MSG sues Gov. Newsom, California lawmakers over Clippers’ $1.2 billion arena

The Madison Square Garden Co., owners of The Forum in Inglewood, filed a lawsuit Friday against Gov. Gavin Newsom and the state Legislature, alleging the state officials violated California’s constitution by giving special treatment to a proposed Los Angeles Clippers arena project.

AB 987, a law signed in 2018, grants protections from lengthy lawsuits to the Clippers project in exchange for meeting certain environmental standards. Newsom certified the project last month.

In June 2018, Inglewood — with a population of roughly 110,000 — had an unrestricted net deficit of $388.7 million, amounting to $3,423 in debt for every person who calls the city home.

Inglewood Mayor James T. Butts Jr. considers Moorlach’s analysis without merit.

“Using this as an indicator of financial health is like going to the doctor to get a checkup and ignoring blood pressure, cholesterol and blood chemistry and making an assessment (based) on the length of your hair,” Butts said.

But some financial experts say Moorlach’s analysis is a very real way of determining whether a city is kicking the can on its long-term debt.

“The problem I see is how are you going to undo this (debt)?” said Gary Caporicci, senior partner with the Santa Ana accounting firm The Pun Group. “The answer is you’re not going to be able to turn this around.”

However, under the state constitution, a special statute becomes invalid if a “general statute can be made applicable.” MSG argues AB 987 violates this part of the constitution because a similar and more general law, AB 900, has been used to fast-track other sports complexes in the past. Both laws require substantial investments in the local economy and the creation of high-wage jobs.

“Thus, not only can a general statute be ‘made applicable’ within the meaning of the constitutional prohibition, the Legislature already has enacted such statutes,” the lawsuit states. “The Legislature nonetheless enacted AB 987 as special, one-off legislation for the benefit of a single private party.”

Clippers ‘undeterred’ by lawsuit

The Clippers want to build their 18,000-seat arena on 28 acres of land just south of the NFL’s new SoFi Stadium, which bypassed a full environmental review through a ballot measure.

Once completed, the $1.2 billion basketball arena would host hundreds of events per year, including games and concerts.

On Friday, Chris Meany, the lead developer on the Clippers project, said the team remains undeterred and looks forward to opening the facility in time for the 2024-25 NBA season.

“Today’s filing of yet another merit-less lawsuit by the Madison Square Garden Co. is the latest desperate attempt in an all-out legal onslaught to slow the development of the proposed Clippers arena in Inglewood,” he said in a statement. “MSG’s hubris in continuing to file such actions is exceeded only by its brazen and malicious attempts to make patently false statements and mischaracterize virtually every aspect of a project that will greatly benefit the citizens of Inglewood, who overwhelmingly support the arena.”

Lawsuit one of several

MSG has waged war against the Clippers project since its announcement. The company first sued Inglewood, alleging Mayor James T. Butts Jr. tricked executives into signing over land for the Clippers’ competing arena by falsely claiming it would be used for a technology park instead. The city has contested that claim and the case is still ongoing.

MSG largely funded Butts’ challenger in the recent mayoral election and has indirectly supported activists who have separately challenged the arena project through other lawsuits.

The California Air Resources Board, which had to approve the Clippers arena project under AB 987 before it went to the governor, stalled on its decision for nearly a year. The agency attributed the long delays to the significant opposition.

MSG officials say they vehemently oppose the project because they believe it will be harmful to residents.

An environmental impact report released last month showed the project will result in a “significant” and “unavoidable” increase in traffic, noise and pollutants. The Clippers have pledged the project will have the “most stringent environmental standards in state history for a sports venue” and to provide $100 million in community benefits.

City officials similarly have expressed confidence in their ability to handle the impacts based on the city’s long history of coordinating major events in that area.

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