An NFL stadium in Inglewood would be “a potential game changer in tax revenue,” according to a new report from the credit rating agency Moody’s Investors Service, which relies mostly on information from the city’s own analysis.
“The stadium go-ahead is credit positive for Inglewood because the city stands to gain $18.7 million-$28 million annually over a 16-year period and more after, according to a city-commissioned report,” Moody’s says, in its Weekly Credit Outlook for Public Finance. “Once construction is finished in 2020, a $21 million revenue bump would be equivalent to about 25 percent of the city’s fiscal 2014 general fund of $80 million.”
If an NFL team moves to Inglewood, the biggest financial windfall to the city would come from a 10 percent admission tax on every ticket sold at the stadium, according to Moody’s.
The second most lucrative source of tax revenue would come from property taxes on the $1.86 billion construction project. Other sources include hotel and parking taxes.
“The city would stand to increase its revenue base by a substantial amount,” said Eric Hoffmann, a Moody’s Senior Vice-President. “Inglewood is not a wealthy city. Per capita income is fairly low. The tax base per capita is fairly low. This sort of a large development can really be of benefit to a city like Inglewood.”
But the report cautions that no NFL team has actually committed to playing in Inglewood, which raises doubts about whether the stadium will be built.
“Should an NFL team fail to relocate to the stadium, the benefits to the city would be much less than projected,” the report says, before going on to describe another obstacle: “A task force is working feverishly to keep the Rams in St. Louis via a new stadium there.”
The report also says another proposal by the Oakland Raiders and San Diego Chargers to build a $1.7 billion stadium in Carson “is another source of potential competition.”
The report notes that Hollywood Park Land Co., which owns the land adjacent to the 60 acres purchased by St. Louis Rams owner Stan Kroenke, is already the city’s top taxpayer, accounting for 3.63 percent of total city value.
The report doesn’t change Inglewood’s credit rating, which was upgraded to A1 last month and is still four notches below the top rating. By comparison, Los Angeles has a rating of Aa2, which is just two notches below the top rating.
“We are pleased that Moody’s is paying attention to the continual forward movement of the City of Inglewood” said Mayor James Butts.