie Robinson outside of the Rose Bowl. (Photo by Ryan Carter)

Kennedy was concerned from the beginning that the principal reason for creating an operating company was precisely to “alleviate” such financial burdens for the city. The expectation at the time that structure was created: The stadium would consistently generate enough revenue to cover its debt. But as Mermell noted, the debt obligation still remains with the city’s general fund as a backstop in the lean years. The lean years have arrived.

Mermell floated possibilities of incremental revenue from new hotel projects in the city. Madison said the operating company board was already hard at work working through it, especially given that the board is bidding for World Cup 2024 games to be played at the stadium and the 2028 L.A. Olympics to follow.

Things got heated after Councilman Steven Madison, also a member of the Rose Bowl Operation Committee’s board, interjected, concerned that Kennedy’s inquiries were preempting what will be a more formal hearing on the matter in the coming weeks.

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