BankAmerica Corp. said it will finance construction of the Staples Center, a 20,000-seat sports arena slated for downtown Los Angeles.
The lead banking unit of the San Francisco company has fully underwritten a $305 million credit facility for L.A. Arena Co., an entity owned by the Los Angeles Kings hockey team. The package is one of the largest private financings of a sports arena in the United States.
Ground was broken Thursday for the arena's construction. It is expected to be completed in October 1999.
The Kings and the Los Angeles Lakers basketball team have each signed 25-year leases to play in the building. For 30 years, both teams have played in the Great Western Forum in Inglewood, Calif.
The Staples Center, which is touted as being crucial to the revitalization of downtown Los Angeles, also is to host concerts, exhibits, and other special events.
The project is the first of its kind in the city in 30 years.
"This is an important deal for us, and this is a very important development for downtown L.A.," said Michael Dasher, managing director and regional manager for corporate banking at Bank of America.
"The revitalization going on there, and the opportunity this arena creates, is an important thing for the community and important for us to be a part of," he added.
Daniel Beckerman, chief financial officer of the Kings and of L.A. Arena, said the project drew much interest from banks. Bank of America was chosen from five bidders.
The $260.2 billion-asset banking company has a long-standing relationship with Kings owner Phil Anschutz.
"This is a big-profile project, and it's going to be a showpiece for years to come, so a lot of entities were interested in being affiliated with it," Mr. Beckerman said.
"A facility like this is mandatory in order to generate the revenue streams necessary to compete for sports games, recruit talent, and be competitive in terms of the National Hockey League and the National Basketball Association," he added.
Financing stadium construction is an area of growth, Mr. Dasher said.
Opportunities have arisen from the aging of arenas and the development of new types of sports complexes.
Recently, arena projects have begun in San Francisco, Seattle, and Atlanta.
The Staples Center will have 160 luxury suites, 2,500 premier-level seats, five concourse levels, two restaurants, private clubs, business centers, conference rooms, and other amenities.