Critical Vote on Westdome Bonds Before City Council

A state-approved $37.9-million bond issue to help finance construction of Westdome arena in Santa Ana will be considered by the City Council today as officials race against a Friday deadline for sale of the bonds and the possibility of new federal tax legislation that could make such bonds less attractive.

The California Debt Limit Allocation Committee approved the industrial development bonds on Nov. 26, provided they could be sold by Dec. 20. But City Council approval of the sale is considered crucial to proceeding with the Westdome project, city officials said.

Final Action in March

Once sold, proceeds of the bonds would be put into escrow pending approval of the 18,500-seat arena. Final City Council hearings on the project are expected in early March.

“It’s in reverse order to what you normally do on a development,” said Allan Durkovic, who proposes to develop the downtown arena in partnership with Donald Oliphant, Robert Osbrink and Ronald McMahon. “You normally get everything approved and ready to go before you start to secure financing.”

If the bonds are approved today, and should the Westdome be rejected in March, the four-man Westdome partnership issuing the bonds could lose about $1.2 million, Durkovic said.

Expenses So Far

He said Crocker Bank has issued a letter of credit to back the partnership and that the partners have spent about $500,000 so far for arena design, consulting services and a $100,000 application fee to the National Basketball Assn. for an expansion franchise.

A no vote on the bond issue by the council today would deal a severe blow to the project and probably kill it, city officials said. “It would either kill it or we’d have to renegotiate our lease agreement. . . . If we were to continue, it would severely reduce our revenues,” Deputy City Manager Rex Swanson said.

Faced with the crucial vote and stung by critics of the city’s plan to demolish Santa Ana Stadium downtown to make way for the arena, the developers over the weekend attempted a last-minute door-to-door campaign to drum up support for their plans.

“We know there’s opposition out there, and they’ve been very vocal,” Durkovic said. “But we also know there are some supporters out there who haven’t been coming to council meetings and voicing their opinions.”

Flyers were distributed in various sections of the city along with “signature cards” inviting people to become Westdome boosters. Oliphant, who said the surveys were being taken largely in response to opposition by the Save Our Stadium group to moving the present Santa Ana Stadium to make way for Westdome, said the developers hope to draw supporters by promising to inscribe the names of each “booster” on a plaque at the main entrance to the arena.

Durkovic and Oliphant even took time to knock on doors in Santa Ana.

On Greenbrier Street Saturday morning, Oliphant, who is also a general partner in Knott’s Berry Farm, listened to fears about possible traffic problems. He said he attempted to assure people that there would be measures taken to protect residential areas. Those measures would include barricades on streets nearest the arena and free permits to allow residents to pass through, he said.

Although there were some negative comments--”Don’t tear down the stadium,” “Put the dad-burned Westdome some place else”--there were also some people who said they would like to see a professional basketball team in Orange County, he said.

“Our biggest concern is the traffic,” resident Tom Hammill said, adding that he would “think about” putting himself and his wife, Janice, on the list of boosters.

“I think we can mitigate those concerns about traffic and keep these quiet residential areas the way they are,” Oliphant said.

All involved in the project stressed that today’s vote is a major step. The public hearing will be in the City Council chambers at City Hall beginning at 3 p.m.

In addition to the developers’ “community surveys,” the flurry of activity preceding the vote included a visit to the Tacoma Dome by five council members attending a National League of Cities meeting in the state of Washington last week. And the Save Our Stadium group continued to argue against replacing Santa Ana Stadium with the arena. On Dec. 7, the group hired an airplane to tow a sign reading “Save Our Stadium for Our Kids” over the Toys on Parade downtown.

“This is D-day for us. We have about 5,200 signatures saying leave Eddie West Field (Santa Ana Stadium) where it is. I haven’t seen the Westdome partners list. I guess I’d have to say they have at least 11,” said Save Our Stadium spokesman Bob Lopez, referring to an 11-1 vote of support from the board of the Santa Ana Chamber of Commerce. Lopez was that lone no vote.

According to Hank Cunningham, assistant director of economic development for Santa Ana, there should be no trouble in marketing the bonds, which must be sold by Friday. He said the bonds would be attractive to investors seeking tax shelters because they are now exempt from state and federal taxes on interest.

Cunningham said one reason for the urgency was that the pending tax legislation in Congress would eliminate those exemptions on industrial development bonds.