The Forum To Sue Inglewood

Plans to build a new venue for the L.A. Clippers hit a snag

  • by Tom Gresham
  • Published: July 26, 2017

The Forum, Inglewood, Calif., is not happy about a new neighbor.

Madison Square Garden, the owner of The Forum, Inglewood, Calif., has filed a claim for damages against the city of Inglewood, in response to an agreement Inglewood leaders made with an entity representing the Los Angeles Clippers to explore the development of a new home for the National Basketball Association (NBA) franchise near the venue.

Marvin Putnam, a partner with the Latham & Watkins law firm representing MSG, said representatives of the Forum had been “lied to and cheated” by Inglewood officials and the damages claim, which names Inglewood City Council, the Inglewood Parking Authority and the Successor Agency to the Inglewood Redevelopment Agency, likely will be followed by a lawsuit. In addition, Putnam indicated he plans to file a separate lawsuit this week seeking public records related to negotiations between the Clippers and the city to form their agreement — a process he said has taken place “in the most secretive, backroom way imaginable.”

The Inglewood City Council approved an exclusive negotiating agreement with Murphy’s Bowl LLC, an entity representing the Clippers, on June 15 to pursue the development of a new, state-of-the-art NBA arena, which would be located near the new home of the National Football League’s (NFL) Los Angeles Rams and Los Angles Chargers. The council re-approved the agreement on July 21 after questions emerged about the process for the first vote. The agreement lasts 36 months with a possible six-month extension. The team paid the city $1.5 million to support work that will be done by public staff and consultants as part of the agreement, which will include required state environmental review.

The Forum, formerly the home of the Los Angeles Lakers, the Los Angeles Kings and the Los Angeles Sparks, completed a renovation in 2014 that helped it transition into a performance venue designed to emphasize music and entertainment. The renovation resulted from a 2012 agreement between Inglewood and MSG that included MSG committing to invest $50 million in the project. By the time the renovated Forum opened, MSG had invested $100 million in the project.

“By all accounts, from 2014 to today, the Forum has been one of the premier venues in this country and done incredible things to help bring Inglewood back and be part of the ‘Inglewood Renaissance,’” Putnam said.

The claim for damages stems in part from that 2012 agreement, which Putnam said stated Inglewood would not help bring in “a competitive entity” that would negatively impact the Forum’s business. In addition, the Forum terminated its lease with the city for 20 acres of parking in April when — according to Putnam — Inglewood officials approached MSG and said it needed the space for a new technology park that would help the city develop into a Silicon Beach-like destination. Two months later, Putnam said, those 20 acres were part of the 80 acres contained in the agreement between the Clippers and Inglewood.

“That’s duplicitous,” Putnam said. “It was the product of an out-and-out lie.” After the public announcement of the agreement between the Clippers and the city, he said, “MSG was dumbstruck. It wasn’t just a slap in the face. It was more like a punch in the face.”

Inglewood Mayor James Butts declined to comment on the claim for damages itself, saying, “The claim is under review by our legal department and they will make a recommendation as to whether to accept or deny the claim.”

Butts also declined to comment on the technology park allegation, but he said he believed Inglewood’s actions with the Clippers have not been at odds with the city’s agreement with MSG.

“There is no portion of the development agreement between MSG and Inglewood that would prohibit the city from exploring the development of an NBA arena,” Butts said.

Butts said the prospect of the Clippers moving into an arena in Inglewood offers promising economic possibilities for the city.

“An NBA team playing in Inglewood would likely yield upwards of 4 million dollars per year to the general fund from ticket taxes, parking taxes and sales taxes,” Butts said. “The project would likely produce 10,000 to 15,000 union-scale construction jobs and 500 permanent and part-time jobs.”

Meanwhile, Putnam said the proposed arena would carry severe financial consequences for the Forum.

“There’s no way you can underplay or underestimate the massive impact,” Putnam said. “It’s a mile away. You can be outside on the balcony of the Forum looking east and quite literally see where it’s going to be today.”

Putnam said MSG filed the damages claim to demonstrate to Inglewood its displeasure with the agreement and to signal its desire for the city “to fix this” without a lawsuit. The claim says to “immediately cease any further action to encourage the development of another arena in the city of Inglewood in breach of the express contractual commitments the city has made to the Forum.” In Putnam’s view, the city’s response to the claim has been “terrible.”

“It looks like they’re going to sit there and claim they’ve done nothing wrong and don’t know what we’re talking about, which ultimately is going to result in us unfortunately having to sue the city, the city council and the parking authority,” Putnam said.

Putnam said MSG submitted a public records request to Inglewood asking for records related to the city’s negotiations with the Clippers, such as texts, working drafts, emails and meeting notes. The city produced a collection of items that he said was too small an output for a project “so incredibly detailed and complex.”

“They would have us believe that much like Athena this came out of Zeus’s head fully formed,” Putnam said. “And guess what, nothing works that way … that is just a lie. We’re about to file a lawsuit demanding all of those materials.”

Butts declined to comment on MSG’s claim regarding a scarcity of available records, but disagreed with the suggestion that the city’s dealings on the possible new arena have been insufficiently open. He called the process “completely transparent” and compared it to the process when MSG renovated the Forum.

“The city has entered into an (exclusive negotiating agreement) to explore whether a project can be developed,” Butts said. “There will be a number of public meetings including a review by the Planning Commission (public meeting) and an environmental review should the project proceed that far. This was the exact same process engaged in with MSG.”

The 80-acres covered in the agreement between the Clippers and Inglewood includes both city-owned land and privately-owned land, including homes, apartments, businesses and a church. The agreement repeatedly cites the possibility of using eminent domain for property needed for the arena. Butts declined to comment on that possibility.

Butts said the city of Inglewood “cherishes” its relationship with MSG and hopes to reconcile its differences regarding the proposed new Clippers home.

“Working together, we have seen the Forum become one of the top concert venues in the country,” Butts said. “The city has the right to self-determination and will not be constrained in its decision-making. The city council’s first responsibility is to ensure continued progress, opportunities for employment, to improve public safety and the quality of life for Inglewood residents. In the end, I am certain that the city and MSG will come together for a win-win resolution for both parties. In the meantime, life goes on unabated for the Forum and the city of Inglewood.”

 

  • by Tom Gresham
  • Published: July 26, 2017