Banc of California is moving forward with the controversial $100 million naming rights to a new 22,000-seat soccer stadium in downtown Los Angeles.
The Irvine-based bank is making a $10 million payment, its first, within the next few weeks, acting Chief Executive Hugh Boyle said in a recent interview.
“The Los Angeles Football Club has important implications for improving the inner city around the stadium,” he said. “We’re proud to be affiliated with that.”
The Los Angeles Football Club, also known as LAFC, is building a $350 million stadium that’s scheduled to open next year. The facility, next to the Coliseum where the University of Southern California plays its football games, will be the first new open-air stadium in downtown Los Angeles since 1962. Construction will include restaurants, retail outlets and conference facilities.
The naming rights created controversy when it was revealed that Jason Sugarman, a part owner of the club, is the brother of the bank’s then chief executive, Steve Sugarman. Jason Sugarman’s father-in-law and famous Hollywood mogul Peter Guber is executive chairman of the club.
The naming rights figure almost matches the bank’s $115.4 million in net income last year.
The transaction raised “serious questions about governance and wasting corporate assets,” Richard Lashley, a co-founder of PL Partners and one of the bank’s largest shareholders, wrote last year in a letter to the bank.
Steve Sugarman resigned in January, and his seat on the bank’s board of directors was taken by Lashley, who didn’t return a phone call seeking comment.
The bank is providing $40.3 million out of a $145 million committed construction line of credit to LAFC Stadium Co. LLC. It’s also supplying $9.7 million out of a $35 million committed senior secured line of credit to the sports team. As of Dec. 31, neither line of credit had been used, according to the bank’s annual report.
The various entities affiliated with LAFC held $76 million in deposits at Banc of California at the end of last year.
After the initial $10 million payment, the bank will make annual payments between $5.3 million to $6.7 million until 2032. It will then have the right to extend the term for another 10 years.
The naming rights also include the title as official bank of the soccer club and its foundation; a bank branch inside the stadium; and a corporate suite for soccer games and other events.
“It’s a partnership with a good opportunity,” Boyle said.
